Certificate in Advising Small and Family Businesses (Cert. ASFB)
Small and family businesses (e.g. SMEs) in Singapore represent one of the under-served, high-potential segments for financial planners. The business and family dynamics of these segments are unique, requiring targeted, specialized solutions, which a Financial Advisory Representative (FAR) with a Certificate in Advising Small and Family Businesses (Cert. ASFB) can more deliver more competently. The course has a structured framework offering insights into the challenges faced by small business and family business owners, and prepares FARs to provide expert guidance and actionable advice to problems that can be solved using insurance and investment products.
Challenges of Small and Medium Enterprises (SMEs) and Family Businesses in Singapore
According to Statistics Singapore, there are 190,100 enterprises in Singapore (including companies, businesses, non-profit organizations, ministries and statutory boards) of which 99% are small and medium enterprises. One of the most pressing and complex challenges faced by this segment is effectively managing business risks and ensuring business continuity due to the incapacity or death of the owner(s). FARs attuned to the needs and issues faced by SME Owners are in a better position to provide essential solutions to help them navigate these challenges.
Exit and succession planning is another challenge. A well-structured exit or succession funded by insurance can be designed to ensure that the business survives and prospers when leaders are no longer in the picture, owing to their untimely death, incapacitation or retirement. A funded succession plan can also be an exit strategy that ensures the owner or his/her heirs can cash out at a good value under the prevalent circumstances. The role of the FAR in recommending suitable insurance products as a funding vehicles to the succession and exit proposition makes him an invaluable partner to business clients.
In their survey of family businesses, PricewaterhouseCoopers found succession planning to be a key internal issue and ensuring that business stays in the family to be a chief priority. Conflict between family members was identified as an important challenge. The survey revealed that just 11% of family businesses in Singapore had a robust and documented succession plan. The future is quite uncertain for owners of privately-owned businesses. There are no means of predicting when untimely decisions may be necessitated in the event of ill-health or offers of acquisition by a global competitor. One of the best ways to be prepared for such uncertainties – whether positive or negative – is to ensure a strong solvency position in the company that can weather through the various storms such situation can present, while strengthening the confidence of customers, suppliers, creditors and internal staff and family members.
Internal conflicts are more commonly associated with family businesses, but it is a lesser known fact that their ownership structure gives them the advantage of long-term competitiveness over publicly-held companies. As mentioned above, future plans emphasize passing on ownership and/or management to the next generation more than selling/floating the business. Effective conflict management and succession planning are essential to realize such 'family involvement' goals and take a longer-term approach to decision-making. Here, liquidity can provide for equalisation and distribution planning to minimize conflicts and unhappiness among family members.
FARs with the Certificate in Advising Small and Family Businesses (Cert. ASFB) have extensive knowledge of the complexities inherent in a family enterprise. The certification can help you penetrate this segment and develop business relationships with the business owners in a meaningful and rewarding way.
ASFB Program Introduction
This 6-module workshop covers both Knowledge and Skills and will comprise of 21 contact hours:
MODULE 1: Introduction to Advising Business Owners and Risk Management
The first module provides an overview of the potential opportunities that can be generated when advising business owners. This module will also bridge the relationship between the risk exposures facing the client as an individual and a business-owner, and the various strategies that can be used to manage such risk exposure and generate business opportunities. An overview of 12 different situations and how insurance and investment products can be used will also be provided for learners looking for “sales ideas”.
MODULE 2: Qualitative Analysis: The Business Environment and Business Structure
This module provides a framework for understanding the business environment and business structures, as well as the unique issues and challenges in each structure. In this module, learners will have a deeper understanding of where to start, what to look for and how to engage their prospective clients in a client-planner relationship. Most often, this is a critical process as part of the pre-approach and initial client meeting.
MODULE 3: Quantitative Analysis: Company Financial Analysis
This module equips learners with the knowledge and competence to understand and conduct a financial analysis of the business to identify potential financial pitfalls within the business, such as credit, cashflow or guarantor risks, and be equipped to address them.
