M&G to launch IFA buyout scheme

M&G to launch IFA buyout scheme
David Montgomery, managing director at M&G Wealth

M&G Wealth is gearing up to launch an IFA buyout scheme for firms nearing retirement in an effort to attract more advisers to its network model.

The new scheme is just one way M&G Wealth intends to hit a target of 1,000 advisers by 2025, although managing director David Montgomery said it is on track to accelerate this target.

The firm told FTAdviser that the scheme will go live in the “near future”, with no exact date set.

Currently, the wealth arm - formed in 2020 - operates three networks totalling 500 advisers. This includes 250 restricted, self-employed advisers within The Advice Partnership, as well as the 180 IFAs within Sandringham Financial Partners - which M&G Wealth acquired in January 2022 - and the 60 IFAs at Continuum, M&G’s latest advice acquisition.

The business also includes M&G Wealth Platform, the former Ascentric business it acquired from Royal London which now holds around £18.5bn in assets, and M&G Investments, which includes the firm’s flagship Pru Fund range which have totalled gross inflows of £2.5bn in the first half of this year - up 32 per cent over the year.

“M&G plc is very well known as an asset management and insurance business, but we’re [M&G Wealth] actually a wealth business and we’ve been a wealth business for a period of time,” said Montgomery.

“What we’ve been building over the last two years is an extension of that…The world’s changed, people consume things in different ways and we want to operate a wealth business in all the channels out there in the market.”

In order to reach its 1,000 adviser footprint, the wealth business intends to launch a practice buyout model. It has not had one up until this point.

The idea is to bring more client books and assets onto its balance sheet to create more business for new hire advisers.

“Through Sandringham and through Continuum, we feel like we've got a lot of the capabilities now in terms of networking to bring advisers in. I'd love for advisers to join our networks,” said Montgomery.

“That can be done through recruitment or it can be done through the practice buyout model where we purchase their business to pass on to another adviser that's in our network."

He added: "The larger scale acquisitions I don't think we necessarily need to do. But if the right opportunity came along, then of course we’d look at it.”

Montgomery said the firm was about to launch its practice buyout model within its existing advice businesses.

In September 2021, M&G Wealth launched The Wealth Advice Academy with an initial intake of 14 advisers, including a butcher, pilot and a student. The target is to get 25 new trainees every quarter to enrol.