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How to find a successor for an advice firm

Author: Eleanor Becker   Original Publication: CityWire

Posted on 15 Jun 2023

Following last week’s article on how to structure and implement a sustainable succession plan in an advice firm, here we look at how to find and select the right candidate for a successor.

The most important aspect of finding a suitable successor is to address both technical and soft skills, Anri Dippenaar, head of compliance at Masthead, told Citywire South Africa.

The successor must be able to provide advice on the same financial categories as the firm’s owner does. The firm’s owner must have detailed knowledge of the business and client base, so the successor can provide clients with the knowledge, advice and expertise they’re used to, said Dippenaar.

‘Find someone who believes what you believe when it comes to ethical values and someone who shares the same views as you do,’ she said.

‘This does not mean that the successor’s personal goals need to be the same as that of the business owner, but the values of running a business need to be the same. Otherwise, there will be a disconnect between the successor and the clients.’

In addition, check that potential successors have the necessary authorisation, competence, qualifications and fit and proper requirements. The Financial Advisory and Intermediary Services Act and Determination of Fit and Proper Requirements for Financial Services Providers and the code of conduct for authorised financial services providers and representatives set out minimum requirements a key individual/advisor must comply with.

According to this Moonstone article, Fairbairn Consult CEO Guy Holwill said other considerations include whether:

  • the successor has a similar advice philosophy to your own;
  • they would have sufficient capacity to add your client base to their own;
  • they would have the necessary supplier contracts;
  • the successor would buy the practice. If so, consider the tax implications and define who would inherit the proceeds if you passed away prematurely; and
  • you can agree on how the practice would be valued, particularly if you were to pass away prematurely.


Masthead head of corporate accounts Andria Hibbert suggested implementing clear and open communication between leadership and clients and staff and allowing clients and staff time to process the leadership change in order to reduce the risk of attrition.

Masthead practice management consultant Cedric Baker Effendi said a gradual and structured transition would allow the former owner to monitor and assess whether their successor is effectively managing and servicing the clients, or if they are at risk of losing any of them.

‘It’s important to remember that this is a transition for you, your successor and your clients. The further ahead you plan and the more gradual the transfer of your business or book, the more successful the transition is going to be,’ he said.

Note: This article was written by Eleanor Becker and originally published on CityWire on 13 June 2023. To access the original article, click here.


A national supplier of risk management services to independent financial advisors and other licensed financial service providers (FSPs). Established in 2004, we help our clients overcome their risk management challenges so they can grow and thrive in an increasingly regulated industry. Providing professional guidance and practical support, our team of specialists is passionately committed to delivering tangible solutions.

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