Morrish: ‘We came out of the market more or less for 18 months’

Speaking to FTAdviser, he explained that Succession went into the buying market at the beginning of 2014 when it was working with over 100 IFA businesses across the UK and was getting ready for RDR.

He said: “We had a like-minded community of firms, but probably more relevantly and possibly without us realising it, they were like-minded also in character and nature.

“I suppose one must look at it in terms of what was made manifest around that: it was things like high-net-worth client banks, very professional orientation, culture and people oriented.”

We were very focused on people who were culturally strong.Morrish

Morrish said the business quickly got to around 40 firms it acquired by 2018. However, soon afterwards, the buyer market began to change as there were a lot more buyers around.

“There's a danger of buying for the sake of it and I suppose buying for the sake of it can have two problems with it,” he said. “One, you'd lose focus on what you originally were focusing on things such as quality, and two, you can be building on a somewhat insecure foundation.”

He explained that Succession had some self analysis around whether it should scale based on everything it was doing, from culture to learning and development, lateral hires to the tech platform, the business proposition and more.

“We knew full well that we were always going to keep hold of the things that created a line of reference and demarcation for us being an independent proposition. We were very focused on people who were culturally strong. 

“Fundamentally, we were never going to break teams up when we bought them. We're not buying it just to chuck costs at the door because you ruin the client relationship at your own peril and so the principles were well established, but the foundations we needed to rebuild in some dimensions.”

Morrish added: “We came out of the market more or less entirely for 18 months from the end of 2019 through to largely the end of last year, but very knowingly, because it allowed us to focus on what the business growth plan was from then onwards.”

He explained that Succession had grown through a large number of acquisitions which essentially meant it needed to invest in the support infrastructure including: people, process, development, technology, and business support functions.

These areas of the business were Succession's priority during that period so that it could build on still stronger and more effective foundations.

"We maintained discussions with firms to potentially buy in that period, but strengthening the Succession business for them to join was our overall priority at that time," he said.

Since then, Morrish said Succession has essentially gone back to where it was with more of the same but with “a much stronger constructive business”. 

“The business is much more in its own way profitable, much more surefooted, which has meant we can look at the market a bit more analytically, and a bit more selectively,” he commented.

The Aviva deal

In March, as reported by FTAdviser, Aviva announced it had bought Succession Wealth in a deal worth up to £385mn, subject to regulatory approval.

In a stock market update at the time, Aviva said the deal “significantly enhances” its presence in the wealth market as more people seek advice for their retirement and savings options. 

The company said through Succession Wealth, Aviva will be able to offer advice to its approximately 6mn of its customers. Of these, 4mn are workplace pension customers with £96bn assets under management, and approximately 2mn individual pensions and savings customers with £139bn AUM.

Morrish said Aviva's acquisition of the firm did not play a part in Succession's time out from the market for 18 months and it was also not the period when it decided to sell up.

He said: "Our strategy will remain as it has been - to acquire high quality IFAs where, especially, there is strong client, people and cultural alignment.

"Aviva is fully supportive of the strategy, the continuation of it, and of the approach Succession has to growing through M&A alongside the core growth of the underlying business itself."

Morrish explained that Succession Wealth will continue to operate as a separately regulated, independent, financial advice firm and will continue to use the Succession Wealth brand.

The deals so far

In January, Succession Wealth made its 60th adviser acquisition to date with Oxford-based firm Oxford Advisory Partnership (OAP). 

The acquisition was Succession's second this year, after Pannells, which it acquired earlier that month.

In December it bought JCF Financial and Bankhouse, which together with Pannells brought in £1.6bn of client assets.

Morrish said the deals done in December and January were much more focused on conversations the firm was having from the early to mid part of last year and said size was never really effective.

He pointed to a business like Bankhouse, which Succession bought for £60mn AUM, through to Pannels, at £1.4bn.

He added: “Really we were looking for the same things we always were which was fit, cultural relevance, strong proposition, a desire in some ways, de-risk the running of the business in order to focus on the client again.

"It was also to be part of something which I describe it as returning to your first love so allows you to return to your first level looking after the client and while staying in the team structure that you've probably already operated with.”

Morrish explained that the activity over those months was really been born out of the early part of last year. 

For Succession’s acquisitions, he said on average, the company only takes forward one in 11 firms that it has an introduction to.

“I think there's no point putting a firm's staff and its clients through a journey that ultimately could just be painful. It's not going to serve anyone,” he said. 

“Probably the best illustration of that is we've been aware of Pannels as a firm for five years and we've had a relationship with them so they've had a good chance to see us understand us work out whether we are the sort of people we say we are and essentially establish whether it's a good home for their staff and for their clients.”

sonia.rach@ft.com

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