Offering retiring Advisers 8% of their total assets under management (AUM) if they transfer clients with a minimum of £10m to its DFM proposition. For that amount an adviser would be paid £800,000 (8%)
Sell and go – Acquisition Deal Option
Offering 8% of AuM transferred to our client’s inhouse investment proposition within 6 months. The minimum AuM required to be transferred under this option is £10m with no maximum.
An adviser charging 0.5% ongoing adviser fee would achieve 16 times their recurring income!
Clients will be moved to a centralised adviser proposition with ongoing Adviser charges of 0.5% and typical TER of c1.7%. Our client wants to ensure there is no client detriment moving the clients to its proposition.
Assets that are not suitable to move can still be acquired at a lower multiple on this element of 2 times annual RI.
Sell and Stay – Create an immediate capital event from sale of some clients and stay advising
This suits an Adviser that is not ready to fully retire yet but wants to create an immediate capital event. The Adviser must have a minimum of £15m that will be suitable to move to our client’s inhouse investment proposition during the first 6 months.
Example based on £15m portfolio suitable to be moved
- Sell 20% i.e. £3m and get 8% = £240k
- Retain 80% i.e. £12m and get 2% upfront = £240k
Upfront payment = £480k (this represents 3.2% of the FuM upfront which could represent 6.4 times RI for an Adviser charging 0.5%)
Plus, the Adviser will continue to receive 95% of the RI on £12m for as long as the Adviser stays advising
Plus, the Adviser will receive a final payment of 2.75% on £12m on retirement i.e. another £330,000
Thus total capital sum of £810k (5.4% overall) plus 95% of any income (initial or ongoing fees) in the intervening period with no more FCA fees, FSCS levy, PII premiums, compliance costs, admin or technology costs.
This also offers the opportunity to de-risk advisers from past advice liability subject to maintaining run-off cover and in the event of a limited company until this is wound up.
The Acquiring Company
Established in 2007, this multi-award winner of major industry awards over the past few years including Best Fund Platform has shown substantial growth. With Group turnover in 2020 of c£185m with EBITDA of £74m they have strong financials showing year-on-year growth to continue acquiring client assets. As well as having open architecture the firm have grown their inhouse funds to £12.5 billion with over 90,000 individual clients invested in their suite of fully diversified, discretionary managed investment solutions. With wide exposure to world-class investment managers as well as diversifying their investment by asset class and geographic region, their clients benefit from having more potential to grow their money and manage volatility, all in one Portfolio.
The aim of this offer is to provide a viable exit strategy with market leading deal terms while also ensuring that clients retain quality, regulated advice, and ongoing servicing.
Call us now on 0208 0044 162 to discuss this further
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The information contained in our advert including any on target earnings information are given in good faith and IFA Acquisitions Ltd uses all reasonable efforts to ensure that it is accurate. However, IFA Acquisitions Ltd gives no representation or warranty in respect of such information and all such representations and warranties, whether express or implied, are excluded. No liability is accepted by IFA Acquisitions Ltd for any loss or damage which may arise out of any person relying on or using any information within this advert.