Firms and the importance of better succession planning – Murphy

You can spend 25 years building up a successful business, with strong turnover, loyal clients, a decent income, and yet the minute you consider stopping writing business, you may well feel your firm is worth absolutely nothing. 

Let that sink in for a moment. Years, perhaps decades, of client relationships, long hours, professional advice, sleepless nights… and unless you’ve put the right succession plan in place, you could be on the verge of leaving with little more than a database of e-mail addresses and phone numbers.

That’s the brutal reality facing thousands of advisers, particularly those operating one/two-man/woman bands. 

Thinking ahead 

The time has therefore come for owners of those firms to start asking much tougher questions of themselves, and certainly if they are appointed representative (AR) firms, their networks.

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Questions like: What happens when I want to retire? How do I create value in my business? Is there a clear and credible exit strategy available to me via the network? Will you be able to offer me opportunities to move into retirement with the funds that my hard work should really have generated over that time? 

At JLM, we’ve been thinking about these questions for a long time. The truth is that unless networks are building a proposition that includes proper succession planning and the ability to monetise an adviser/owner’s life’s work, they’re selling them short. 

Let’s be honest: a mortgage business, particularly one built around one person, is difficult to sell unless it’s been structured to deliver recurring value. But how is the network helping them achieve this? What is it offering? 

The problem is twofold. First, many ARs haven’t had the time, or the inclination, to think this far ahead. And second, too many networks focus purely on the here and now rather than how they can help build long-term value. 

A fully rounded proposition 

We want to approach these issues in a different way, with a clear succession plan as a natural part of our model. It includes access to a wealth proposition, so your business becomes more than just mortgage advice, it becomes a true distribution channel.

It also inherently rewards a compliant approach that delivers positive outcomes under Consumer Duty, signposting wider advice needs, tapping into those, and successfully offering them to as wide a range of clients as possible. 

And via this, we’re able to offer a formula to buy the business when the time is right. This is a proper exit strategy, not a handshake and a “thanks for everything”. In practical terms, it means the business could be valued on a multiple of EBITDA.

And by having this to draw upon when the time is right, the owner will know what they’re working towards, and they’ll have the comfort to be able to stop on their terms with something real and tangible to take with them. 

Burying heads in the sand 

Most people actively working in this space put off thinking about this. I get it. When the pipeline’s full and you’re juggling multiple clients, recommendations and completions, the idea of retirement feels distant.

But this really needs to stop, and the future really needs to be considered: “What happens when I want out? How long might that be? What needs to happen between now and then?” The answer should be: “My network has a plan. I have a value. I have a buyer.” 

This is not just a ‘nice-to-have’, it’s essential. We’re an ageing industry. We’re not teeming with young advisers coming through the ranks. And with Consumer Duty raising the bar on professionalism and client care, the firms that can demonstrate compliance, value, and long-term planning will be the ones that thrive and be worth the most. 

Ultimately, succession planning is about moving from a survival to a legacy mindset. It’s not just about making it to the next quarter. It’s about ensuring the business you’ve built has value beyond you.

At JLM, we want our ARs to grow something that lasts. And when the time comes, we want them to step back with both pride and the value of what has been built. 

That’s because working so hard only to walk away with nothing isn’t a plan. It’s a failure of the system and a failure of the network that you’ve been with. We believe our firm owners deserve better.