WT Financial’s managing director, Keith Cullen, believes the firm’s Hubco model with Merchant Wealth Partners will be a “repeatable growth model” for the business as it scales its adviser numbers.
Earlier in the year, licensee WT Financial enacted a joint venture with Merchant Wealth Partners to form a new entity called Investco which will provide strategic growth capital to advice practices. Unlike traditional private equity, Investco will take non-controlling interests and offer patient capital to the firms with whom it partners, known as “Hubco”.
In the firm’s annual report, Cullen said this will provide the licensee with a “repeatable growth model” in the future. As of the end of 2024, WT Financial had 490 advisers which made it the fourth-largest AFSL in Australia.
It has already enacted one Hubco with Titan Financial Planning, Darwin Financial & Retirement Services, and Wealth Connect Financial Services, and a second with Select Advice Group and Newleaf Tailored Financial Solutions.
“What is critical here is that these partnerships and transactions were not found by chance – they were originated, structured and executed under WTL’s mandate, using our expertise in due diligence, integration and risk management.
“This is a repeatable growth model that we believe will continue to generate value for years to come.”
Further expansion of the Investco and Hubco model is expected, and this will unlock equity value for practices while also strengthening the WT Financial network, helped by strong industry tailwinds and a scarcity of advice providers.
In its financial year results, WT Financial reported a statutory net profit after tax (NPAT) of $4.6 million, up 20.5 per cent from $3.9 million in the previous year. Over one year, shares in the firm are up by 50 per cent compared to gains of 7 per cent by the ASX 200.
Cullen also discussed the strength of the firm’s AI-driven risk management framework which allows advice documents and files to be peer-reviewed in real time and for advisers to resolve issues before any potential regulatory or consumer impact.
As well as helping prevent regulatory breaches, he said this is helping to smooth out the acquisition process.
“This is not only about risk reduction, it is about helping advisers perfect their advice, raising their standard of delivery and embedding quality assurance into every part of the advice process. It is this capability that has made each acquisition smoother, integration faster and adviser satisfaction consistently higher.”
