Advisers assemble!
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All too often, longstanding family businesses and UHNWIs neglect the need for succession planning, and the role that a trusted team of advisers plays in the strength, growth and longevity of a business – particularly when things go wrong!
The recent Autumn Budget revealed a raft of policy changes that are set to have a serious knock-on effect for family businesses. Ensuring you have the right team of advisers in place now will ensure you are well-prepared in time for when the April deadlines come around.
Prevention, not cure
Ultimately, advisers shouldn’t be a distress purchase. Unfortunately, some only learn this when it is too late, which can result in a plethora of issues, from, financial losses, and reputational harm and stress for owners and employees alike. A failure to prepare can force business owners to seek advice at the last minute, from an adviser who may have little to no context of the company, its needs or a history of its finances. This not only can lead to poor decisions made in haste, but last-minute legal advice can be costly, even in comparison to having a more permanent fixture to the company.
Picking the right team
What is equally as important as having a consistent advisory team, is that this team of advisers genuinely know your business: the intricacies of its workings; the people within it; and the working culture. A nimble, experienced team of advisers are more likely to respond quickly and accurately to issues, but with a deeper understanding of the business, should be able to identify issues before they come to fruition, and bolster defences. So, how do you know your team are strong enough?
- Do your due diligence. Assess their relevant experience and ask them to explain how they resolved issues for other (anonymised) clients to provide an insight into how they will approach working with you. Check that their values align with your own.
- Assess that they have sufficient time to give you the right amount of attention and seek clarity on the service level you should expect. Some professionals will charge on a project-based approach with fee estimates in advance, whereas for pure advisory work it can be difficult to estimate the costs as the issue cannot easily be assessed in advance.
- Appoint advisers with different areas of expertise. This offers peace of mind that nuanced issues that may crop up are handled by specialists in that field. It will sometimes be sensible to consolidate this advisory appointment process into a family office.
- Employ and deploy them at the right time. It can be easy for business owners, especially in family run-companies, to feel they can handle the running alone, or at least with minimal intervention from others. However, failure to share the load across teams and areas can have big implications.
Understand the ROI
Many struggle with the idea of an ‘open-ended’ time-based advisory fee and recoil from taking advice fearing regular invoices for ‘time spent this month’. This concern is particularly noticeable for first generation entrepreneurial business clients who are used to having clarity on what they are paying for and finessing the scope and fees. The preference can be for a ‘don’t call us, we’ll call you’ approach, which can be hard for some to navigate, given many business owners can struggle to hand the reins over to someone else for assistance, despite this often being critical for business resilience.
It can be difficult for business owners to see the added value in buying a team who have a ‘watching brief’. However, firms who do not pay for advisers to have this flexibility and freedom to think proactively are often caught out. Good advisers will be in high demand, and so need a proper retainer if they are expected to ‘have your back’ in times of crisis. The annual adviser bill needs to become a budgeted cost that is seen as both an insurance and investment in the future. Then the family need to invest their own time to engage properly to achieve the maximum value.
Lean on them for the difficult conversations
Not only are advisers crucial for day-to-day business running, but they can also help with long-term vision and planning. Implementing a succession plan, or an ‘Emergency Board Plan’, forces individuals and businesses to confront mortality – be that personally or that of the business. Advisers will take a critical view on business performance, and flag areas of concern and the strongest leaders that can fill roles effectively one day, one week or one year into the contingency approach. This is another benefit of nurturing a team that have a deep-rooted understanding of the business; as the next generation will also feel in safe hands, making what is often a turbulent and challenging time much smoother.
Whilst advisers are undoubtedly a cost consideration, they really are a key element of a harmonious and successful business. They should be considered an extension of the team, rather than an external resource that is only called upon in times of need. It can be a lengthy process, but investment in these relationships can save many headaches down the line – which as a business owner, is always appreciated.
This article was first published in Family Office Magazine in April 2025. Access the magazine here, where Hayden’s article can be found on page 35.