MODULE 4: The Buy-Sell Agreement and Establishing Business Valuation
This module looks into the buy-sell agreement as well as an appreciation of the various valuation models and guidelines, as well as an introduction to valuers such as the International Valuation Standards Council (IVSC) and the role of the Institute of Valuers and Appraisers of Singapore (IVAS). Specifically, learners will learn how to use insurance products as a funding vehicle for the exit proposition.
MODULE 5: Exit Planning and Key Employee Strategies
This module addresses the exit planning and succession issues of the business owner, and how to implement appropriate strategies to ensure a smooth exit or funding for a buyout. Learners will also gain an appreciation of strategies that can be used to retain key employees for the long-term benefit of the business.
MODULE 6: Advising the Family Business
This final module addresses the challenges and concerns of family-owned business (e.g. equity among siblings) and the strategies that can be used to mitigate such challenges.
The Certificate in Advising Small & Family Businesses (Cert. ASFB) equips FARs with the necessary competency and skills to engage the business owners market, using field-tested approach and frameworks developed from experience and academia. Due to the broad scope of business ownership planning, this course is designed to focus on addressing the challenges faced by small and family businesses.
At the end of this course, financial planners will be equipped with:
- An understanding of the frameworks used to understand the business environment and business strategy to understand the client’s challenges and communicate more effectively with the client
- An understanding of the process to conducting an analysis of the client’s business and the development of a business narrative
- An understanding of the interconnection of three significant groups – Owners, Business and Family and how to create opportunities to mitigate common risk issues they face
- An understanding of the risk management process used to identify and manage business and personal risk exposures and generate potential upsell and cross-sell opportunities to manage client’s risks exposure
- An understanding of the various business structures and its implications for businesses, and the problems they present in various exit situations
- Knowledge to conduct financial analysis on a company to uncover risks and opportunities using insurance and investment products
- An understanding of the various types of buy-sell agreement structures and how to use insurance as a vehicle and strategies to support an exit plan
- An understanding of various business valuation approaches in negotiating buy-sell agreements
- An understanding of the importance of succession planning and a framework to get started, and use insurance as a vehicle to ensure a smooth transition
- An understanding of strategies to protecting a business against the loss of a key employee
- An understanding of various talent retention strategies and how to deploy insurance and investment strategies
- Knowledge of structuring life insurance policies to meet various business planning objectives
- The framework to develop a narrative for family governance within a family-owned business
- An understanding of family dynamics and the balance of power and control between various stakeholder groups in a family-owned business
- An understanding of the potential business opportunities advising family-owned businesses
- Knowledge of sales concepts and presentation models to engage business owners as well as engagement tips, business-owner’s planning tools and worksheets
- A quarterly graduates meeting for practice updates, case discussions and networking
The knowledge and skills will be delivered over 6-sessions conducted over a 6-week period (21 non-core CPD hours) through:
- Structured lecture
- Case studies and discussions
- Assignment and further readings
- Written assignment (short essay)
- MCQ assessment (30 questions)
- Attendee will receive the Certificate (Cert. ASFB) upon meeting the attendance requirement and passing the online assessment
Course Facilitator: Mr. Ronald Wong
Other Course Information:
- To ensure maximum appreciation of the content, learners should preferably have at least one year of experience in financial planning to develop an appreciation of the content
- AFP certification or its equivalent will be useful
1) IBF-FTS funding (must pass assessment for claim) - up to 90%* OR 2) Skills Future Credit – up to S$500 credits*
* 90% funding is applicable for Singaporean aged 40 and above. 50% funding is available to all other qualifying applicants. Term and conditions apply. Please refer to the official website for full details.
This programme is recognised under the Financial Training Scheme (FTS) and is eligible for FTS claims subject to all eligibility criteria being met.
Please note that in no way does this represent an endorsement of the quality of the training provider and programme. Participants are advised to assess the suitability of the programme and its relevance to participants’ business activities or job roles.
The FTS is available to eligible entities based on the prevalent funding eligibility, quantum and caps. FTS claims may only be made for recognised programmes with specified validity period. Please refer to www.ibf.org.sg for more information.