Chartered financial planning firm Fairstone has seen its client base rise to 51,000 – a 25% increase on the previous year.
The figures were released as the firm updated on its progress at its annual conference in Newcastle.
The figures also showed a 11% outperformance across its entire portfolio of acquired businesses, “…with these firms delivering more revenue, profits and growth than either their own forecasts, or those upon which the buy-out agreements are based.
“This means that business owners who have chosen to go through the firm’s unique Downstream Buy Out (DBO) process, which ensures companies are fully-integrated with Fairstone prior to acquisition to provide a seamless transition for clients and staff, are realising greater overall sale values than expected upon final acquisition.”
The DBO process has seen a further two businesses recently move to full acquisition, with Darlington-based Belasis IFA, alongside Allensons in Wokingham, bringing in a combined gross fee income of £1.2m, FUM of £50m and a total of 20 staff.
The firm confirmed that moving forward, it expected to make a number of further acquisitions within the first half of this year.
What’s more, a further three businesses joined Fairstone’s DBO programme in recent months:
- Norfolk-based Hamlyn Financial Services Ltd, which specialises in pensions and investment advice and has £100m funds under management, bring total fee income of £800k and 1500 clients to the company as well as 12 staff. Stephen Grass, company principal at Hamlyn Financial Services said: “This was an opportunity to join a national Chartered IFA which would support the company’s growth whilst ensuring compliance standards are maintained to the highest level.”
- Dundee-based Findlay & Company Financial Services, specialists in investment and pensions planning, bring nine staff and more than £120m AUM to Fairstone, with fee income of over £1m. Steve Race, company principal, said: “Moving to Fairstone will enable our firm to grow and improve our business proposition for our customers, advisers and administration staff.”
- Andrew Cohen Associates Ltd, based in Ashdon, Essex, bring £1m in fee income and £145m AUM to Fairstone, as well as eight staff and 750 active clients. Company principal, Frank Banks-Seeney said: “I spent a long time looking for a partner firm to grow with. Fairstone ticked a lot of boxes – independent, a good reputation, no vertical integration and well resourced. I felt that as companies, we were like-minded in our approach and priorities – clients must come first.”
Lee Hartley, CEO of Fairstone said: “The needs of our clients always come first and to that end we implemented an extensive feedback programme on Trustpilot, which shows an overall client satisfaction rating of 97%, which is testament to our commitment that our client relationships should underpin all aspects of our business.
Lee Hartley
“Fairstone has also seen impressive growth through all of our business streams. Revenue and EBITDA performance has been substantially ahead of the prior year in each channel and importantly this is being delivered without any cross-subsidisation between our financial planning and investment management businesses.
“Our DBO programme is yielding exceptional results with a significant number of business being onboarded and coming through to full acquisition. These firms are showing consistent growth performance as they take advantage of the regulatory, technical and operational support that Fairstone provides.”
Fairstone’s Individual Buy Out programme, a unique structure in the market which enables individual advisers to build a long term, tax-efficient retirement fund and ensure continuity of service for their clients, has brought two further Chartered Financial Planners to the business. London-based Paul Miller and Surrey-based Andy Smith together bring an additional 222 clients and £46m AUM into the group.
Miller said: “The IBO agreement provides a meaningful opportunity as an exit strategy that de-risks my business whilst protecting the interests of my clients.”
Smith added: “Joining Fairstone and entering into the IBO works well for me as I benefit from a high level of regulatory and operational support to enable me to grow my business in a safe environment and a structured succession plan at the point when I choose to retire.”
Fairstone has recruited 45 new members of staff over the past year across the primary support functions of the business, largely in compliance, training, para-planning and IT. As a result, Fairstone now has 320 regulated advisers and 165 staff operating across 48 locations countrywide.
Fairstone has also announced that they have secured a further acquisition facility to supplement their existing capital commitment from their lead investor, Synova. This additional line of funding, which is a joint facility from HSBC and Lloyds, will support Fairstone’s ongoing DBO acquisition programme.
The banks can initially provide up to £30m into this structure with Fairstone deciding to take a 50% hold from each institution in the first stage of the facility.
Lee Hartley said: “Having the support of Lloyds and HSBC increases our financial flexibility going forward and as the Group continues to grow our available facilities will grow alongside. The initial commitment into the acquisition facility alone takes the total funding we have raised for business development purposes to £70m from inception.”
