UK broker businesses are overwhelmingly failing to take steps to protect their legacy, says Aviva in its latest report.
Just one in 10 broker owners has a succession plan in place, while the majority of those aiming to leave during the next year do not know how they will close or sell their business, the survey found.
The findings demonstrate a lack of planning among the industry, while 9% of brokers say they expect to leave the industry within the next 12 months.
Phil Bayles, managing director of UK Intermediaries at the insurer, told Insurance Business that more preparation is needed for broker owners to manage the complex succession process, and that failing to do so could lead to seller regret.
“Let’s be clear, succession is difficult. Most broker owners are entrepreneurs by nature, who have set up a business and grown it over a number of years. That’s what they’re used to doing. Then, all of a sudden, they’ve got to do something they’ve probably never done before in moving their business to a different ownership structure,” Bayles said.
That process can be further complicated as a number of stakeholders often need to be taken into account. But it’s crucial that broker owners keep in mind their priorities when assessing their options for a sale, the director said.
“You’ve got to do it in a way that looks after what is important to you… It all starts with trying to understand what their objectives are for the succession – what’s important to these business owners.”
Bayles said that he has seen “seller regret” among broker owners who have failed to give themselves enough time and room to ask the right questions of their buyers.
“Doing your due diligence on your buyer is really important, and making sure that your values both align – otherwise it will be a very unhappy marriage,” he said.
“My view is that broker owners need some good, high-quality independent advice around what their options are, and people to hold their hand through the process to ensure that they can access advice around things such as legal, tax, and cultural issues.”
Aviva’s own succession proposition offers regional brokers independent advice with access to external experts who specialise in a range of areas.
