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Success through acquisition – Louise Jeffreys latest case study analysis looks at Old Mutual Wealth Private Client Advisers

Following our series of profiles on active buyers in the IFA market, Louise Jeffreys, Managing Director at Gunner & Co., speaks to Dominic Rose, Director at Old Mutual Wealth Private Client Advisers, about their exciting business growth and acquisition strategy.

Old Mutual Wealth PCA was set up in 2015. Although a young business, it is very much established, shown by their impressive £1.5bn AUA. They are an active buyer in a dynamic market.

The financial planning business employs 45 financial planners across 5 office locations, stretching from London, Chester, Birmingham, Newton Abbot, to Shipley.

It places an overriding emphasis on building strong relationships with clients, promising a trust-based, and “no surprises” service. It is interesting to look at the journey they undertake with clients, guiding aspects around portfolio management as well as protection, and eventual passing of wealth in an all-encompassing service proposition.

 

The firm provides stability in this journey through their growing national business, which has developed both organically and through acquisition.

 

They’ve successfully made a series of acquisitions including JW Financial Planning in Cheshire and DQS Financial Management in Newton Abbot. This means they have developed crucial experience in buying firms, allowing the smoothest transition for the businesses and clients alike.

 

As well as this, the firm has seen strong organic growth through their growing network of professional connections and through the process of referrals from clients. This combination, along with its positive approach to acquire like-minded firms, puts them in a good position to continue to grow in the future.

Business background

Following launch in 2015, the firm became an appointed representative of Intrinsic, which is, in turn, wholly owned by Old Mutual Wealth.

The financial planning business shares and benefits from Old Mutual’s experience and brand – providing the strong backing which is crucial in a market founded on trust.

Nigel Speirs, Managing Director of the company, is passionate about delivering exceptional client outcomes. Having built a strong track record in strategic roles within advice businesses for over 20 years. Nigel joined Old Mutual Wealth in 2015 to lead the development of Old Mutual Wealth Private Client Advisers.

Acquisition strategy

Dominic Rose (pictured), Director of the firm’s London division, offers us his insight into what makes a perfect partner to their acquisition strategy.

Simply put, Dominic states that finding “businesses with matching client demographics is the most important factor for us.”  An example would be average client portfolio size – they can only consider businesses where the average client has at least £300k of investible assets, as the business is set up to focus on offering a first class advice service to High Net Worth (HNW) clients.

In addition, there is stronger alignment with a target business which has traditionally offered actively- managed investment solutions to clients, rather than following a passive approach.

When it comes to charging structure, those firms with ongoing charges of up to 1% are preferred.

Location, location, location

In general, the business is particularly interested in integrating firms which are close to its existing offices in London, Chester, Birmingham, Newton Abbot and Shipley – in particular acquiring the client banks of retiring advisers.

Given that a key priority of any transition is on building relationships, it won’t come as a surprise to discover that the company works hard to ensure that clients’ needs are effectively met. Where the adviser is retiring, there is an immediate emphasis on clients having face-to-face meetings with one of the Old Mutual Wealth PCA’s team of financial planners.  In the scenario where advisers are staying on post-acquisition, Old Mutual will also work closely with them to integrate them effectively into the new business and welcome them as new members of the team.

As we know, no two financial planning businesses are the same. Because of this, the firm does not approach all potential acquisitions in the exact same way, describing its strategy as being reactive to the seller’s business structure.

Typically Rose describes their position: ‘A business owner who does not wish to be involved with future client work as an adviser, will generally work with us for a period to affect an orderly hand-over of clients on a face to face basis. Our purchase proposition is specific to each business. We work with business owners to structure an agreement in a way that meets their objectives, as far as we are able to. We like to have informal initial conversations with owners, on a confidential basis, where we can understand more about their business and their personal objectives.’

Looking ahead at their strategy for growth, Rose considers that it isn’t so much about a set volume of acquisitions they wish to undertake, but is all about having the ‘right fit’ for each future transaction.

When it comes to what might put them off buying a business, Rose said those who make ‘esoteric’ or ‘high-risk’ investments are deal breakers for them.

A case study

We asked Dominic Rose to give us an example of what, in his view, makes a successful acquisition:

He highlights one particular example of a smooth transition of a business with 270 clients that they acquired, where the adviser was retiring.  Out of those 270, only one refused a meeting with their new financial planner. Stressing the quality of the hand-over service which was offered, Rose believes that the success in transition was down to the time and care taken to conduct face to face hand-over meetings for the majority of clients with their new financial planners.

This process has meant that the firm was able to reassure those clients that Old Mutual Wealth Private Client Advisers was the right home for them and would continue to fully meet their needs in future.

Six months on from the completion of the sale, every client has now been seen and their situations reviewed. No client will invest in a new solution unless it is demonstrably in their best interests.

Feedback from the clients has been positive and they are now settled with their new financial planners and dedicated support team.