True Potential has sold a majority stake of its business to private equity firm Cinven for an undisclosed sum.
In a statement, the firms said the investment will enable True Potential to continue its double-digit growth and develop its investment technology platform.
True Potential was founded in 2007 by chairman David Harrison and chief executive officer Daniel Harrison, who will stay with the business.
It is headquartered in Newcastle and employs more than 350 people and works with more than 800 restricted advisers.
Approximately 20 per cent of the financial adviser market in the UK uses True Potential’s technology and support services, the firm said.
David Harrison, chairman of True Potential, said: “We identified Cinven as the right partner for True Potential’s next phase of growth due to their financial services and TMT expertise.
"Their investment will enable us to continue to deliver on our mission to revolutionise the way wealth management is provided."
He added: “We have a shared vision and I am certain that this investment in True Potential alongside the existing management expertise will deliver continued growth for many years to come.”
Last month, True Potential's CEO confirmed it was considering offers to buy the company, but said the firm was not put up for sale.
It came after rumours were swirling that the company was in discussions with several buyers - including a company set up by the world's third-richest man and chief executive of luxury goods company LVMH, Bernard Arnault.
Until 2019 True Potential was owned by American private equity firm FTV Capital but the company bought itself back - though FTV retains a minority stake in the business.
Harrison added: “Our aim in this process was always to find the right partner with the same values that would benefit our clients, financial advisers and staff. In Cinven we have found that partner.
“The financial advice and investment markets are constantly evolving but we have grown consistently over 14 years by being bold, digital-first and client-focused.
"This investment and exciting partnership will continue that trend. I look forward to working closely with Cinven and continuing to lead the business as we provide the best possible service to our clients and advisers.”
True Potential is expected to have in excess of £20bn assets under management and to generate £135m of Ebitda for the year ending December 31, 2021.
It said this will reflect “the company’s strong growth over the past five years”.
Cinven said it identified True Potential as a compelling investment opportunity with several key attractions which included: high levels of recurring revenues, robust hybrid advice offering, a scalable technology platform, efficient onboarding processes and a high track record of growth.
Caspar Berendsen, partner at Cinven, said: “True Potential has a truly differentiated business model within the UK wealth management sector, where there are strong structural growth drivers.
"The company provides attractive services and products to financial advisers and their clients, using technology to anticipate and meet customer demands in the future as well as now."