Several studies have indicated that an overwhelming number of advisers are looking to retire in the next 10 years.
One piece of research, published by FTAdviser, says that three-quarters of IFAs are set to retire in the next decade.
Another, published by Money Marketing, reveals that 49% want to retire in the next five years – and clients are seriously concerned about the upcoming transition.
In fact:
- 1 in 5 investors is “very concerned” about their adviser retiring
- A further 26% are “quite concerned”.
If you’re planning to exit in the coming decade, it’s likely that you are excited about the prospect of retiring and taking life at your own pace. But at the back of your mind there is also likely to be a niggling worry about whether your clients will be okay and who will take care of them once you are no longer working.
That is why it is so important to:
- Plan your exit well in advance
- Find a suitable adviser to take on your clients
- Ensure you’re emotionally and financially ready to move on.
Here are some valuable insights into approaching your exit with a client-focused mindset, and how our method of facilitating adviser retirements may help.
Choosing an appropriate home for your clients while receiving the payout you deserve
Nobody wants that dreaded tap on the shoulder in the supermarket or on the golf course, only to turn around and see an upset former client standing there. Although you deserve to retire how and when you choose, it’s important to first find the right home for your clients.
If you’re an independent adviser looking for a suitable home for your clients, you tend to have two options:
- Sell to another independent firm owner who wants to expand their portfolio
- Sell to a consolidator.
The tricky thing is that independent firms who might be the right fit ethically often don’t have deep pockets or sufficient infrastructure to take on an entirely new client bank. So, plenty of IFAs end up selling to consolidators – and while this might be easier logistically, your clients could end up losing out on the personal touch and bespoke experience they’re accustomed to.
When preparing to exit and looking for buyers, ask yourself the following questions:
- Am I rushing this because I want to retire as soon as possible?
- If I ran into a client a year after my retirement, am I confident they would be happy with their new adviser?
- Will my buyer respect, and do their best to continue, the long-term relationship I have built with my clients?
Reflecting on these questions may help to steer you, whether you’re looking at selling to a consolidator or having your business folded into another independent firm.
Preparing yourself emotionally for the transition
Letting go of your clients – some of whom might have become friends over the years – is often a bittersweet experience. Your much-deserved next chapter is waiting for you, but first, it’s time to get your head around exiting the business you have worked so hard for.
If this is something you are struggling with, you are not alone. Although it might be hard, remember that burying your head in the sand and ignoring your exit plan could mean:
- You rush a sale that doesn’t suit you or your clients
- Your personal tax position and retirement outcome worsens
- You experience overwhelming stress when you do finally retire.
Some important tips to consider if you’re approaching retirement include:
- Discuss how you’re feeling with retired IFAs who have been through the process.
- Create a timeline of three to five years to ensure you are ready for the sale to take place.
- Prepare your clients for the transition and reassure them that their financial plan won’t be affected.
We’re here to support you in your exit plan.
The Corbel Partners exit proposition
Here at Corbel Partners, we have designed an exit proposition that we believe could benefit all our members.
Advisers have the opportunity to sell to our network when they decide to exit. This guarantee means that no matter what, they can:
- Retire at the time that suits them
- Trust that their clients will be in safe hands
- Plan their exit reliably
- Gain ultimate peace of mind.
Remember, we aren’t a large consolidator and will always put your clients first. This means:
- Matching your clients to a fully independent adviser within our network
- Ensuring they have ample support and reassurance
- Maintaining their long-term plan with minimal disruption
- A guarantee that their new adviser will take the time to get to know your clients personally.
However, if this isn’t the right fit, our members aren’t tied into any kind of buyout deal with Corbel Partners. You are free to explore both our internal market and the external market and form a deal that suits your personal goals and the values of your business.
If you do choose to sell elsewhere, our network will still support your exit in any way we can, providing expert guidance based on decades of experience.
Get in touch
To learn more about how our firm will support your exit and help you find the right home for your clients, speak to us today.
Email hello@corbelpartners.co.uk or call 01925 637891.
Please note
This article is for general information only and does not constitute advice.
All information is correct at the time of writing and is subject to change in the future.