Three NAB experts discuss how brokers are stepping up as professional services partners prepare to exit
As the broking industry matures, brokers are evolving from intermediaries into trusted partners, woven into the daily operations of their clients.
In commercial broking, they’re strengthening referral networks with accountants, lawyers, and financial planners by embedding themselves in clients’ wider advisory networks.
This is no more evident than in the realm of succession planning, which is emerging as a real hotspot in the commercial broking space thanks to a favourable mix of economic and demographic conditions.
MPA conducted one-on-one interviews and drew on recent interviews with experts at Australia’s largest business bank NAB to get the lowdown on what succession planning means for the modern commercial broker.
Professional services’ safe-haven status
“Succession planning is no longer seen as an end-of-career conversation,” says NAB client director – professional services Philip Pleasant George (pictured, top). “It's looked at as a growth and continuation strategy.”
It’s seen as a way to scale, lock in talent and secure a professional services firm’s future. It is about growing the overall pie, even if individual founders’ ownership percentages fall.
NAB’s data shows about 75% of professional services business owners expect to exit in the next 10 years, yet only around one in four have a formal succession plan. This presents a major opportunity for brokers and advisers to initiate early, structured conversations about ownership transitions.
Furthermore, professional services businesses maintain resilient revenues during turbulent economic times like the ones currently being experienced.
“Advisory is a safe haven in times of uncertainty,” says NAB professional services banking executive Adam Holster. “It's actually in these really uncertain times that lawyers, accountants, insurance brokers, real estate professionals, really stand up and come into their own.”
This not only creates advantageous referral relationships for brokers, “but some amazing opportunities to be able to support them directly with their own banking facilities”, adds Holster.
Pleasant George says: “Brokers are very well placed because they are looked at as the most trusted adviser of the business… you’re in a very good position whereby you can talk about the number of options that are available, whether it's mergers and acquisitions, or whether it's internal buyout, or whether it's partners coming in or going out.”
Why is succession such a live issue?
1. Cost pressures
Rising fixed costs and regulation are pushing firms toward scale and consolidation.
Professional services firms have relatively simple but increasingly expensive cost bases (people, premises, technology). With big, mostly fixed costs rising and additional regulatory burdens (like AML tranche 2 for some sectors), firms are looking to scale up, often via M&A, to protect margins and spread compliance costs.
Holster is seeing a lot of industry players consolidate “to make (their) revenue line bigger so (they) can cover fixed costs”.
2. Demographics are forcing ownership change
An aging cohort of principals – many still working later in life – means more owners are looking for a way out, but many do not know how to get there. That demographic shift is a core driver of succession activity across professional services.
3. Succession is closely tied to talent and retention
Pre‑succession tools such as employee share schemes and phantom equity (incentives based on company value growth but without the transfer of equity) are becoming more common ways to retain key people and gradually broaden ownership, laying the groundwork for future succession events.
How are firms structuring succession?
Structures are highly creative and varied. “Our clients never cease to amaze us, frankly, with the different creative approaches that they're taking to facing in some of the strategic challenges that they're having,” says Holster.
Some examples include:
1. Classic partner sell‑down (internal succession)
Senior partners progressively sell equity to younger, more growth‑oriented partners. This refreshes leadership, motivates the next generation and allows staged exits for founders.
2. External capital – e.g. private equity stakes
In one example given by Holster, a private equity firm took a 60% stake, with NAB funding both succession for existing shareholders and the new investor.
3. M&A
Some firms are fully merging with or acquiring other practices to achieve scale, diversify capability and expand client bases. Succession and growth objectives often blend together in these deals.
4. Structured junior partner buy‑ins with clean exits
In one example given by Pleasant George, a founding partner with a 75% stake wanted to retire. Three junior partners each acquired 25%, with NAB using special purpose vehicles (SPVs) for the incoming partners. This kept the firm’s balance sheet “clean” and allowed the retiring principal a clean exit.
Role of brokers in succession planning
Commercial brokers play an important role in the early stages of succession planning negotiations.
“A lot of succession plans are predicated on a purchaser being able to fulfill the transaction,” explains NAB executive commercial broker and equipment finance sales Chris Thomas.
For instance, if Partner A in a law firm wants to buy Partner B out, the first question must be – does Partner A have the wherewithal to be able to fund the buyout?
“That's where the financing component to the succession planning becomes a pretty critical element,” says Thomas.
While accountants may guide clients on tax implications and lawyers structure the deal, brokers and bankers are increasingly at the coalface of these discussions – ensuring incoming partners have the capacity to fund their stake and that the transaction is commercially viable.
“It’s where all the components come together,” Thomas says, noting that without the right funding structure, even well-planned succession strategies can stall.
“Over history, I've witnessed bankers and brokers be right at the forefront of those discussions with those other professional service providers or trusted advisors, and they can play a pretty critical role in how a deal can come together.”
Taking broking to a higher level
Succession planning is not a space for transactional broking alone. Success hinges on deep, long-standing relationships with the firm. Brokers must understand not just financials, but internal dynamics, growth ambitions and succession intent. They’re often navigating sensitive and confidential conversations.
“You've got to be a well-established and highly credible and capable broker to offer the level of support required,” says Thomas.
The payoff can be significant. Beyond structuring a single commercial loan, brokers who deliver in this space can cement long-term partnerships, unlocking ongoing business across commercial and personal lending.
Thomas stresses that a proper succession planning deal requires a lender that understands the cash flow of the business and then structures repayment of the loans accordingly.
“It needs a lender like NAB that understands the industry and can ensure that the solution actually works,” he says.
Maintaining solid relationships
Succession also protects and extends existing referral networks.
For brokers, professional services firms are both clients and key referrers. Helping them transition smoothly protects long‑term relationships and ensures the broker remains embedded with both the outgoing and incoming owners.
With ongoing economic volatility, higher regulatory load, aging owners and intense competition for talent, NAB expects succession to remain a central theme over the coming years.
