Adviser network Sandringham Financial Partners has launched a programme to buy the businesses of retiring advisers.
The company's partner acquisition programme is for advisers who are already Sandringham members and those who are retiring but do not wish to sell to a vertically integrated consolidator.
As part of the programme, advisers will join Sandringham and then spend two years working with the company and their clients to prepare for the transition.
After retiring and the acquisition is complete, Sandringham will pay the seller 100 per cent of the business's income at retirement and then pay ongoing income over the course of three years after that, gradually going down from 75 per cent in the first year to 25 per cent in the third year.
Tim Sargisson, chief executive of Sandringham, said this would give advisers an incentive to keep their firms growing, since the amount of money they receive could potentially go up even though the proportion of the income they are paid is going down.
He said: "The sad irony of the advice profession is that many advisers spend their lives ensuring their clients are well-prepared to enjoy a financially secure retirement but fail to similarly prepare themselves.
"This is perhaps unsurprising, given the current dearth of appealing options for an adviser considering retirement, many of whom must choose between a disruptive transition for their clients or a reduced remuneration package.
"The partner acquisition programme has been born out of the need to properly and fairly remunerate retiring advisers whilst also ensuring that their client relationships, which have been so carefully developed over the years, are properly protected."
Sandringham, which was launched in 2012 with the financial backing of SimplyBiz founder Ken Davy, moved from the restricted model to independent status in 2018.
Mr Sargisson said since he joined the company in 2015 it has grown its membership from 130 partners to 181 and in that time had increased its turnover from £4.1m to £17m.
He said despite the slow growth in its membership, he was "delighted" with its financial performance and attributed this to Sandringham becoming more efficient and improving its back-office systems.
damian.fantato@ft.com
