Scott Carmichael

Founders spend years building a business, and often years preparing it for sale. Escala says too few spend adequate time preparing for the transition and the period immediately after settlement, when concentrated business value is converted into liquid capital.

When managed well, founders can establish a pathway to resilient sustained wealth. Without enough groundwork, the impact can be long-term and compounding.

Founders are selling, but settlement is not the finish line

The complexity of the transition that follows a successful business sale cannot be underestimated. While settlement may feel like the end of the journey, it marks the beginning of a very different set of decisions and adjustments.

Scott Carmichael, Head of Advisory at Escala, said, “Settlement of a business sale or transition can affect every aspect of daily life, with the challenges being just as psychological and emotional as they are financial or operational. For this reason, the plan needs to consider the whole of life alongside investment planning.”

Founders who sell businesses have invariably been consumed by the day-to-day operations of the business and the sale process itself. In many instances, little forward planning has been undertaken.

“The advisor’s role is first and foremost to listen, understand where a founder’s ambitions lie, identify potential risks, and help create a clear vision for what comes next.”

Many founders move from running a business they know intimately to overseeing a significant pool of liquid capital across markets and opportunities that may feel far less familiar.

“That shift can be confronting,” Carmichael said. “Even simple measures, such as establishing a regular ‘salary’, can reduce uncertainty and support better decision-making.”

“Continuity is critical. While founders may have long-standing relationships with accountants, lawyers and other trusted advisors, the wealth advisor is the element that brings these functions together, ensuring they work collectively to formulate a cohesive strategy and a clear vision for the future. Keeping those relationships aligned is an equally important part of managing risk.”

The post-sale strategy is a critical wealth issue

Escala believes the initial post-sale period is one of the most critical, yet often overlooked, stages of the founder wealth journey. A successful exit creates an important opportunity to pause after what is often one of the most significant events of a founder’s life. It provides the time to evaluate personal priorities, family objectives and long-term ambitions before committing capital. It is equally important to recognise that developing a sound strategy for a life-changing event takes time. Over the years following a sale, objectives and vision often become clearer.

“Founders need to understand their liquidity needs, tax position, income requirements, family objectives, retained business interests and long-term investment horizon,” Carmichael said.

“That requires careful consideration. The first question should be what the capital needs to achieve, not where to invest.”

Simon Dawkins, Head of Capital Markets and Escala’s Direct Investment Group, believes without a plan, founders can move too quickly into risk assets, sit too long in cash, or move back towards concentrated direct opportunities because they feel familiar.

Escala’s Direct Investment Group, led by Dawkins, was established to meet Escala’s UHNW client demand for access to institutional-quality direct investment opportunities across all asset classes; and plays a very relevant role in this scenario.

“For example, we see an important role for a curated portfolio of direct investment-grade bonds to provide capital stability, liquidity within two to three days, and materially higher returns than cash. Being in such a liquid strategy to start with allows for quick redeployment into risk assets as prescribed by the client’s advice team,” said Dawkins. “Capital needs to be working from day one, and this strategy gives clients, together with their advice team, time to refine their target risk profile and allow staged investment into less liquid risk assets.”

Carmichael commented that it is not uncommon for the entirety of a founder’s sale proceeds to be directed to the Direct Investment Group on day one.

He added “it is an excellent example of how an integrated model, which combines wholesale advice, Chief Investment Office oversight, and institutional-quality investments can assist the shift from wealth creation to wealth stewardship.”

The role of wholesale advice

Carmichael concludes that a key part of the ongoing advisory relationship, much like the sale, is helping founders create continuity through that next phase. This may involve working alongside spouses, family members, accountants and other trusted advisors to ensure decisions remain aligned and the family’s objectives are clearly understood.

“These are deeply personal matters and, ultimately, the goal is to provide founders with confidence that their wealth is structured not only for today’s needs, but for the people and priorities that will matter long into the future.”

The post The biggest challenge to founder wealth begins after the business is sold appeared first on AdviserVoice.

Scott Carmichael

In the face of ongoing market volatility, Scott Carmichael, founding partner and investment adviser at Australia’s leading private wealth and investment advisory group, Escala Partners, is reminding investors that this isn’t a new phenomenon but part of a familiar cycle.

“Market volatility today is no different to any other upheaval over the past few decades,” says Carmichael. “What sees investors through these times is following the golden rules – long-term investment in high-quality, diversified assets across, and within, asset classes.

“That is the way for long-term outperformance. The risk of short-term underperformance comes from making the wrong decisions at the wrong time, that is making emotional, behavioural type decisions.

Carmichael’s investment commandments include steering clear of speculation, avoiding concentration risk and having a deep understanding of personal liquidity needs, income requirements and a clear view of the client’s family circumstances. “Investment planning goes hand in hand with succession planning around the type of assets that families have,” he adds.

One principle he lives by is the “4 per cent rule” or its inverse which is multiplying your annual living expenses by 25 to determine the corpus required for retirement. “The rest of your portfolio basically runs for free,” he says.

Ben James, fellow Escala co-founder and investment adviser, echoes Carmichael’s focus on fundamentals. He notes that valuation metrics are notoriously difficult to use as timing tools. “Timing getting in is hard, but timing to sell is even harder,” says James. “In periods of volatility like we saw in April, we reflected on our long-term rules to stick with high-quality investment managers, let capital compound, use asset allocation as your key defence and trust the process.”

Both advisers emphasise the dual role they play- not just guiding portfolios but providing emotional counsel during market swings.

“Advisers often act like psychologists,” says Carmichael. “We need to make sure that we’re communicating in both good and bad times, and stress-testing our client portfolios.”

That means asking clients tough questions like, “How would you feel if you faced a 20 per cent correction?” and ensuring portfolios are structured to survive those scenarios.

For Carmichael and James, the message is clear: in a world of unpredictable markets, discipline, communication and a robust strategy trump any crystal ball.

Ends

Media contact

Simrita Virk, Capital Outcomes

simrita@capitaloutcomes.co

About Escala Partners

Founded in 2013, with offices in Sydney and Melbourne, Escala Partners is a premier private wealth investment and advisory group dedicated to delivering sophisticated, high-quality investment solutions to high-net-worth individuals, family offices and institutional clients. The firm is committed to providing objective and tailored investment strategies, leveraging deep expertise and innovative technology to create long-term wealth for its clients.

Discover more about Escala:  https://escalapartners.com.au/

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