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[SINGAPORE] In January 2021, I began thinking more seriously about my firm’s succession plan. Providend has been operating for almost a quarter of a century, and the founding team is now in our mid-fifties and some early sixties.
It was time to put in place both an ownership and leadership succession plan as soon as practicable. This was not only good for the outgoing leadership team and owners, but also for our staff, and most importantly, for our clients who trust us to be there for them over the long haul.
Learning from other markets
I started researching succession planning practices in more established wealth advisory markets such as the United States and Australia. I flew to these countries to learn from conferences and spoke with countless firm owners about how they approached succession.
I discovered that many ended up with mergers and acquisitions (M&A) as their chosen path. While that approach may have worked for them, I was not convinced it was the right path for us.
Why not? To answer that, I need to go back to the early days of Providend.
Why we exist
Before the early 2000s, most financial planners in Singapore came from insurance companies, banks, or stockbroking firms – back then the term “financial adviser” didn’t exist because the Financial Adviser Act only came into effect on 1 October 2002. When we started Providend in 2001, we wanted to be different. We set out with a few non-negotiable aspirations:
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To be a professional service firm that provides honest, independent, and competent advice – not a sales organisation earning commissions by selling products.
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To be a light in the financial world, a shining example of what it means to owe a duty of care to clients.
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To demonstrate what professional wealth advisory work should look like and operate accordingly.
We modelled our ambitions on the Big Four accounting firms and the most respected legal practices worldwide. Our work was to be anchored in advice, not in selling products. We wanted to change how people saw wealth advisers: not as salespeople peddling investments and insurance, but as trusted professionals providing comprehensive wealth advice that enables clients to achieve their ikigai – their reason for being.
These were, and still are, our purpose.
The culture we built
For more than two decades, we toiled tirelessly to build a firm rooted deeply in advisory excellence and ethics. The founding team made real financial sacrifices to make this happen. We built a culture that safeguards these values, so they would be passed down no matter how large we grew.
This is why I doubted that selling to a big private equity firm or a large financial institution would allow us to preserve our culture, aspirations, and purpose – the very reasons Providend exists. Even with the best promises from a buyer, who could guarantee that they would truly understand, let alone uphold, our DNA?
So, we decided to do succession our way.
Leadership-first approach
I decided to focus first on leadership succession and, as much as possible, enable future leaders to be the owners of the firm. I also believed the next chief executive of Providend must have advisory roots in the firm, not just managerial competence.
Five years ago, we openly identified our second generation of leaders – the “G2.” I also began thinking about who our “G3” might be in time. We gave G2 leaders significant responsibilities and projects, and offered them an Employee Share Purchase Plan. Every one subscribed, becoming shareholders.
During the same period, we had private equity firms and strategic buyers approach us with acquisition offers. I have rejected them so far. My concerns were threefold.
One, these buyers may not truly understand what real wealth advisory is about, nor grasp the DNA of Providend. Two, buyers may promise not to meddle in management, but no one can guarantee what will happen after the deal closes. Three, even if they keep their word, can they really internalise our culture if they weren’t born and bred in the firm? At least for now, I have my doubts.
Some may say that being owned by a large institution enables access to more financial resources which can be good for clients. But having advised ultra-wealthy clients for decades, I know that having more money is not always the silver bullet.
Following our own advice
We work with many business owners as part of our advisory practice. With them, we determine how much wealth they need to achieve their ikigai goals. We calculate how much their business needs to be worth to fund those goals, and value the business today to find the value gap. Then we help them develop an exit plan.
A key part of that exit plan is leadership succession. Without a clearly written succession plan, the value of the business can be significantly reduced.
More importantly, without it, you may not be able to retire when you wish, because the business cannot run without you. And without good leadership succession, your ownership succession is compromised. No one wants to buy a firm without capable leaders to run it, and you may have no leaders to sell to internally.
Thinking long term
When we rolled out our succession plan in 2021, we set a 10-year business goal ending in 2030. We are now halfway there.
Last year, we extended our planning horizon to 2035. We have been investing heavily in infrastructure to meet these goals, using years of retained earnings. By 2035, it is likely that the founding shareholders will have retired and exited the firm so we may not personally enjoy the full fruits of these investments.
But as founders, we agreed that this was the right thing to do – not to maximise our own short-term gain, but to ensure the long-term health of the firm. We would rather invest now, run the firm together with the G2 leaders, and hand over to them a company already running smoothly towards the 2035 goals. We felt that this was the more responsible thing to do.
A good succession plan should not be limited to what shareholders want. It must consider the interests of all stakeholders – especially clients and staff. That belief has shaped every decision we have made. While selling to large institutions will better benefit founding shareholders financially, the trade-offs are not what we are prepared to make. We are making ikigai decision before financial ones.
In that sense, our approach mirrors what Singapore’s founding fathers did for future generations. When Mr. Lee Kuan Yew and his team invested in infrastructure, housing, education and economic development, they knew they would not personally see the Singapore we enjoy today. Yet they made those investments for us. They understood that their stewardship was not just for their own time, but for the future.
As Singapore celebrates its 60th birthday this year, I am reminded of the sacrificial leadership that built this nation. Without it, we would not be where we are today. Succession, whether for a country or a company, is not merely about replacing leaders or in the case of a company, owners. It is about preserving purpose, values, and culture.
It is about planting seeds whose fruits we may never taste, but which will nourish those who come after us. Happy 60th birthday, Singapore.
The writer is chief executive officer of Providend, South-east Asia’s first fee-only comprehensive wealth advisory firm
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