WT Financial’s new entity with Merchant Wealth Partners, Investco, has entered into a heads of agreement to merge three financial advice firms.
It was announced last week that WT Financial had entered into a 50/50 joint venture with Merchant to form a new entity called Investco. This would look to provide strategic growth capital to “high-potential financial advice practices across Australia”, broadly in line with Merchant Wealth’s global model.
Unlike traditional private equity, Investco will take non-controlling interests and offer “patient capital” to the firms with whom it partners, known as “Hubco”.
Just a few days later, the firm has announced it will bring together Titan Financial Planning, Darwin Financial & Retirement Services, and Wealth Connect Financial Services to form one larger entity, its first Hubco.
Titan has offices in Sydney and NSW Central Coast, Darwin is a boutique practice based in Darwin, Northern Territory, while Wealth Connect is based in Northern NSW.
This new entity will be led by Titan principal David McLean as chief executive, who set up Titan in 2008, and Darwin FS and Wealth Connect advisers Andrew Moo and Jeff Stella will remain as active advisers. Over time, the individuals will support further acquisitions, mentor new advisers, and drive operational growth.
Each founding practice will sell its shares or assets in Hubco for a combination of cash and newly issued shares in Hubco, while WT will hold 6 per cent of Hubco shares to reflect its advisory and due diligence contribution.
Investco is expected to provide $3.5 million of capital and hold an initial 36 per cent stake in Hubco which will align long-term growth objectives with local autonomy for each practice.
Investco will appoint the chair of the board, and the WT and Merchant teams will support its endeavours, it said.
Future steps once Hubco is in place will be operational integration, organic growth initiatives, future targeted acquisitions of complementary services, and due diligence and strategic support from WT Financial.
Keith Cullen, founder of WT Financial, said: “We are delighted to announce our intention to form the first Hubco and to be partnering with three established advice practices. The capital and strategic resources provided by Investco will help drive expansion while preserving each practice’s entrepreneurial flair. We look forward to David, Andrew and Jeff – and their teams delivering outstanding outcomes for their clients and the wider Hubco group.”
McLean said: “Titan, Darwin FS and Wealth Connect share a commitment to professional advice and community-minded service. Through Hubco, we will create more efficient infrastructure, deliver stronger adviser and client support, and explore further acquisitions. I’m proud to lead such a dynamic group and look forward to working closely with Andrew, Jeff and our broader team as we grow together.”
