You will often hear people in adviser technology (like me!) expounding on the efficiencies and consistencies that good software can usher into a financial planning business. It can take care of all the boring and time-consuming admin and regulatory tasks that prevent you and your colleagues spending quality time with clients. But there is another compelling argument for AdviceTech that is overlooked – succession planning.
What I mean is: if you think you might one day sell your business, your buyer is almost certainly going to be looking for an operation that has, where possible, done away with paper and pens, standardised the way it implements compliance across all its advisers and stored its client data in a way that makes it instantly accessible and well-ordered.
A buyer should have all this at his or her fingertips and this is exactly what modern adviser technology platforms do.
It’s a need that has become fundamental, says Phil Platts, since he sold his financial planning/tax advisory business to a bank in 2003.
He told us: “This topic shows how things have changed. We didn’t openly discuss any of this. We concentrated on growth, prospects for fees and client retention/growth by offering new service lines.
“Now, a buyer of a business would want high-quality tech systems for clients because it shows the firm has a clear and easy view of its clients’ investments, scope to increase fees and – most important these days – risk management.”
But it’s not just external buyers who benefit from tech adoption; it’s just as important for an internal buyer – often one or more employees buy businesses from a retiring owner.
Financial planner and speaker Chris Budd wrote The Eternal Business to help entrepreneurs understand how to achieve this through Employee Ownership Trusts. We asked him about his thoughts on the importance of good technology in succession planning.
“If the sale is by way of a management buy-out or to an Employee Ownership Trust, then it is likely that some or all of the payments will be coming out of future profits of the business,” Chris said.
“Succession planning, therefore, is all about building a business that will last – if not forever, then at least long enough to make the payments.
“This means making sure the business is not dependent upon one or a few people, whose departure would cause a major problem. Clearly, software has a major part to play in embedding processes and procedures into a business, and thereby putting it onto a solid footing.”
Maybe it goes without saying but there is, of course, plenty of due diligence to be done on the sort of technology you bring into your business. Is it likely to be compatible with systems your potential buyer, if external, has already used? If not, can it be integrated with systems he or she might want to bring in? Is the tech provider likely to be able to support the transition with training, good user videos or a user community? And so on.
This is the part where I tell you what Advicefront does!
We offer a single suite of fact-finding, risk-profiling, client agreement, billing and digital signature tools in our product, Onboard. And we integrate with many of the tools you all already use! Want to see how much time you could save with Onboard? Book your free 15-minute demo!