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Success through acquisition – a case study. Mazars Financial Planning

  • By Sue Whitbread

Mergers and acquisitions continue to stir up interest amongst financial planners and advisers, who have been witness to dynamic changes in the advisory field. Following our in-depth look into the way Newell Palmer handles acquisitions in the March edition of IFA Magazine, Louise Jeffreys of Gunner & Co. continues our series looking at businesses which operate in this area. This month, Louise looks at Mazars Financial Planning, to gather an understanding of their aspirations when it comes to making acquisitions.

Mazars doesn’t necessarily come front of mind when thinking of national financial planning firms, however their continued development in this sector makes them a major player in the field.

The company was founded in 1940 and is the 5th largest accountancy firm in Europe with 18,000 employees and 270 offices worldwide across 79 countries.

Whilst the organisation is headquartered in Paris, Mazars provides clients with a full suite of advisory services, including audit, tax, corporate finance and financial planning from 19 offices in the UK. The UK operations run with a team of 1,700 employees and a turnover of more than £150m, with bullish aspirations to double that by 2020.

Adding financial planning to accountancy services

21 years ago Mazars recognised that there was a gap in their private client offering. They had focused extensively on their accountancy services over the previous 50 years, without developing their reach into client financial management.

As a result, Mazars Financial Services was set up in the UK in February 1996 offering financial advice to individuals, business owners and trustees, many of whom had been using the firm’s accountancy services.  In 2005 the division changed its name to Mazars Financial Planning, as it is known today, and set out its emphasis on providing long-term, independent advice and a bespoke service for clients.

Today the financial planning division looks after clients in the HNW class, managing the holistic financial planning needs of almost 1,500 clients nationally. Recognising the company-wide focus on excellence, Mazars Financial Planning is a Chartered Financial Planning firm, and a founding member of the CISI Accredited Financial Planning Firms.  Of their 18 planners, 11 are Chartered, along with 3 of their 8 paraplanners.  A focus on continued technical and professional development is at the core of their team culture, to ensure they are providing clients with the highest standards of holistic planning.

The business has picked up a gamete of accolades, including the Gold Standard Award from AKG for the last 6 years, New Model Adviser Top 100 2016 and New Model Adviser Greater London Region winner in 2017.

A strong growth story

Mazars Financial Planning has grown consistently and organically since it was set up.  Over the last 3 years it has delivered an average of 20% turnover growth annually.  This growth trajectory will take Mazars a long way to meeting their financial goals of increasing FUM from £600m to £2bn by 2020. To bolster that growth, Mazars have started looking at the acquisition market.

“We have successfully grown our business organically and will continue to do so” says Ian Pickford, Head of Private Client Services, “however acquisitions offer us the opportunity to accelerate our growth plans by adding to our existing skill sets and enabling us to reach critical mass in priority locations.”

Whilst Mazars are yet to make an acquisition in the financial advice sector, they have a long heritage of experience in acquisitions through their accountancy practice and indeed through their corporate finance team, which manages the M&A process for a variety of clients.

Acquisition criteria

With no ‘standard’ acquisition process, Mazars looks at each business opportunity independently, however an essential factor they consider is the cultural fit of the selling organisation.  With such a strong internal culture in place, they know that the success of any acquisition will fall strongly on cultural synergies, such as the firm having proven its highly technical planning capabilities.

Location is also important. Whilst clients and offices are already dotted across the country, there is a strategic focus on London, Birmingham and the North West, enabling these offices to get to critical mass.

Often, they would be looking for advisers in a newly acquired business to remain in post after the acquisition, becoming part of the Mazars team.  Joining such a highly-regarded brand can bring significant value to business sellers – and particularly to their clients.  The breadth of services, knowledge and skills inside Mazars is a great opportunity, increasing the ‘stickiness’ of clients as the firm undergoes the transition as part of a larger  firm.

As Pickford explains: “We can add value to a seller’s existing client base across Mazars’s range of services. As a wholly owned subsidiary of Mazars LLP, we have access to the knowledge and skills of a wide variety of professionals both in the UK and in another 79 countries around the globe.  We are also building for the future with our vibrant graduate scheme, which is developing quality professionals who are part of our succession plans.”

A team approach

Investment management is run in house, with a team dedicated to investment research and analysis, managing both discretionary and advised assets.  This gives planners the time they need to focus on what they do best – which is in building and supporting long term client relationships to ensure that their financial needs are met effectively.  They can then do this knowing that the technical side of the service, including the all-important investment management provision, is run to the highest standard within the business.

Recognising the continued importance of offering holistic services to clients, an integrated private client team has been set up over the last 2 years. Here, financial planners work with Chartered tax advisers in multi-disciplinary teams to offer tailored and integrated solutions to clients and their families.

Since Mazars funds acquisitions internally, business sellers have the confidence of the security of their consideration, without concerns of external credit lines or additional third party restrictions affecting a deal.  The emphasis on an agreement which makes commercial sense for both parties is at the centre of any deal, along with clear growth opportunities for the future.

If you would like to know more about Mazars’ acquisition plans I’d be happy to share my experience further, drop me a line on louise.jeffreys@gunnerandco.com