Associated Planners buys into practices

AssociatedPlanners Financial Services(APFS) is set to take 30 per cent strategic stakes in as many as 50 of its 100 affiliated adviser practices over the next 18 months.

“We’ve started taking strategic stakes in our member firms by buying a third of them, and have taken a 30 per cent stake in three at the moment with another three on the go. We’d like to get 20 on board by the end of this financial year — that’s the goal,” says APFS managing director Ray Miles.

“It’s kind of a mutual selection process, where those that are interested will be involved, as long as they meet certain criteria for us.”

The criteria from APFS’ perspective that Miles refers to is a long-term view, which will involve listing some of the practices at some stage in the future.

“From the adviser firms’ point of view, it allows them to free up some capital, so they can grow their businesses,” Miles says.

“The businesses that we’re buying into really need to be businesses that are growing, that’s what we’re after — solid businesses that are growing. They can use the money to go out and buy more practices, which is what we’re really shooting for.”

Miles says the group has been working on the initiative for 18 months.

“If they want to get into succession planning then it also allows us to get involved, as if we have a 30 per cent stake then we may be able to fund the balance,” Miles says.

The APFS affiliated practice firms also collectively hold a 63 per cent stake in the dealer group, withZurich(30 per cent) and APFS staff (7 per cent) accounting for the remaining balance.

“You have to remember that they have a stake in us, so what we’re doing is allowing them to expand through a friendly acquirer.”