Guardian Advice has released details of its new business acquisition and succession program, designed to help the group grow its network to 200 advisers within three years.
Developed as part of Guardian’s strategy to partner with growth practices, the group says the offer provides flexible solutions for multi-adviser practices, whether they are looking to ‘go or grow’.
“Prior to 2007 Guardian had a buyer of last resort facility in place for its advisers,” Guardian Advice Executive Manager, Simon Harris, said, “Which basically meant that on commencing with Guardian, we struck a buying price to purchase their business when they retired, providing they met a couple of conditions.”
Mr Harris told riskinfo that new advisers starting post-2007 had access to a similar arrangement but instead of determining the price at the time of commencement, the practice was valued at the time of the transaction, based on an independent valuation.
Since then, the group has also developed a ‘try before you buy’ servicing arrangement for books of business purchased from retiring advisers, which Mr Harris said was brought about by the current regulatory uncertainty.
“A number of our advisers would like to grow their business by acquisition but they’re just not sure what FoFA means, so they’re not prepared to cut a cheque. And that’s not only our advisers, that’s advisers in general. There’s a whole lot of market uncertainty there.
“What we do with those businesses is offer it (the book) to them as a four-year servicing arrangement. We share the revenue with them, and we give them a call option to purchase the business at any time throughout that four year period. It really is a ‘try before you buy’ philosophy. They get to have a look at the clients, they get to work with the clients, and they get to increase the value of the business.
“My prediction will be when the FoFA uncertainty dissipates next year and we get a broader understanding of the grandfathering provisions, etc, that those businesses will probably look to purchase those books outright.”
Guardian also offers a standardised succession and purchasing execution process, and finance for advisers who are interested in acquiring or buying-in to existing businesses.
Since the inception of the business acquisition and succession planning strategy, Guardian says it has executed four transactions and is currently assessing several further opportunities.
