There are many things to consider when choosing to exit the workforce, particularly for those advisory firm owners who have spent many years building their businesses and client base from scratch.
For some, leaving the industry and walking away may be a relatively easy and well thought out decision, while for others, the uncertainty brought about by recent events such as the global pandemic, subsequent lockdowns and ensuing volatility in the financial services sector, may have forced them to rethink their work/life balance.
Whatever the reason, when it comes to taking retirement, planning ahead is crucial and advisers should ensure they have an effective and workable exit strategy in place to make the transition as smooth as possible for both them and their clients.
Exit strategies are also an excellent way of safeguarding an advisers’ business and income stream against any unforeseen circumstances, such as falling ill and being unable to work. This is particularly important for sole traders and smaller businesses that only have a few employees and may rely on one adviser for much of their income.
An ageing workforce
According to figures from the Financial Conduct Authority, around two-thirds of financial advisers in the UK today are over the age of 55. This means it is highly likely that at least 67 per cent of these advisers will exit the workforce, and the industry, within the next 10 years.
While some of these may choose to exit completely, others may want a phased approach to retirement by gradually reducing their working hours or working part-time. Either way, finding a workable solution that also provides the option of retaining an income into retirement is crucial.
For those advisers currently weighing up the possibility of retirement, there are services available which offer a specific retirement package including a range of opportunities to explore while also retaining an income when they stop working.
This includes a full retirement plan designed for advisers looking to completely retire from the industry as well as a hybrid service option aimed at those who would prefer a more gradual approach to retirement by slowly reducing their working hours over time. For advisers wishing to continue to work on a part-time basis, there is also a ‘locum’ service option available for their needs.
This can provide greater financial freedom and allows them to reduce their hours, take some time off or decide to fully retire on their own terms.
For advisers approaching the stage in life where taking retirement is the next step in their career, creating an exit strategy and planning ahead is crucial.
Not only will this make the transition to retirement smoother, but it will also provide peace of mind that both their clients and their business interests will be fully taken care of in the future.
