Financial planning firm eyes UK expansion

Company says that ‘a lot’ of advisers are not looking to sell to ‘bigger players in the market’

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More and more firms are entering the financial advice M&A market every year. One of the latest companies to show acquisitive ambitions is Finura.

The Benchmark Capital-backed firm made its first deal in February 2021 with the acquisition of IFA business James Harvey Associates for an undisclosed sum.

But the firm does not want to stop there.

M&A activity

Nathan Mead-Wellings, managing director at Finura, told International Adviser: “We founded the business in 2014 and we have, up until the acquisition of James Harvey, grown entirely organically by word of mouth and referral.

“As we’ve focused on creating as many efficiencies within the business as possible, we found ourselves with capacity within the team.

“We looked at the modelling and the forecasting and our business plan and thought we could probably turbocharge the growth story a little bit, and that’s what gave us the confidence to think we can look for an acquisition.

“I would like to be a recognised name in financial planning. What covid has proved, I think we already knew, is that traditional face-to-face advice experience can absolutely be supported by a dynamic virtual advice model.

“I think that accelerated our ambitions to have regional hubs. In five years, I certainly like to think our footprint in London, the southeast and the home counties is larger than is now.

“More broadly, within the Benchmark Capital and the Schroders group, there’s an opportunity, we hope, to grow the Finura brand.

“Why couldn’t we sit alongside Cazenove on the private wealth arm, or Schroders Personal Wealth on the retail side?”

Strategy

Finura’s growth plans are ambitious, but the company is not in a rush to expand.

“There’s a lot of businesses on market, which look fantastic,” Mead-Wellings added. “But for us, it is about finding the right shape and the right size, first and foremost, and it is about finding a business that had the same values and principles as us.

“We have a shareholder in Benchmark Capital, backed by Schroders, but we have independence of what we do. We’re profitable and have free cash on the balance sheet, so there isn’t really any financial limitation, within reason, on what we can do.

“I think it goes back to us being very protective of what we’ve built today, and only looking to acquire when we can accommodate it in our own ecosystem.

“What we don’t want to do is acquire, and then have to find and onboard five advisers to deal with that. Not because we don’t think there are five advisers who could be very good to recruit, we just have a specific way of doing things.

“We are ambitious, we don’t want it to stop here. But we’re in no rush. We’ll go at the pace we need to continue to use the capacity we have within the business. We’re not looking to build this and flip it in five years.”

Competition

The firm is trying to become active in a very congested market.

There are many different types of firms looking to do deals now and standing out from the crowd is hard.

Mead-Wellings said: “We don’t come with a 10-point plan, we probably have a bit more flexibility than some of the larger consolidators and we can be a little bit more flexible in our approach.

“I think one thing we absolutely do look for is a counterparty, a seller who genuinely is interested in remaining in the business for the handover period.

“It’s only with that handover period, in our view, that you can properly look after those clients and reassure them, and make that relationship work.

“I think the market has been pretty competitive. We are going up against businesses that have that private equity money, they are doing multiple deals.

“But what we’re feeling, seeing and hearing and the feedback we’re getting is that there’s a lot of business owners out there who maybe aren’t attracted to some of the bigger players in the market.

“What will be interesting to look at moving forward is the motivation of some of the acquirers; are they doing this for assets? Or are they doing it to deliver a financial planning service and experience to the clients?

“Some might be doing for it all of the above. But if they are PE-backed, they look to flip it in three or four years. If you were a cynic, knowing how PE works, you might assume at some point they would want to exit.”

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