The untimely death of a financial adviser can lead to catastrophic outcomes for an advisory practice, its owners and their families, staff and clients alike. The situation is intensified if the deceased adviser is the sole owner of the firm and worse still, if the single-owner holds their own AFSL.

The bottom line is, if the death of an adviser results in the business being unable to provide the services for which its clients are paying, fees will need to be turned off, and once this happens, it’s a very big job to resume/turn them back on. The impact of this will be felt at every level – it’s a lose/lose/lose situation.

But, if you are the sole adviser/owner/AFSL holder in your firm, there are some actions you can take now, to cushion the impact for all concerned, and to minimize the business risk and financial impacts, if the worst should happen;

 

Your family

How will those you hold closest, be placed in the event of your untimely passing?

Some things to consider; have you incorporated your business (it’s value, debts, liabilities and so on) into your personal estate planning? Does your family know what needs to be done to ensure the business can operate as it works through your estate? Who can they turn to? How can they ensure a fair and equitable transition which is handled in accordance with your wishes? And, if your wish is that your business is to be sold, have you appointed someone to handle the sale (and communicated accordingly to your estate)?

If there’s a will, then the executor can appoint someone to run the business as your estate sorts itself out. But it is important that this appointed person has the capacity to manage the practice in the interim or, at the very least, knows who to turn to for this type of support, including any sale.

Preparing a ‘What if’ (in the event of death) instruction document will certainly be appreciated by those you’ve left behind.

 

Your clients

Due to the nature of financial planning, strong bonds develop over time between adviser and client. Consider, according to our latest analysis, 42% of clients have been with their current adviser for at least 7 years.* Clients are simply the practice’s raison d’etre and its most valuable asset.

In the event of your death, making sure your clients get immediate ongoing service from an adviser you know and trust is not just a great outcome for your clients, it is also of vital importance to your staff and for realising the capital value of your business.

Communication to your clients will be of critical importance. Who will now look after their affairs, manage their plans, maintain services and support? Will anything change and if so, in what way?

A thoughtfully constructed communication piece prepared in advance, written in your tone and in your style will go a long way to settling your clients while allowing your successor time and space to settle in.

 

Your staff

As with your clients, your staff are absolutely critical to the ongoing success of your business. They do, after all, represent the front line and they are well-known to your clients. Note that ‘staff’ are continually highly ranked in the top three performance areas by Australian clients.* Your clients will most likely, trust your staff.

A business continuity plan which addresses the ‘what if’ from the perspective of staff, will go a long way to keeping the business on track, without disruption. It will also give them future certainty while perhaps also removing any unsaid expectations or indeed, temptation for them to look around for another employer.

In short, they will be needed even more so, when you’re not there!

 

Your business

Consider the ongoing future of the business itself. It’s a valuable asset which could suddenly be at risk.

From the practice’s perspective the immediate challenge will be – how to ensure clients continue to be looked after now that the sole adviser/owner is suddenly no longer around.

We believe that one of the most effective ways to reduce this impact is through what we’ve termed a ‘cross town’ agreement. Under this arrangement, owners from two different firms agree that in the event of the death of one of them, the other (surviving practice) will purchase the deceased’s business. The benefits of such an arrangement are patently obvious but, careful consideration and planning is paramount.

While this agreement will incorporate the clauses and conditions which are standard for most sale situations, a ‘What if’ housekeeping checklist will also be of great benefit as it will allow the purchaser, so nominated, to simply step in and continue to manage the deceased’s business in the period leading up to finalisation of the sale. It should at the very least cover:

  • The respective licensees – what are their obligations, not to mention expectations?
  • Pin/access codes to CRM, systems, accounts etc – in other words, the stuff needed to keep the business running.
  • Names, emails, phone numbers of all ‘relevant’ people including the SFSL holder, ASIC and PI insurer.
  • Direction to product providers – re-direct fees, commissions
  • Communication strategy to clients, centres of influence and staff

If the ‘cross town’ arrangement mentioned above doesn’t incorporate a buy/sell, an IM will allow your representative (executor or ‘cross town’ partner for example) to take your business to market in its best possible light.

Preparing an IM (Information Memorandum document) for your business will allow you to tell its story and to control its narrative – you’ll always be sale ready.

Ensure you have a current valuation (or at least reasonable estimation as to value) which is in line with current market trends. If you don’t have a realistic expectation, it’s a fair bet that you’ll undervalue (and hence, undersell).

If the sole adviser/owner is also the firm’s sole Responsible Manager (RM), look to appoint (or at the very least – nominate) a second RM who can step into this role and ensure your license can be maintained. Remembering that ASIC requires advice of a change in RM status.

 

Don’t be the plumber with a leaky tap

This is not an easy subject, difficult sometimes to discuss in the first person and easy to defer. But stuff happens; it’s what you tell your clients every day.

It’s why seeking external input and advice to help you prepare in advance, and to hold you accountable to the actual implementation of plans, is perhaps the best advice we can offer.

Yours in best practice,

The team at Business Health.

(We’re currently putting together a ‘What if’ package, tailored specifically for single owner advice businesses – let us know if you’d like to be kept informed of what we’re up to.)

*All stats have been derived from the latest analysis of Business Health’s Datawarehouse, including the Business Health Australian Advised Client Survey database, Jan 2026.