Consolidator  

Consolidator adds two advice firms to buyout programme

Consolidator adds two advice firms to buyout programme

Fairstone has added two advice firms to its buyout programme in a move which sees the consolidator gain £200m funds under management. 

Once acquired at the end of the process Yorkshire-based Brantwood Financial Planning and Durham-based Advanced Financial Services will add more than 700 clients to the national advice firm as its pushes ahead with its pipeline despite the current coronavirus lockdown. 

The two advice firms bring with them a combined gross fee income of £1.5m and 16 advisers, with the deals set to be completed via Fairstone's downstream buy-out model. 

In the first quarter of this year three companies were acquired using the model, which sees the consolidator take a stake in an adviser before integrating and then purchasing it. 

Lee Hartley, chief executive at Fairstone, said: "We are always looking for strong, high quality businesses with ambitious growth plans to join Fairstone and whilst we recognise that we are all moving into a different climate with challenges ahead, we are in a strong position and we will continue to onboard new DBO firms at our forecasted volume."

Mr Hartley recently told FTAdviser the company remained firmly on the acquisition trail and was on track to complete ten deals through its downstream buy-out model this year. 

Fairstone said many businesses it had integrated through the model had exceeded growth expectations, with the company's own figures showing a 15 per cent outperformance across its portfolio of acquired advice firms. 

This means the acquired firms have delivered higher revenue, profits or growth than originally forecast in the buy-out agreement. 

Paul Dickinson, principal at Brantwood, said the deal would allow his firm to spend more time helping clients as a result of Fairstone's compliance and regulatory support. 

Mr Dickinson added: "Like us, Fairstone hold corporate chartered status and we were attracted to their genuine independence and the fact that we would not be shoe-horned into centralised investment strategies or higher charging structures for clients."

Martin Bage, principal at Advanced, said: "As a small firm of advisers, we were looking for the support and strength from a national firm for our clients, whilst still retaining the personal relationship we have with them.

"This gives our clients and ourselves the security we need in this ever-challenging world."

Fairstone recently confirmed it was honouring all bonuses and pay rises amid the coronavirus lockdown after cutting £1.4m in costs from the business. 

The company also said it was not considering any redundancies as a result of the savings it had made through reducing non-essential spending across marketing, external consultancy and travel. 

rachel.mortimer@ft.com

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