Brokers lax in planning succession

by Ben Abbott07 Nov 2011

Mortgage broking businesses need to work harder to understand how they wish to exit their businesses when the time comes, according to a financial services consulting expert.

Comparator Business Benchmarking managing partner Sarah Brennan has said professionals not understanding what they want to do or achieve at the point of sale is the "number one thing" her business sees broking and planning businesses doing wrong during their industry exit.

"Succession is such a key issue, not matter what stage of the business you are at," Brennan said.

Brokers have been urged t put in place a "succession business plan" to prepare their exit strategy.

"That is different from a normal business plan - it's a business plan about the future which asks in whatever period of time you wish to exit the business, how you are going to achieve that."

Brennan said brokers might choose different strategies, such as exiting the business completely and not working in it anymore, or instead working in the business for a further three to five years.

This is in addition to other succession issues such as putting in place buy/sell agreements and sponsoring younger professionals into practices, Brennan said.

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  • by Broker 7/11/2011 1:23:17 PM

    With such uncertainty and ever increasing costs in this industry, planning beyond next month is a big ask!

    Nobody in their right mind would enter this industry today, and we have not arrived here by default. I believe that this a carefully orchestrated plan by the majors to reduce their reliance on brokers and as fast as possible.

    Wouldn’t it be nice if a major or two just came out and said “We love brokers, and we know it’s more cost effective for the bank to outsource to brokers and that broker commissions will not be changing for X amount of time.

    Now that would give me a real foundation for a succession plan!