A risk consultancy firm has warned that advisers are prone to a major business risk if they do not discuss succession plans with their business owner clients.
The Risk Store managing director Pete Wincott said in a blog post that advisers should be identifying within their client bases which ones are also SME owners who could benefit from business succession/continuity plan.
Otherwise, they potentially leave themselves open to another financial adviser coming in via a relationship with one of the other business partners.
“Suddenly, this ‘other adviser’ is delivering what you could have and he or she is now discussing the SME business partners’ ‘estate plan’ incorporating personal as well as business protection plans,” Mr Wincott said.
“They have the momentum. You get pushed out. You haven’t done anything wrong except perhaps not exploring the opportunities staring right back at you.
“Your client’s personal wealth protection and estate plan should also form part of the business asset protection and the ‘estate plan’ – they all go hand-in-hand.”
A recent MetLife study revealed that around half of all small business owners are exposing themselves, their families and employees to the financial impact of illness, injury or death through a lack of insurance cover.
It found that only 16 per cent of small business owners have a financial back-up plan in place.
Fifty-nine per cent of SMEs expect they would have to fall back on savings or sell assets, and 35 per cent said they would have to reduce their lifestyle and spending.
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].
Diverger has made an offer to acquire Centrepoint Alliance, a move that would create one of the largest licensees behind only Insignia and AMP.
The corporate regulator has outlined a key focus on product labelling and advertising.
The federal government has sought to clear up uncertainty about the status of crypto for tax purposes following the adoption of bitcoin as legal tende...
Get the latest news! Subscribe to the ifa bulletin
Get notifications in real time and stay up to date with content that matters to you.