The ‘mind-blowing’ client pipeline in country advice firms

Acquisitions M&A financial advice queensland

13 March 2024
| By Laura Dew |
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Rather than looking at high-net-worth CBD advice firms, one practice is looking to expand via acquiring regional firms with strong client pipelines. 

Brisbane-based Wealth Architects is in the process of acquiring two regional practices in Victoria; one in Swan Hill and one in Echuca, which are expected to be completed within the next four weeks.

This will see around 1,200 clients move over to Wealth Architects. 

Speaking with Money Management, managing director Callum Mitchener, said its previous acquisitions have been in CBDs, but the country firms offer an alternative for growth. It had been considering one in Townsville, but opted for the country firms instead. 

“Country people are looking for help. These firms have a massive pipeline of new clients. They have people knocking down their door; there’s a year’s worth of work out there for them. It really blew our minds. 

“These people have farms, and they want their kids educated on finances and dealing with the money in anticipation of taking over the business. In other cases, they want to sell the farm and want advice on that, or they have already sold, in some cases for millions of dollars, and they don’t know what to do with that cash.”

However, he acknowledged acquiring country practices brings its own challenges in terms of culture. Money Management previously covered how regional firms are likely to be more compliant than larger CBD counterparts as they are under the scrutiny of their community more than those in the CBDs.

“In most of our other acquisitions, the person has been retiring or we are buying the whole business, whereas this time, it is a case of two cultures coming together under our brand. So there is a cultural change, and if we do something wrong in a small community, then everyone knows about it. We need to run it properly,” Mitchener said.

The acquisitions form part of Wealth Architect’s national growth strategy, and it has already completed 10 acquisitions over the past decade. While he says valuations haven’t changed much in that time, competition for practices is becoming fiercer.

“Our cheapest was $2.2 million and the most expensive was $3.5 million. The valuations haven’t varied much, but what has changed is it has got harder to buy, so you need to move fast because of the competition. There are fewer books available to purchase now, and everyone is really busy.

“We would like to be a medium-sized national advice brand and have a target of 2530 firms across Australia. It won’t necessarily be country or city ones. It’s about whatever opportunity pops up.”

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