IpacSecurities has signed another financial planning practice — Melbourne-based Littley Financial Services — to its unique equity partnering program, bringing the number of practices that have joined the financial advisory firm in search of a succession planning solution to more than 20.
And the program is continuing to be a success, with two more practices on the verge of completing a similar deal in the coming weeks.
The initiative is producing results on two fronts for the financial planning dealer group, allowing it to grow by external acquisition and resolve succession planning worries for small to medium-sized planning practices.
Greg Quinn, ipac Securities regional manager, partnering acquisitions, said: “We’ve got ambitious growth targets. You can grow only so fast organically, and if you want to grow fast you look at doing your own acquisitions to speed up that process.
“At the same time, if you look at any of the industry statistics, there are a lot of advisers who are getting on in years who have got great businesses with clients that need looking after.
“So if we can grow our business while at the same time helping them exit their business, and make sure the clients are looked after, it’s a pretty good outcome for us all,” he said.
In regard to the succession planning solution, the dealer group employs a two-pronged approach.
“We do what’s called a book buy, which is generally an older guy who just wants to sell and go now, or we do equity partnering with generally larger businesses, $100 million-plus, whose principals want to go, but they don’t necessarily want to go now.”
The equity partnering deals allow ipac to assist planning principals in growing their practice over a period of up to 10 years before eventually taking the practice over.
Alan Littley, the director of Littley Financial Services (LFS)— the latest planning practice to sign up with ipac — said the agreement had given him a solid strategy in regard to his own succession, alleviating concerns the organisation would be too large for a rival practice to buy and too small to attract the interest of a large dealer group when the time came for him to move on.
Furthermore, he feels the arrangement will allow the practice to increase substantially over the next 10 years.
“We now have a strategic partner that can provide the back-office support to help us grow the business, because that’s what they’re good at, while I’m good at getting clients. So we can now draw upon services such as their IT function and their human resources capabilities,” Littley explained.
