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Understanding succession planning vital for accountants


With an ever-increasing number of Australia’s business owners nearing retirement age, it is vital that accountants add succession planning to their professional repertoires.


By Kyle Robbins3 minute read

At the current rate, there are over 5,000 people turning 65 per week in Australia, with this number projected to increase over the next seven years. For these individuals, successful succession planning is at the forefront of their minds, as they aim to retire knowing their employees are cared for, their business can continue without them, ensuring suppliers, customers and family members in the business are looked after.


According to Succession Plus chief executive Craig West, understanding the stakeholder concerns around succession planning, particularly around the legacy stewardship approach to succession planning is crucial for accountants in ensuring clients remain with their firm.

“Today many accounting firms have reasonably large numbers of business owners who are baby-boomers and who are therefore approaching retirement. These business owners often want to discuss succession or exiting their business with a trusted adviser such [as] their accountant, who for many is their main professional service provider,” Mr West explained.

With the increasing rise in individuals entering retirement age, and as such, individuals aiming to plan, implement and manage their succession plan, being able to turn to their accountant for trusted, informed and extensive advice is critical, he added.

“Accountants therefore need to be aware of the key issues involved with succession planning and have some tools and information available to assist their clients in preparing for an exit,” Mr West said, noting that the ability for accountants to offer this level of advice for their clients is important in ensuring they remain with their firm and do not move to seek information from a competing accountancy firm or specialist adviser.

“Unfortunately, if their accountant is not able to help the client, they will go elsewhere for that advice (often to a specialist advisor like Succession Plus or to another accounting firm) and therefore they risk losing the client.”

Looking ahead, Mr West said retaining clients through in-depth understanding of succession planning is critical for the success of firms heading into the future, especially considering that the transferral of wealth from the Baby Boomers exiting the workforce onto the next generation receiving this wealth represents the largest transferral of wealth in history.

“There is a substantial change in the approach business owners are taking towards their exit. Most baby-boomers in Australia are already independently wealthy and so do not necessarily need to rely on the sale of their business to fund their retirement (this always used to be the case),” Mr West concluded.

“What we are seeing now is a large increase of legacy stewardship exit strategies, in other words their primary focus is no longer on a financial harvest but rather about providing a legacy – making sure their employees are looked after, making sure the business continues on after they retire, looking after family members in the business and making sure customers and suppliers are also looked after.

“These issues have become more important than the dollars they might be able to extract.”

Understanding succession planning vital for accountants
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