And using a recruitment consultant does not guarantee a quality candidate.
Chris Budd founder and chairman of Ovation Finance adds: “Too many people use recruitment agencies. It’s easy to give your CV to a recruiter then sit back and wait. Most owners/MDs will welcome a direct approach if it has been well researched and thought through.
“If someone approached me in a way that showed they understood our business and why they would be a good fit, I would always speak with them, even if we weren’t looking to hire at that point.”
When an adviser joins a firm, the same factors that attracted him are likely to be the same that will keep them in the company.
According to a study by Quilter, the three top reasons why people tend to leave firms are because:
The firm is not providing any business support
What was promised on the way into the job has not been delivered
The individual got a better offer elsewhere
Mr Budd says firms should also ask themselves if their clients see their relationship with the advisers at the firm or with the business
“If the former, then when the adviser leaves, so does the client,” Mr Budd adds.
“This adviser might be an employee or the owner, but either way, this significantly affects the value of the business and the likelihood of it continuing beyond the owner.
“Businesses therefore need to work on the client seeing their relationship as being with the firm.”
Another way for firms to grow and expand is by succession planning.
Principal owners of an income or lifestyle business - taking out the profit each year - might not worry too much about succession planning.
However, a growth business is one that has a real value as an ongoing concern once the owner has left – and therefore a value.
“Trouble is, lots of people are income businesses, yet still think that it has a value – that someone is going to buy their business from them one day,” Mr Budd says.
“If you want the business to outlast you, then you need to work on making yourself the least important person in the business. This can take many years and needs a plan to follow – it won’t come about without serious effort.
“Many think that someone is waiting to buy their business at a high value. This is so often not the case.”
If the owners are crucial to the business, then the clients might not stay with the acquirer, which means the value offered will not materialise
Mr Budd adds: “I speak with many, many owners, and few are taking practical steps for their own exit.
