The financial advice acquisition market shows no sign of stopping and it seems like every day a new consolidator enters the fray prepared to throw millions of pounds at firms.
The array of different players in the M&A game means that the exiting advisers have a variety of offers to sell their business.
They can go from full sale to asset purchase – to a buyout scheme. In 2021, Evelyn Partners, previously Tilney Smith & Williamson, launched a succession programme to give financial advisers approaching retirement the opportunity to provide a new home for their clients.
At the time of the launch, the group said it was “keen to talk to advisers who don’t have a succession plan in place and wish to explore bringing their client book to the firm”.
Some five UK advice firms have now signed up to Evelyn Partners’ succession programme – with Equilibrium Financial Consultancy the latest to join the company.
International Adviser spoke with Richard Dawes, head of strategic relationships at Evelyn Partners, about why the firm was keen to throw its hat into the M&A ring.
Consolidators vs Evelyn
Dawes said the backdrop of ageing population of advisers, increase in sellers and quality client banks made it an easy decision for Evelyn to set up the programme.
“We have a great financial planning proposition and have invested heavily in technology in recent years,” he said. “Those joining the firm through our adviser succession programme get to benefit from the considerable investments we have made across the group.
“I don’t think all of the consolidators have got a client-centric approach. Some of the consolidators are brand new and don’t have a financial planning operation.
“They’re planning to buy a bucket load of businesses, and at some point, integrate them all. Some of them have already bought a load of businesses and have yet to integrate them, and don’t know what they’re long-term proposition is, while some of the businesses are actually more interested in the client assets rather than the clients.
“We’re not like a lot of the other consolidators, who will just buy anything. We are more about focusing on the businesses that have the right culture. We would be happy to buy as many of those as are out there. But it’s about finding those right businesses.
“As part of the adviser succession programme, we hire the individual/teams at the relevant firms who will then invite their clients to become clients of Evelyn Partners and work with us prior to the advisers’ retirements to handover their clients to new advisers.”
Price
One big factor over the last few years in the M&A advice market has been the importance of price for a business.
Values have skyrocketed – but IA recently discussed how much impact interest rate rises will have on the market.
Evelyn Partners is not going to be offering high prices to attract firms to its programme.
Dawes said: “Whatever commercial deals we put forward are going to be competitive in the marketplace – but we are putting forward client experience as one of the attractions of Evelyn Partners.
“A lot of the time, clients go into a service proposition that is wildly dissimilar to the one that they’ve got at the moment. They end up in something that’s more expensive, or they end up in something that reduces the client service.
“We’re never going to be the one chasing the highest payment in the marketplace. We are looking for the good quality firms with some good quality clients, where they want the high level of service to continue.”
Long-term plans
Evelyn Partners sees high growth potential with the programme – and expects it to “run for a number of years”
Dawes added: “There’s no urgency to go out and buy businesses. I’m looking for the right ones. I’m not going to buy businesses for the sake of buying businesses. We don’t have to do a number of set deals in a year. This is about actually finding the deals that fit with us. It will continue to go as long as the market is there.”
Dawes also did not dismiss that Evelyn’s programme could possibly go international.
“There’s no reason why we can’t do that,” he said. “We do a lot of international business. There would be regions of the world where it’s probably more expat-driven. It would be UK focused but expat driven.
“The business is really successful, who knows where it’ll end up expanding into.”
