Business success with succession planning

A substantial opportunity exists for advisers to maximise their ability to sell insurance to high net worth clients by adding business succession planning to their services.

As we enter the new world under the Life Insurance Framework, advisers are increasingly looking to how they can maximise engagement with higher-value clients. A substantial opportunity resides in business succession planning, and recommending insurance with a “buy-sell” agreement.

This is a specialist area of advice, and not one in which many advisers have developed complete processes to effectively define their value proposition and engage their client. Without process, the prospect of success is extremely low.

This has been the overwhelming feedback from Zurich’s recent business succession workshops, held in partnership with IronGroup Lawyers, where advisers were engaged on how to make the business succession conversation a successful one.

Business insurance is not a new phenomenon. There are a myriad of presentations and educational materials on the subject – specifically about the insurances that are put into place to cover scenarios when a business owner or key person within a business can no longer fulfil their role, either through death, illness or permanent disablement.

Some of these training materials are technical; some highlight the need; some look at taxation issues. However, beyond the required knowledge for advisers when dealing with business owners, important questions still remain…


As an adviser, how can you help your client not only appreciate the need for advice, but motivate them to appreciate the importance of business succession planning? How do you help them protect the true value of the time and effort they’ve put into their business, and pass on their legacy in a way that they are comfortable with?

I’ve seen many advisers advising “on the business” without an understanding of what the impact of business succession would have on their client and their family in a broader sense.

Without that deep understanding from both the adviser and the client we see:

  • Less commitment from the client to enact a solution;
  • Reduced influence of the adviser to position the solution;
  • More confusion injected by other service providers, such as accountants; and
  • The inability of the adviser to showcase their value and be seen as the central facilitator.

Much of the cut-through to the business succession market has to do with a proper positioning statement, a well designed diagnostic to highlight the need for the client, and the process from the adviser to enact the solution.

Positioning is critical

What sets the best advisers in the business succession planning space apart is that they can effectively articulate their worth. They have a value proposition that clearly spells out the benefits they provide for the client. There is a cadence and rhythm to their pitch and it incorporates these elements.

1) Who they work with, why and what problems they have

Example: “We work with local small businesses, typically retailers, sole traders, and family businesses that have as a key focus…”
• To be able to extract their equity from the business on their terms
• To maximise their return
• The survival of the business
• To ensure their clients are looked after

2) The type of work they do with them

Example: “We look at complete business and family succession planning to…”
• Ensure plans are documented
• Deliver fairness to all owners
• Help with a smooth transition
• Maximise the business and family value

3) The outcomes they have

Example: “Our clients have more time to focus on running the business and less worry about the future.”

Have an appropriate diagnostic

Having a benchmark is a critical motivator for business owners since it allows them to reflect on their own level of preparedness for a succession scenario. Good benchmarks are those that are easy to understand, emotive and effective. They make the scenario of business succession feel like a real possibility, not something “that will never happen to me”. How you set your benchmark is a personal choice. It can be a simple questionnaire to assess the state of readiness of a business for succession, or something that delves deeper into the aspirations of the business and its owners.

Whatever the method, the key is for it to be engaging.

Have a solid and effective process

Business owners need to be taken through a defined process. Without a process, document business succession planning can be seen by clients as one of those “important but not urgent” activities because they have no barometer for what the process entails. Think about visual mechanisms that allow the process to come to life and bring to mind those “what if” scenarios where a business owner needs to leave or scale down a business. These should include:

• Accident: What if one of the business partners is killed or debilitated in an accident?
• Retirement: What if you or one of your business partners retires?
• Disagreements: What if you, or your business partner, have a disagreement?
• Lack of performance: What if something unforeseen happens to your business partner?

A process map will help you explain the plan to transition your client’s business and to realise the true value of the time and effort they have put into it. The steps in any process map should include:

1) Diagnosis: Understand your clients’ financial health. Zurich’s new Wealth Index within Adviser Flipchart now makes this process faster and easier.

2) The first meeting: Introduce the concept of succession planning and understand your clients’ values. Maximise client engagement using the Values Tool within Adviser Flipchart.

3) Heads of meeting: This should involve the adviser, business owners and business professional (e.g. accountant and solicitor) to create an exit agreement that will support the business owners and assist a smooth transition.

4) Family meeting: This should involve the adviser, business owners and their family members. The aim is to discuss the different “what if” scenarios. Zurich’s ‘Facilitating business succession outcomes’ infographic provides more detailed information on what to work through for each scenario.

5) Strategy map: Map options and explain the clauses in the agreement to the business owners.


Andy Marshall is head of sales strategy and research, Zurich Life and Investments

Business success with succession planning
Andy Marshall
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