4 necessary steps for all IFAs to take before retirement

The irony of being a financial adviser is that although you’ve spent most of your career telling your clients how to retire well, you are unlikely to have spent enough time thinking about your own retirement.

Yet according to Professional Adviser, 3 in 4 financial advisers are set to retire in the next decade. If you’re one of them, it may be beneficial to begin making purposeful steps towards this milestone as early as you can.

If you run (or are a primary shareholder in) your own firm this is especially important, as planning for retirement well in advance could make all the difference when the time comes.

While you have experience in advising others on their retirements, creating an exit plan as the owner of an advice business might be an entirely different kettle of fish.

So, here are four important steps for all IFAs to take before you retire, and how our network can help.

1. Discuss your retirement timeline with key people in your business

One of the first steps to take in the retirement preparation phase is to discuss your proposed timeline with key people in your company. These could be senior financial planners, directors, or other stakeholders who will need to be aware of when you plan to retire.

Solidifying your timeline is an important first step for a number of reasons:

  • Nobody likes to be blindsided. The earlier you can prepare the other core people in your firm for your departure, the smoother the journey towards retirement may be.
  • You can begin to prepare your personal finances. As you’ll know from working with business owner clients, selling your firm upon retirement will have an impact on your personal wealth.
  • You can find the right home for your clients. As we’ll discuss later in this article, establishing the “when” of your retirement may help you to find a suitable home for your clients, enabling you to make this transition as smooth as possible.

Once you’ve figured out how long it is likely to be until you retire, the following points should slot into place more easily.

2. Consider the options for your business’s future

Of course, one major factor you’ll need to think about as you head towards retirement is the future of your business.

Owners of small advice firms often look to sell their business upon retirement, passing the torch to a younger owner who can look after their clients well.

It’s important to note here that a successful sale can be years in the making; from finding a buyer you trust, to completing the logistical side of things, to ensuring the remaining employees are happy with the transition. These things take time, and only you can control how you approach them, so make sure to carve out some time in your routine to think clearly about your next steps.

Selling your company to an external buyer isn’t the only option. You may wish to transfer ownership of the firm to the next generation, if your children work for you, or for co-owners to buy you out and keep the business running in almost exactly the same way.

Any scenario is likely to have pros and cons, but the bottom line is that time can be your friend or your foe.

Beginning preparations up to 10 years in advance of your retirement can help ensure your business falls into appropriate hands for a fair price.

3. Make plans for your clients to be passed into safe hands

It’s likely that, if you are close to retirement, your clients have already asked the question: “What’ll happen to me when you stop working?”

Many IFAs feel some anxiety around this question. You’ve worked hard to establish a trusting relationship with your clients, and may be concerned that if they know you’re retiring, they’ll jump ship to another firm, or even stop taking advice altogether.

That’s why putting retirement plans in place far ahead of time can be so helpful. While your plans can always change, being able to confidently answer this often-dreaded question could put your clients’ minds at ease, and your own by extension.

Of course, then comes a somewhat difficult step: deciding who you’d like to take your clients on. Some clients may have become your friends over the years, so it’s understandable that your number one priority will be to transfer the management of their assets to a trusted colleague.

If you’re struggling to find the best route for them, some questions to ask yourself could include:

  • If I needed advice about a tricky client matter, who would I call?
  • When asked to think of an adviser or firm that holds similar values to me, who comes to mind?
  • What elements of my practice do my clients benefit from the most, and how can I help ensure these are maintained with their new adviser?

If you’re looking to pass clients to other advisers in your firm, this might be a simpler process than if you’re selling the business altogether and offering them a brand-new home.

In any case, being part of our network could help you make a decision you’re proud of – and the next section will explain how.

4. Learn how being part of a network could help you

In April 2023, we launched our buyout proposition.

The proposition offers all our members the promise of a buyout upon retirement, if they wish to accept it. This means that you could retire with the peace of mind that your clients will be cared for by independent industry leaders who you already know very well.

And, even if you’re looking to sell to another buyer or pass the business to the next generation, Paul and David are on hand to offer unbiased advice as you head towards your next chapter.

With the freedom to choose a buyout that suits your goals, or to take a different path, such as winding up the business or passing it to the next generation, it may be that the prospect of retiring goes from being a source of stress to a source of excitement.

Just as you’ll likely tell your clients every day, you deserve to have a relaxing retirement without additional stress weighing you down – and being part of our independent advice network could help you achieve it.

To learn more, email hello@corbelpartners.co.uk or call 01925 637891.

Please note

This blog is for general information only and does not constitute individual financial advice.

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