Sterling McCall added £80m in assets under management and £700,000 of recurring income after adding two Surrey-based advice firms.
Sterling, which was recently acquired by Tavistock Investments as the core of a planned network roll-out, did not disclose details on the deal except to emphasise the offer it makes to all joining advisers of a loyalty bonus after the first year, plus a guaranteed retirement buyout offer in equity and cash.
Three advisers from the two firms, Key Benefits Ltd and Adviser Professional, have joined Sterling McCall following the transaction.
It follows on from a double acquisition earlier this month when it completed the acquisition of the assets of two IFA businesses, Grimsby-based Bromley & Coe and Financial Ltd appointed representative Meridian Financial Management, in the process adding around £50m in assets and about £165,000 in recurring income.
At the time Mr Moseley told FTAdviser he could not reveal the purchase price for the deal, but that it had been agreed on “standard terms” comprising of an up-front consideration followed by earn-out payments based on recurring income targets over 12 and 24 months.
He added the transaction was settled through a “purely paper swap”, meaning the vendors were paid in shares in the acquiring business.
Sterling McCall was acquired by aim-listed Tavistock Investments in May as the “cornerstone” on which a network of “several hundred” self-employed advisers would be built. The growth plans for the business could see Sterling abandon its IFA status and go restricted.
Steve Moseley, business development director, said the firm aims to build strategic partnerships with the advisers and recognises that many small, high quality advisory businesses wish to continue servicing their clients but need the support of a larger entity.
He said: “Coupled with the guaranteed buyout option at retirement, the Sterling McCall proposition is proving compelling to firms with whom we are in negotiations.”
Key Benefits owner Tim Cox commented that working within the Sterling McCall brand means he can continue to offer a small company service with the backing of a big company.
“In the new post RDR era, many advisers looking at succession planning find that they are having their businesses down valued by buyers,” he stated, adding that “by joining this network, we can ensure a safe pair of hands for our future and that of our clients.”
After the initial 12 months, the joining advisers will have the opportunity to become stakeholders in parent company Tavistock.
