Dealer groups looking for a quiet exit
Recent industry upheaval has resulted in plenty of small and medium sized dealer groups looking for a quiet exit through a sale to an institution, according to Equity Trustees head of wealth management Philip Galagher.
EQT has been approached more than once a week by groups who are looking for an institutional owner, he said.
“A lot of them can see that there are advantages in the vertical integration that an institutionally-owned dealer group can put in place,” he said.
They may not necessarily want to get involved with a bank but are looking for an institution such as EQT that does have some involvement in the advisory side and has some other interests that could be beneficial in terms of cross selling and so on, he said.
EQT has been open about the fact that if the right deal comes along they would be interested, and that would most likely be a group that fits in with EQT’s focus on the high net worth client space, Galagher said.
The group would also be likely to look only at “squeaky clean” groups that had already been operating a fee for service model for some time.
EQT was targeting growth in the next three to five years, both through establishing its own brand and through an agency structure but most of that growth would likely come through acquisitions, he said.
According to Galagher, the synergies from a trustee company’s point of view are not just from the advisory side, but the fact that frequently HNW clients will want estate planning and to review their wills, which is an area EQT already focuses on.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025 with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
