What do entrepreneurs want from their advisors?

Tuesday, 02 November 2021
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UK entrepreneurs have proved remarkably resilient of late. Faced with the twin challenges of COVID-19 and Brexit, around half have changed their business strategy, according to our research1 , and a quarter plan to sell their business in the next five years. As a wealth manager that helps successful entrepreneurs2 on their journey, we commissioned research to find out more about their needs and concerns. The findings make interesting reading for advisors seeking to serve entrepreneurial clients.

Focused on family

It is no surprise perhaps, but recent events have focused UK entrepreneurs’ minds on their families. According to our research, roughly a third have accelerated plans to pass wealth on to their children as a result of COVID-19 and Brexit. Entrepreneurs identify lifestyle factors – including wanting to spend more time with family – as the strongest drivers of a business sale, and providing for dependants the top concern afterwards. Now more than ever, the advisory community should provide proactive support to entrepreneurs: to discuss and anticipate personal needs and goals, and put in place efficient structures to help achieve them.

Gaining an entrepreneur's ear

Partners and spouses are naturally an entrepreneur’s primary sounding board. But when it comes to discussing issues around wealth, trusted professional advisors come second, some way ahead of wider family, fellow entrepreneurs and friends. UK entrepreneurs consider accountants to be their most trusted advisors, followed by independent financial advisors, solicitors and tax advisors. Less than half believe having a ‘one-stop shop’ to provide everything from corporate lending to retail banking is important, implying many prefer to seek experts in wealth planning and investing, as they do in other aspects of their lives.

The need for a safety net

Our survey’s findings reflect the greater role online services have come to play in individuals’ lives in the wake of the pandemic. For 75 per cent of UK entrepreneurs, quality online tools are a vital part of the services they require from their advisors. More unexpected, perhaps, is the focus on security. Entrepreneurs say the solidity, stability and capitalisation of their investment manager is its most important attribute. In an environment that threw into question many of our long-standing assumptions, from globalisation trends to civil liberties, the pandemic has perhaps exacerbated worries about systemic risks.

Worries about tax

Looking ahead, entrepreneurs are worried about future UK tax rises. A rise in personal taxes concerns 72 per cent of the entrepreneurs we surveyed, and the introduction of a wealth tax concerns 68 per cent. Most identify retaining tax incentives for start-ups as a vital plank in safeguarding the UK’s competitiveness. In a world of low investment yields, seeking advice on the tax-efficient use of assets ranks among entrepreneurs’ top priorities following a business sale. Yet our survey reveals a gap in service provision here: only half of entrepreneurs feel their wealth is optimally structured from a tax perspective.

A sustainable future?

Some of our survey’s most interesting findings, in our view, were on sustainability. Almost three‑quarters of UK entrepreneurs believe investors must play their part in tackling global warming. Yet a third still believe that investing sustainably means sacrificing returns, and only a quarter of portfolios are allocated to sustainable investments. Our research thus identifies work ahead for the advisory community to dispel such myths and provide education on the possibilities of sustainable investing. In our view, this will be crucial for future investment returns, for entrepreneurs as for everyone else, as the transition to net zero accelerates across the global economy.

Download the full report at www.lombardodier.com/servingentrepreneurs.

Written by Duncan MacIntyre, UK Chief Executive, Lombard Odier

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