Many investors talk about succession, but in reality, they are buying shares in a firm for the purpose of selling it on at profit in a few years’ time. Such investments rarely last longer than five years, and the outcome is usually a sale to a trade buyer. Typically, management teams are financially incentivised to achieve that sale, and little else.
We don’t think this is what many business owners in financial advice firms really want when they talk about succession. We firmly believe succession is about structuring the business in such a way that it will survive for decades, continuing to offer advice to be proud of, and need never ‘sell out’ to anyone.
We want the management team always to own a significant stake in the business they run, and if they want to sell their own shares at some point in future, they must work with us to facilitate the next generation of advisers, planners and owners to buy their way in.
We don’t wish to invest directly in the purchase of client banks, or in businesses which aren’t geared for growth. We will provide financial and operational support to a business we invest in, focusing on making our relationship work for them.
When we invest in an advice business, we are investing in its people. It’s essential to us they are honestly motivated to achieve personal and business growth. This includes:
In return for these qualities and commitments, we will provide the business we invest in with the capital, skills and resources they need to grow into a major player in their region, with no loss of identity or impetus that otherwise results from being absorbed into a national brand.