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Dear Rob & Roderic…

Our resident agony uncles and The Ideas Lab directors Rob Reid and Roderic Rennison answer adviser queries

Q › Director buyout

I want to buy out my co-director as she has decided that she is not going to continue after 2012 but neither of us are sure what her “book” is worth. How should I negotiate with her?

A › Rob

It is generally accepted that in a fair deal, both parties give ground. If either party feels they have the upper hand, it is not good value for the other party. If she was selling it on the open market, I envisage the trend developing where the individual that could continue but decides not to will receive a higher valuation than the adviserwho does nothing to either change their model or obtain the required level of competence.

A › Roderic

A fundamental question that needs to be asked is what “not going to continue” means. It may imply that she is retiring but the stories about directors/businessowners who say they are going to retire and don’t are legion. Therefore, a clear sale document needs to be drafted to protect allparties. The converse point is that the remaining director(s) may want to be able to continue to refer to the outgoing director for information and to hand over clients and these aspects also needs to be covered in any agreement.

Q › Fees

I have a concern that a number of my existing clients will not be willing to pay fees. How should I approach them?

A › Rob

You have to decide who is the real problem, you or your clients? How do you feel about fees? Are you comfortable about paying professionals for advice? If you are not, then I would suggest that you will struggle to sell the concept to others when it is applied to your own services? If you can see the value in fees from others, use the same focus to determine where you add true value regarding fees.

A › Roderic

Not all clients will be prepared to pay fees – at least at the level you believe is appropriate – but unless you are first clear about your proposition and what you will be offering, there is no point in approaching them.You may be pleasantly surprised once you approach your existing clients. When you explain what they will be getting, those who value what you do will want to pay for you to continue to provide your expertise. What is paramount is that clients are treated with consideration and fairly. The benchmark is how you would want to be treated in such circumstances.

Q › Estate planning

I want to focus on estate planning rather than being a “GP” IFA. What steps should I be taking to achieve this objective?

A › Rob

The exams offer an ideal way to gain new and useful knowledge. If you know it all already, then it still means the value of your knowledge is validated. The optimum route to building skills in this area is gaining your diploma, if required, and then going on to take the exams offered by the Society of Trust and Estate Practitioners. This will give you a position and enable you to approach relevant professionals with confidence.

A › Roderic

Think laterally. What other areas linked to or associated with estate planning might clients be interested in, for example, longterm care. You may not choose to advise clients in these areas yourself but the factfinding you do as an estate planning practitioner will enable you to identify opportunities for others to fulfill. This is for the benefit of the client and it will cement your relationship with them.


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