Listed financial services consolidatorInvestor Group(IG) is one step closer to boasting a nationwide financial planning operation, with the purchase of Adelaide financial planning group Prescott Consulting (Prescott), which is now taking priority as its premier financial planning brand.
IG, which started out as a small listed professional engineering and survey firm, purchased Prescott, formerly known as the financial planning arm of Adelaide-based Ord Minnett, when the Adelaide group divested from its stock broking arm in September 2001.
Since then, IG has pushed ahead with the Prescott business, increasing its stable of financial services groups to six. Many of these firms will soon be rebranded under the Prescott banner.
The most recent acquisitions have been parts of troubled financial services group Stockford. The groups pinpointed by IG include Stockford Hobart, an accounting and financial planning business in Tasmania, and Stockford Bathurst, an accounting business located in New South Wales.
The purchase of the Stockford businesses came less than a month after the directors of Stockford agreed to appoint voluntary administrators to the business on February 23, 2003.
On March 19, 2003, IG announced another Stockford business acquisition with the purchase of the Stockford Richmond business in Victoria.
However, it was the purchase of South Australian firms, Acumulus and Sanderson Blair in July 2002, which have been merged with Prescott, that helped put the group on the map as the largest full service advisory firm in South Australia.
Commenting on staff and planner losses resulting from the divesting of the Ord Minnett group and the merging of Sanderson and Acumulus to Prescott, IG managing director Kevin White says there were a number of staff redundancies.
However, he says a large portion of staff have stayed on under Prescott, including formerMoney ManagementFinancialPlanner of the Year winner and Acumulus founder John Wotherspoon and his business partner Rosmary Osman.
White says it was the success of Prescott in South Australia that led to IG putting the brand forward nationally.
“When we bought Prescott it was Ord Minnett in South Australia. It was a combination of financial planning and traditional stockbroking. But under the deal with Ord Minnett, the stockbroking was sold to Macquarie,” he says.
“Once the stockbroking side was removed, it was left with a financial planning group. We purchased the group for a couple of reasons. We’ve got all these accounting firms with financial planning and we wanted a way to help us change the profile of these firms. We also saw an opportunity to build the Prescott brand nationally.”
At present, there are 20 member firms under the IG banner, 17 of them accounting operations and three financial planning groups. IG also has 1,400 staff members and a client base of more than 130,000 people. The group estimates that it has over 100 advisers working across the dealer group.
While these numbers may sound impressive, White does not want numbers to plateau. He says IG has set the annual funds under management target at no less than $10 million. Currently, the total revenue for the dealer group is about $150 million, with each firm returning $7.5 million on average. White believes that with the national approach Prescott is taking, this target is achievable.
In relation to fostering Prescott nationwide, White says IG is already in the process of establishing operations in Sydney and building the brand as stand-alone businesses in financial planning.
Prescott Consultants (Melbourne), formerly the Spectrum Group, was established in 1985 and has developed into a leading specialist in self-managed super and pension funds. It is a licensed securities dealer and principal life broker. The Spectrum Group recently changed its name as a step towards national representation.
While Prescott has infiltrated the Melbourne market, an IG acquisition in August 2002, Williams Hatchman & Kean (WHK), is in the process of being renamed Prescott Sydney. White says the group was to be renamed Prescott shortly after its purchase, however, it has been shelved for the past year.
“WHK just wasn’t the focus. It had its own licence and traded under that licence. Prescott SA is now in the process of converting the licence.”
As for the future, White is tight lipped about further business acquisitions. However, he did add they are always looking out for businesses that are a good fit for the group.
Vital Statistics – Prescott Consulting
Founded:Investor Group 1997
Number of advisers:104
Funds under advice:Prescott Consulting $1.9 billion (estimate), with $4.2 billion total in group
Ownership:Publicly listed companies, principals of the member firms, and public shareholders
Location:Head office Melbourne (Investor Group), Adelaide (Prescott Consulting), with member offices located across Australia
Key Figures:Chairman, Terry Power; managing director, Kevin White; and Neil Schafer
Research:In-house
Master trust/wrap service:BT Wrap
