Fairstone adds two new firms to its DBO programme

Fairstone has announced that it has brought two new firms to its Downstream Buy Out (DBO) programme.

The deals secure more than 720 clients, 16 advisers and support staff into the wider business as well as gross fee income of over £1.5 million and Funds Under Management of £200m, marking another significant step forward in Fairstone’s growth plan for 2020.

Fairstone’s unique DBO acquisition model operates by integrating an IFA firm, typically over a two-year period, before finally acquiring the business.

These deals with Brantwood and Advanced mark the start of this phased pre-acquisition process, enabling the firms to fully align in terms of culture and systems as well as empowering the business owners to optimise their capital realisation and control their sale valuation. The firms will also be able to take advantage of the regulatory, technical and operational support that Fairstone provides.

Brantwood Financial Planning, based in Huddersfield, specialise in tax planning, IHT and retirement planning, with two advisers, two support staff and 140 clients. The firm bring a total fee income of £650,000 and close to £140m FUM.

Based in Durham, Advanced Financial Services specialise in pensions and investments, with four advisers, eight support staff and 583 clients. The firm, which has two offices, bring a total fee income of £900,000 and more than £60m FUM.

Fairstone CEO Lee Hartley said: “It is wonderful to bring another two quality businesses into our Downstream Buy Out programme. Both Brantwood and Advanced share Fairstone’s client-centric ethos and their focus on quality and first-class service is exactly what we are looking for in a business.

“The structure of our DBO programme ensures we partner with firms with an appetite to grow and develop and we look forward to working with both companies to help them build their businesses further.”

Fairstone is a full-service wealth management house delivering integration-led growth and its unique DBO approach ensures a seamless transition for clients and staff.

Significantly, the majority of firms at the point of ultimate acquisition have enjoyed increased organic growth which has resulted in a higher sale valuation than initially expected. Figures released at Fairstone’s Annual Conference in Newcastle earlier this year showed 15% outperformance across its entire portfolio of acquired businesses, with these firms delivering more revenue, profits and growth than either their own forecasts, or those upon which the buy-out agreements are based.

Paul Dickinson principal at Brantwood said: “Like us, Fairstone hold corporate Chartered status and we were attracted to their genuine independence and the fact that we would not be shoe-horned into centralised investment strategies or higher charging structures for clients.

“Fairstone’s on-going compliance and regulatory support will allow us to spend more time on assisting our clients with their financial planning needs. We are delighted to have joined Fairstone and look forward to a mutually rewarding relationship, as an increasing number of people appreciate the benefits of long-term, genuinely independent, financial planning.”

Martin Bage, principal at Advanced added: “As a small firm of advisers, we were looking for the support and strength from a national firm for our clients, whilst still retaining the personal relationship we have with them.  This gives our clients and ourselves the security we need in this ever-challenging world.

“We felt that being part of the Fairstone group allowed us the opportunity to take our business forward knowing that their help, support and services are there both for us and our clients.”

Fairstone’s DBO programme continues to be a core driver of growth for the business, reversing the traditional buy and build approach, with integration playing a key role in a firm joining the programme.

Fairstone CEO Lee Hartley added: “We are always looking for strong, high quality businesses with ambitious growth plans to join Fairstone and whilst we recognise that we are all moving into a different climate with challenges ahead, we are in a strong position and we will continue to onboard new DBO firms at our forecasted volume.”