Speaking to InvestorDaily, Guardian Advice executive manager Simon Harris said succession planning was a significant issue and it was important that it was addressed for the industry to be sustainable.
“I think we’ve got an obligation to support the sustainability of our industry,” Mr Harris said. “Succession planning is clearly an industry-wide challenge to be addressed and I would like to see more licensees and dealer groups get involved in coming up with solutions to help those younger advisers take over the mature businesses.”
Mr Harris said the aging population is having a significant effect on the advice industry, with a large proportion of baby boomer-age principals looking to sell in the near future.
Guardian’s Practice Equity Model, first flagged at a media briefing in February, attempts to address this problem by allowing the advisory group to take a minority equity share in a business, helping it transition to a new owner, he added.
“I would like to see more licensees and dealer groups get involved in coming up with solutions to help those younger advisers take over the more mature businesses,” Mr Harris said.
“It’s really important as an industry that we find innovative solutions to help those younger advisers [take controlling stakes in businesses] given their often limited resources to do so themselves.
“Our equity partnership model will enable the successor to build their wealth and eventually take full ownership of an established practice.”
Guardian yesterday announced its first equity partnership deal with planning firm Capital Managers.
Under the arrangement, Guardian-owned Prophet Financial Advice and Warwick Financial Services will merge with Capital Managers.
