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Ensuring your succession plan

Posted on July 22, 2019

Ensuring your succession plan

The FSCA requires Financial Services Providers to have in place a continuity plan that ensures your clients are not left in the lurch should you exit your business. Taking this a step further, a succession plan also looks after your investment in your business, ensuring that you realise the worth of your hard work or that your beneficiaries are fairly compensated should you no longer be around.

If your successor is not internal to your business, your succession plan becomes more complicated. In this case make sure that your successor has broking contracts with the same product providers that you have so that your clients can be transferred to their commission code. Remember, product providers will be under no obligation to enter into a contract with your successor and this could leave your clients out in the cold.

If your clients are not familiar with your successor, it might be a good idea to implement a transition period to build those relationships and trust.

Remember to properly and fully document the succession plan and all relevant details to avoid disputes and the resulting lengthy delays that could see your clients turning away or the finalisation of your estate delayed.

The best would be to appoint a successor from within your business as your clients will be familiar with them, your product providers and broking contracts will not be affected, and your beneficiaries and executors are more likely to know the details of the agreement put in place, avoiding disputes and lengthy delays.