View more on these topics

Why succession plans should not be kept secret

roderick rennison

For most us there comes a time when we begin to think about retiring or at least doing less. For those of you running an advice firm there are other people to think about: your fellow directors or partners (if you are not operating on your own), your advisers and staff, and, not least, your family.

It is all too easy to put off making a decision but this can lead to issues that can be avoided with forward planning. Supposing, for example, you become ill and need to retire. You will need to pass on the running of the business at short notice, sometimes with unattractive financial terms, as you will not have time to ensure it is fully prepared.

An alternative may be to pass your business on to your directors or partners, or, if you are a sole trader, your colleagues. But will they be ready and equipped to take it on, with the means to finance a deal?

Also, if you are not able to undertake the discussions, do your family know what your preferences are and will they be able to manage negotiations on your behalf even with the assistance of your professional advisers?

This uncertainty can be avoided with a combination of planning and sharing your intentions with those around you. This still leaves you the flexibility to decide on the actual timing in terms of your retirement from the business or deciding to sell it.

The obvious starting point is to make your family aware of what your preferences are. It is vital you are clear who should negotiate on your behalf if you are not able to do so.

If you are in business with others, there should be a shareholders or partnership agreement in place. If it has not been reviewed in the last few years you should do so now and consider how practical it is for your fellow directors and partners to buy your shares and the means of funding available. This is especially important if you are the major shareholder and the business has grown substantially over the years.

Insurance may be in place to address the position in the event of death or disability but, in most instances, funding will be needed to facilitate a retirement. If it is not practical, then a sale needs to be considered at that point.

If you are of a similar age to your fellow directors and partners, you need to be clear of your respective intentions. You do not want to find them deciding they want to depart at the time you were planning to.

Sole trader

Where you are a sole trader or sole director, you need to decide if it is practical to pass on the business to others in your firm. Is one or more of the advisers or staff interested and capable of running the business? Or could they be if you planned ahead?

Last but by no means least, are you mentally ready to pass the business on and to retire? Have you thought about what you will actually do when you are no longer working? Adopting a phased approach is, for many people, the right thing to do but it is for you to decide.

If you need help to make these crucial decisions, then seek input from others. It is not a sign of weakness but common sense. You have built a business and you and your family have a right and expectation to realise the benefits. That comes from good planning and being open about your intentions and wishes.

Roderic Rennison is director at The Ideas Lab and Rennison Consulting


FCA interior logo 620x430

FCA whistleblowing cases drop 20%

The number of whistleblowing cases dropped by almost 20 per cent last year, according to data from the FCA obtained by law firm Pinsent Masons. The law firm says FCA data shows 1,104 whistleblowing cases were recorded last year, down from 1,367 in 2014 but up on the 948 cases reported in 2013. Michael Ruck, […]

Pension savings-2015

Pension tax relief: parked (for the moment)

The national news agenda has been dominated by pension issues this month. For those that missed it (and there cannot have been many given that this was the lead story in spoken and written media), the Chancellor announced a decision to make no decision on pension tax relief in his 16 March 2016 Budget speech. To […]

How retirement advice is evolving – and how advisers are adapting

It is obvious the demand for retirement advice has accelerated post pension freedoms. At a recent Money Marketing roundtable on the evolving retirement advice market, panellists discussed whether this surge in demand is likely to continue or plateau. Panellists also explored the review process for clients in decumulation, the role of technology in helping advisers […]


Government-backed review finds NI rules ‘not fit for purpose’

A major consultation on the alignment of income tax and national insurance contributions has found the latter system is “no longer fit for purpose” and may herald the announcement of an overhaul at next week’s Budget. The Office for Tax Simplification paper, published this week after being first launched by Chancellor George Osborne last July, […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm