Mergers and acquisitions  

Fairstone snaps up Bath & Bristol adviser

Fairstone snaps up Bath & Bristol adviser
Fairstone CEO Lee Hartley and Sovereign Wealth Management principal Marcus Harris

Fairstone has bought a south west-based financial planning firm in a move that brings 1,500 clients to the group.

Sovereign Wealth Management — which has offices in Bath and Bristol — has been bought via Fairstone’s downstream buy-out model, where the consolidator takes a stake in an advice firm before integrating it typically over a two-year period and then purchasing it.

The deal brings with it eight advisers and secures a gross fee income of £1.25m for Fairstone.

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It comes less than a week after the national advice firm announced it had agreed its 10th new deal under the downstream buy-out model in 2020, adding more than £1.4bn to its funds under management so far this year.

Lee Hartley, chief executive of Fairstone, said: “We are delighted to complete the final acquisition of Sovereign Wealth Management, having worked hand-in-hand with them throughout the integration phase.

“The team is a strong cultural fit for Fairstone, with high quality individuals who really care and put clients at the heart of what they do.”

Mr Hartley said Fairstone worked hard to ensure its proposition gave firms the framework they needed to “significantly grow their businesses” without compromising on client service or independence. He added that Sovereign was a “very valued addition” to the group.

Company principal at Sovereign, Marcus Harris, said: “I am pleased to have integrated the company with such a forward-thinking and client-focused firm as Fairstone.

“We look forward to continuing to deliver first-class service to our clients as part of the Fairstone family.”

Last month Fairstone told FTAdviser it had spent an additional £5.4m on acquired businesses which exceeded their initial target value over the past nine years. 

Earn-out data for the 45 companies that have been integrated into the Fairstone model since 2011 showed one in six companies joining via the downstream buyout model received more than 135 per cent of its original sale value.

On average, sellers received 111 per cent of the initially agreed price, with almost a quarter of advice businesses receiving more than 20 per cent above the original transaction value.

Mr Hartley said: “Our unique downstream buy-out model is continuing to yield impressive results and is attracting a series of high quality firms into our fold.”

He said Fairstone remained in a “superb position to deliver continued growth” in 2021 and beyond.

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