Prime Financial eyes acquisitions as it seeks revenue growth

Prime Financial is targeting ambitious growth by 2025 thanks to a five-year business organisation process which is now reaping rewards for the business.

The firm is currently divided into four divisions; corporate advisory, accountancy, wealth management and self-managed superannuation funds (SMSFs).

Although it had been founded back in 1998, Prime had been on a process of transformation over the last five years and progress had been seen over the last three years. This had included a focus on wholesale clients rather than retail ones and making acquisitions.

Speaking to Money Management, co-founder of Prime Financial Simon Madder, said: “We saw this as an opportunity to differentiate ourselves, we designed who we would want as our ideal client so we weren’t the traditional wealth manager. Wholesale clients tend to have larger balances and more complex financial situations and we sought out fund managers who we could partner with.”

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This had led the firm to set its revenue target to grow from $26 million in FY22 to $50 million in FY25.

Madder said: “We are comfortable we will achieve this and are now looking beyond that. It has taken us time to get the culture right so we are keen to accelerate that revenue generation. People talk about ‘stay in your lane’ but we don’t want to do that and want to do more with our clients!”

The cultural change Madder referenced referred to the firm’s policy of equity ownership with 45 per cent of the business owned by staff. From November, this was set to increase to 48 per cent as more staff reached the equity level.

“That is a strong component of our business, after 12 months every member of staff can earn equity so ownership is a really important part from the ground-up. It isn’t just for senior executives. 

“We think it leads to staff having a greater connection to the business and helps them to want to progress and develop their careers at the company, the idea of profit with purpose and team engagement.

“For listed companies, I would be surprised if firms offer equity stakes at all levels of the company and for unlisted ones, they tend to concentrate it among the top four people.”

In order to achieve these ambitious revenue targets, the firm is exploring acquisitions having acquired B2B SMSF administration provider Intello Pty last October.

Approximately 10 per cent ($2.8 million) of Prime’s FY22 revenue was generated through the SMSF service line and the acquisitions would enhance this by adding an expected additional $3 million of annualised revenue which would take the SMSF service line revenue to approximately 20 per cent of group revenue.

Madder said the firm is presently exploring 4-6 acquisition opportunities and would narrow this down to 1-2 each year. The firm is seeking to expand its SMSF and corporate advisory arms but Madder said acquisitions could be made in any of its four divisions.

“We want to keep scaling up and acquisitions will feature more prominently. We will only consider those businesses which can add more value to the business and fit in with our model.”