Case Study / Succession Planning - Fraser McKenzie of McKenzie & Co.

In our ebook The 9 Most Common Mistakes that Rural Families Make in Succession Planning, we highlighted the value of having an independent and trained facilitator at the table to work with families and guide their succession planning conversations. 

We also discussed how in the past, many rural families would turn to their accountant or lawyer for this work, but we are now seeing these advisors reach out to organisations like Rural Coach, to assist.

To better understand how and why this shift is occurring, we sat down with Fraser McKenzie of McKenzie & Co and asked him to reflect on his thoughts and experiences in the succession planning space.

Based on your many years of accounting experience, what in your view makes an effective succession planning facilitator?

When you’re sitting down with a family to discuss succession planning, I think that impartiality and experience are key, together with being a people expert who understands how to interact with people from all walks of life.  Facilitators also need to have good training behind them, with a range of proven tools at hand so they can initiate and manage conversations, even the difficult ones.

It’s not an easy role, and in my view, you can’t suddenly step into the role of being a Succession Planning coach and assume that it’s easy or anyone can do it – that’s not the case.

In fact, as part of my own continued study, I completed two papers at Massey University recently, both focused on succession planning and facilitation.  These studies only confirmed what I already had observed over many years of accountancy practice and that is, that independence and the ability to coach and lead conversations are more important than anything else when it comes to succession plans.

Why do you think emotions can run high for rural New Zealand families embarking on succession planning?

In my role, I’ve observed many farming and non-farming families embark on succession planning - and it goes without saying, that things are emotionally different between the two. 

That’s because with farming families, there is the farm (the land itself), the farming business and all of the family to consider. 

For everyone at the table, there is a deep connection with the land, so what is a fair result for everyone in the family is a lot more complicated, often because the children have been born and raised on the farm. 

Their level of engagement and involvement can be immense, plus you have the parents who are wanting to maintain family relationships through the process, so that adds another layer of complexity too.

Is that why you recommend Rural Coach to your clients?

Yes, I really like that the Rural Coach team is trained for exactly this type of scenario. 

Unlike accountants or lawyers, the good thing with Rural Coach is that they have a zero view of the world when they first step in the room to begin the succession planning facilitation.  They will not know your family, and so that means that they bring no baggage to the table – they are impartial, and independent and that is one of the most important things of all.

Quite simply, they have no preconceived outcomes or ideas.  They are simply there to engage and facilitate conversation.

Whereas, by comparison, it is almost impossible for a family accountant or lawyer to come into the same situation and be entirely neutral. 

Our previous relationships mean we always have some information and so we start from a conflict-of-interest position.  Rural Coach don’t have this – they start with engagement with the entire family at the outset, then they keep everyone on track as they walk through the planning process, and at all times they operate with a high level of transparency with everyone in the room.

What do you think worries farming families the most when they embark on succession planning?

By far, the most important thing to rural families over and above anything else, is the preservation of family relationships.

The last thing that parents want is to see family relationships damaged, or worse, destroyed because of poor communication or assumptions being made that aren’t correct.

Because of this, I see people defer the conversations as they want to avoid conflict.  But in my view, you are much better to deal with these conversations when you’re in good shape personally, rather than see things end up where each relative has legal representation, with all of the conflict and tension that this can generate.

You’re far better to have conversations that are guided and managed, so that the conversations keep going.

What about ‘going it alone’ as an alternative option?

While some families might think they can go it alone, or not want to pay the fee for a facilitator, I’m of the opposite view.  The cost can be significantly more if each party has lawyered-up and the personal cost can be that families are destroyed, with impacts on mental health and people’s state of mind.  This is a terrible price which doesn’t have to happen if you have good independent support from the outset.

So what do you see as the accountant’s role?

Having worked alongside Rural Coach, I know that they place immense value on the collaborative role of the accountant and other legal and on-farm advisors too.  For example, our input assists them with the creation of a more robust, fit-for-purpose and feasible succession plan, and those considerations are never overlooked by the coaches I’ve worked with.   

Thereafter, where I see the accountants and lawyers’ key role is listening to the outcome of the succession planning process, and then creating the necessary structures and actions to bring the desired outcome to reality, confident that these will meet the client’s current and future needs.  

What would you say to a family considering making the call? 

For families considering getting started, my view is that it’s never too early to get underway, more so because you can always circle back to the plan if you’ve started early. 

Then, as they embark on the process, I remind all my families that they need to be prepared to be honest about where things are at, and their future aspirations.  Be brave to step up and have the transparent honest conversations that matter, share your aspirations while you can, and then work together with your family on a strategy so that there are no surprises.

Lastly, I point out to them to do things their way.  No two succession plans will be the same because no family situations are the same.  That’s why Rural Coach’s independence, process and experience is critical because they can make the process unique to you. 

Any words of advice for fellow accountants?

My recommendation is that accountants who are asked to undertake succession planning for their clients and their families, do their due diligence to assess whether they are conflicted in any way. 

In our case at McKenzie & Co, if we perceive a conflict of interest, we immediately step back and reach out to Rural Coach to get the job done independently and with all of the family involved in the decision-making.

They [Rural Coach] have never let us down and that is why we trust them to help our rural clients move ahead.