Your IndustryNov 27 2015

One in five IFAs hunting for a buyer

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One in five IFAs hunting for a buyer

More than half (53 per cent) of IFAs surveyed by Harrison Spence are looking to expand, with just under one in five (18 per cent) being actively on the acquisition trail.

The consultancy’s poll among 125 respondents also found that a third are looking to expand organically and recruit more staff, while 5 per cent have been unable to obtain the right finance to fund acquisition plans.

Nearly one in three who completed the survey said that they could be dissuaded from selling their business by the right funding to invest and grow or facilitate a management buy out.

Managing partner Brian Spence explained the ambition demonstrated by the research corresponds with what he has seen in the market at the moment, with 77 acquirers of all sizes on their book at present.

He said: “We really are in a ‘he who dares wins’ environment today, there are many forward-thinking strategies that different IFA businesses can build in value. These include including building a vertically integrated business proposition and take a slice of action from all areas of the investment and advisory piste.”

He suggested that advisory firms can potentially build their own platform to increase margins, or even apply for discretionary permissions.

“This can be more straightforward than it sounds – and can be white labelled initially.”

Other ideas included getting into strategic partnerships to assist in building a business via acquisition in a specific geographic area, or moving to restricted status, thereby de-risking the business, increasing time spent with clients and reducing costs.

To grow organically, Mr Spence said IFAs can bring in graduate, pointing out that some universities have courses that provide credits towards Chartered status.

Harrison Spence’s research comes after earlier this week ex-Bellpenny director Dawn Pearce-Herzberg has told FTAdviser she is launching a new business that will be the ‘missing link’ in the IFA acquisition market and drive more deals through to successful completion.

Her new business, called Vines Row, aims to reinvent the existing ‘match-making’ model currently being offered to IFA vendors and acquirers.”

The launch of Vines Row came just weeks after IFA acquirer Bellpenny put 51 jobs up for consultation, with potential redundancies centered around the operations team.

The two offices affected are Reading and Birmingham, the former being Bellpenny’s head office where the largest number of employees are based and therefore the majority of redundancies are expected.