The Succession Alliance, a taskforce of the Consumer Duty Alliance adviser support group, is aiming to tackle confusing language used around succession, acquisitions and business sales to introduce greater consistency.
The Alliance warns that, “unfamiliar or conflicting terminology” can make the complex process of business transfer harder for financial advice firms to navigate.
To address the issue, the Alliance has created a new ‘Glossary of Succession Terms’ which brings together commonly used words, phrases and acronyms and explains them in plain English.
The glossary explains and defines dozens of terms such as: Facilitated Adviser Charge, Fair Value Assessment and FCA Approval.
The Succession Alliance says it believes that establishing clearer, shared understanding of the language can support better conversations, better-informed decisions and ultimately result in better succession outcomes.
Ben Wright, chair of the Succession Alliance, said: “For most business owners, selling their firm is something they'll only do once. Yet they're suddenly expected to understand a whole new language of terms, acronyms and jargon, often whilst making some of the biggest decisions of their lives.
"Speaking a common language is a good thing for everyone. It makes conversations easier, helps everyone understand what's being discussed and ultimately leads to better decisions. That's what we're trying to achieve with the glossary. A simple, impartial resource that anyone involved in succession can turn to when they come across something they don't understand.”
Keith Richards, CEO of the Consumer Duty Alliance, said: “The glossary reflects the Succession Alliance’s wider purpose of bringing the profession together to improve understanding, encourage earlier planning and help raise standards.
“Succession is not simply a transaction at the end of a business owner’s career. It should be part of longer-term business planning, with consideration given to clients, employees and the continuity of the firm. We want to encourage the profession to have these conversations earlier and ensure firms have access to practical support that helps them prepare with greater confidence.”
The glossary has been designed as an “impartial and practical reference” for the wider financial advice profession and will be maintained as a ‘living document,’ the Alliance says. The Alliance also says it welcomes suggestions for additional terms, alternative definitions or areas where greater clarity would be helpful.
The free to access Glossary of Succession Terms is available here: https://www.consumerduty.org/working-groups/succession-alliance/glossary-of-succession-terms