Only 12% of advice practices have exit plans

Of the 5,500 financial planning businesses in this country, only 12 per cent have proper succession plans, according to Forte Asset Solutions.

Speaking at the FPA Congress in Sydney, Forte Asset Solutions managing director Steve Prendeville said a lot of the elements of success in exit planning are pretty much the same as they were 15 years ago, despite the FASEA changes.

“There is the expectation, at worst, that 14,000 will leave our industry,” he said.

“The reality … is that 14,000 have left our industry in the last five years, 5,000 have left in the last three years. So, I don't subscribe to the falling of values purely because we're going to have a shift in supply. We're looking at the same shifts in supply that we've already been used to.”


In his presentation, Mr Prendeville focused mainly on the internal succession method as it is the one that has gained popularity within advice practices.

However, he noted that while it’s philosophically and intellectually appealing, it rarely happens.

“Yet the response of most of the people I'm talking to about FASEA is saying, ‘Don't worry, I'll have my people who have the education and I'll just move up into a CEO or chairman-type role and be able to continue’,” Mr Prendeville said.

“We know the sales are coming up. With FASEA, all of a sudden we've got a retirement date of 1 January 2024, which we haven't had before, yet only 12 per cent of our community actually have a succession plan or an exit plan.

“Those that are successful are the ones that are prepared for this.”

Only 12% of advice practices have exit plans
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Adrian Flores

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].

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