Fairstone Group  

Fairstone in discussions with 45 advice firms

Fairstone in discussions with 45 advice firms
Lee Hartley, CEO of Fairstone Group

Adviser consolidator Fairstone is in “active discussions” with more than 45 firms about joining its buyout programme, according to its 2020 results. 

According to its statement for the year to December 2020, the firm has made 10 acquisitions and an additional 10 firms joined its downstream buyout model last year. 

The firm was in further discussions with at least 45 firms about joining its programme by the end of December. 

The downstream buyout model involves integrating firms first and supporting their growth before acquiring them at a later date. 

Lee Hartley, chief executive officer of Fairstone, said many of its planned acquisitions last year were delayed due to the pandemic but the firm nevertheless managed to complete them all during the year. 

The consolidator’s results showed last year's acquisitions had pushed assets up 32 per cent to £10.7bn. 

Recurring income had increased to £49.3m in 2020, up from £41.5m in 2019, representing 73 per cent of advisory revenue.

Repeating income, which involves all revenues generated from existing clients, stood at 92 per cent of turnover.

Total revenue for the 2020 financial year grew by 8 per cent, to £69.7m, an increase of £5.3m.

The number of clients during this period has risen by 18 per cent from 34,000 to more than 40,200.

Hartley said: “From an acquisition perspective, the year was very heavily back-end loaded as the effect of a national lockdown delayed a large amount of our due diligence programme. 

"I’m delighted to say that every single deal we aimed to complete in 2020 was concluded, although naturally these were later than planned. 

“Ultimately this means our profits for the full-year are quite heavily understated when compared to the steady-state performance.”

In February, Fairstone announced it had secured investment from global private equity firm TA Associates.

At the same time it said current private equity backer Synova was reinvesting in the group while current funder Alcentra had also increased funding available to the company for acquisitions.

Hartley said this backing “underpins and accelerates” its ambitious acquisition programme.

He added: “Fairstone’s considered approach, together with our proven business model and the significant financial backing that we have at our disposal, allows the management team and shareholders to look forward to 2021 and beyond in a positive manner.

“As we sit today, 10 months on from our last financial year-end, we have already seen run-rate revenues hit £100m when we factor in the impact of our most recently completed deals and Fum has exceeded £13bn. 

“The momentum we have carried forward into this period is highly impressive and only shows signs of accelerating.”

This year it finalised the purchase of Hammett and Petch Financial Planning which secured more than £60m in assets for the national wealth manager in its first deal of the year. 

Following this, in March, the wealth manager acquired Glasgow-based Chartermarque.

Yorkshire-based Imagine Financial Planning and Scotland-based Forbes Lawson Wealth Management joined Fairstone's buyout model in July.