Chris Budd, chairman of Financial Planning firm Ovation Finance has explained why he made employees the boss at the firm.

Mr Budd spoke about the how he sold the Bristol-based firm to his staff via an Employee Ownership Trust in an exclusive interview in the latest Financial Planning today magazine.

Mr Budd also spoke about his career and his branching out into writing books and coaching.

Speaking about selling his business to his employees he said: “Like many business owners, succession planning was always in the back of my mind.

“A bout of mild depression led to me taking coaching.

“This then led to the realisation that I didn’t want to sell to the firms who typically buy IFA businesses.

“I concluded that in order to sell I was going to have to make myself the least important person in the business.

“I then spent seven years on this, but still didn’t have the ownership solution.

“I was looking for an exit which would ensure that: I would get value for the shares; the employees would all be looked after; the clients would continue to be serviced the way they were used to and the business would continue for the long term.

“Then, in June 2017, I attended a regional meeting of the Employee Ownership Association (EOA) and everything clicked into place with the Employee Ownership Trust (EOT).

“Anyone familiar with how John Lewis is owned will understand the model.

“The EOT owns the shares, meaning employees don’t have to find the money or take the risk of share ownership.

“The EOT gets the profit from the business, which it distributes to its beneficiaries – the employees.

“In this way the employees get to have a voice in the running of the business (the EOT doesn’t have to buy all the shares but it must have at least 51%) and to benefit from the profits.

“The exit therefore means the owner sets up the EOT and sells their shares, creating a debt from the EOT to the owner.

“A portion of future profits are then used to pay this debt.

“Oh, and those payments are capital gains tax exempt, and the first £3,600 to employees is free of income tax.

“Preparing early allows the owner to prepare the business for sale to the EOT, and therefore reduce the riskiness of being paid out of future profits.”

The full interview is in the latest edition of Financial Planning Today magazine.

Click here to read for free.