I firmly believe that without deadlines of some shape or form, most of the work in the world would never get done.
Without a target to aim for or a deadline date to deliver by, one would have to imagine that our own seemingly innate ability to procrastinate would kick in and we would continue to put off until tomorrow what could be done today.
Achievable deadlines are a good thing and can encourage us all to hit targets, and complete tasks to a very high standard.
For IFA firms, the whole nature of deadlines has perhaps never been so pressing as it is now, given that we are moving rather rapidly towards a new RDR-based working environment.
December 2012 may seem like a long time in the future but firms need to be making decisions now about whether they will work towards that deadline and what they must achieve to become RDR-ready or whether they will chose another route, perhaps deciding that over the next two years they will make their exit from the industry.
Making this decision comes with its own deadline. Some commentators are suggesting that those advisers who want to continue trading after the RDR could be leaving it too late to achieve the necessary qualifications.
The decision regarding a firm’s future will have to be made sooner rather than later.
This means the period leading up to the end of this year is crucial to map out the road to 2012 and beyond. Those who decide the RDR is not for them need to look seriously at their exit options because there are many opportunities and a number of potential banana skins that need to be avoided.
There is a sizeable consolidator sector – of which Perspective is part – that should be considered seriously and there may also be a number of more local tie-up opportunities to explore.
Leaving the market may mean simply selling on the client bank or a full-scale acquisition by another firm.
If advisers are not going to work towards the RDR qualifications, then now should be the time to look seriously at selling the business and the options available. The first point to make is the owners must ensure the business is in the best financial state possible to be an attractive proposition to potential purchasers. No consolidator, for example, is going to look at a firm which is not profitable and does not have strong renewal income levels.
As a consolidator, we look for firms that have these attributes but also have the management who are willing to stay with the business and deliver increased profitability throughout their earn-out period.
This is a key point. Not only will the owners pick up an initial lump sum but, with our offering, they will hopefully remain in situ at the business to help develop and grow the firm over the next two years.
During this period, we will work with the business to ensure it is primed and ready for the marketplace after the RDR, so while the owner may not be making the RDR move, their business will be as part of the group.
IFA firms are reaching a point where deadlines and decisions cannot be ignored. If they have not explored their options already, now is the time to do so.
The RDR will deliver a major shift in the IFA environment but, with the right planning and foresight, firms can place themselves in a strong position whatever decision they eventually come to.