National independent financial planner and wealth manager is actively seeking to acquire well-run and profitable IFA businesses with upwards of c£20m FuM or full/partial buyout available for large IFA firms
Our Client is a highly profitable National Independent Financial Advisory Group with revenue of £25m and AUM c.£4bn. They have 72 advisers and 245 staff in total operating from 20 offices. With the backing of a well-respected and well-funded mid-tier PE House plus mainstream bank they have funding in place to deliver their 3 to 4 year plan of acquiring 25-30 IFA firms.
Set up 15 years ago with a view to consolidating the IFA market they have many years’ experience of makingover 40 acquisitions of IFA firms and are considered one of the longest standing active national consolidators in the UK.
They have already been through the challenging period of integrating hub acquisitions unlike many other peerswho still have these challenges to come. With a ratio of Support staff to Advisers of 3:1 your clients will have attentive Advisers who are suitably qualified to provide advice in all areas of financial planning
They have a strong, client-centric and compliance focussed culture and all their acquisitions must share theirethos and client centric culture. Offering fully independent advice with open architecture they utilise all major platforms and third party DFM’s. In addition, they also have strong performing inhouse discretionary portfolio management which is a highly cost-effective solution which performs well and is very well received by clients.However, acquisitions are non-contingent on making any changes to investment or charging structures.
Sell and Retire at Completion or 1 – 2 years after Completion
They are interested in acquiring financial advisory businesses where the vendor plans to retire at completion or 1 – 2 year after completion. Equally, they are interested in vendors who wish to join them and further grow and develop their business with them.
They are flexible on deal structures and provide specifically tailored structures that meet the vendor’s needs and requirements.
They pay up to 50% up front and pay the remaining consideration within two years. Deals under this structure are typically a multiple of between 3.3 and 3.8 times annual recurring income of between £130k and £2m.
Sell part of the business and stay on 3 – 10 years to benefit from future growth
A second alternative option for businesses with EBITDA of typically £200,000 to £2m has been developed which enables the vendor to take some cash off the table to reflect their efforts to date, whilst retaining a significant notional stake which will be cashed when they decide to retire and trigger the second earn out. Attractive to those vendors who aren’t quite ready to fully exit and, with our client’s assistance, wish to grow their business further. The multiple of EBITDA applied to the second earn out is the same as the first. The beauty of this option is the vendor has full flexibility on when they chose to retire in the future whilst also receiving cash up front and sharing in the upside on growth post deal.
To ensure there is a smooth transition of clients, our client will provide from existing resource or externally recruit new Advisers to shadow the Vendors to facilitate their retirement. The cost of these advisers will not impact EBITDA.
Acquisition Deal Value
Competitive multiple of:
- Recurring Income of 3.3 to 3.8 times
- EBITDA – typically 5.5 times or more
- Share purchases considered
- Retaining equity on larger deals incentivises retention and growth
- Vast experience: they have acquired over 40 financial advisory firms
- Over many years they know the sector inside out. They use this expertise and knowledge to assess what will work successfully for you and for them plus clients and staff
- Their flexible approach means they can create a mutually beneficial deal structure and timetable.
- They have a clear, tried and tested step-by-step process
- They pride themselves on delivering a client-centric, ethical approach: your clients will be looked after to the same standard that you have done for many years
- There is no requirement to move clients to a centralised investment proposition as these can be left on open architecture
- Clients can remain on existing charging structures and there is flexibility on frequency of review meetings.
- DB Pension transfers will be considered, subject to due diligence
IFA Client Bank Criteria
- Minimum Recurring Income of £130k
- Average client size should be £1,500 per household
- Nationwide – all locations considered
- This will suit small to mid-sized IFA firms with up to £2m EBITDA
- Nationwide opportunities (all locations considered)
- Existing Office locations – London / Home Counties, North East, North West, Yorkshire & Humberside, West Midlands, East Midlands, East Anglia and South West
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.