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What does Evelyn Partners’ succession programme entail?
The initiative entails engaging with the founders of small local/regional financial adviser practices who are considering retiring over the next few years. We seek to offer them a secure pathway to retirement, a good home for their clients and a breadth of services that clients may choose to discuss with us in the future.
The programme involves a continuity of service and proposition, with Evelyn Partners seeking to replicate the services provided by the retiring financial adviser. The idea is to provide minimal disruption for clients as they transition across to a new adviser.
The retiring financial adviser is offered a total consideration (at typically premium levels to the market), paid over a two-year period. This includes an element of upfront consideration plus deferred payments linked to the number of clients that choose to move across to Evelyn Partners. We would also bring the retiring financial adviser over to work for us in an ambassadorial capacity for one to two years, supporting the client transition into Evelyn Partners until they are able to fully retire.
Why was the programme created?
There are over 27,000 financial advisers operating in the UK marketplace and more than 5,000 mostly small firms. Research indicates that the average age of an adviser is c.58, so there is a clear recognition that many small businesses will be needing to consider a succession planning solution in the short to medium term.
From our perspective, there is a strong desire to continue to grow our existing financial planning business, which currently has > 260 financial planners operating nationally. The adviser succession programme serves as a mechanism for accelerating the growth of this business and helping to ensure we remain a market leading business operating across all regions of the UK.
Whilst the market is clearly highly fragmented, there are already an abundance of larger financial adviser purchasers seeking to consolidate through acquisition. We wanted to offer something different to the marketplace, and we believe we are uniquely positioned to do so as the leading financial-planning led wealth manager firm. We are also highly experienced in executing M&A transactions, with many integration success stories.
What are the pros and cons of these types of mergers?
Both parties gain benefits; we get access to some great clients supported by an excellent team. In the case of Scholes and Brown, Philip and Bradley (Scholes and Brown’s directors) get the support of a much larger organisation with a huge breadth and depth of client propositions and expertise.
What inspired the merging of teams with Scholes and Brown in particular?
Scholes and Brown has a fantastic business that has been built-up over the years, with highly experienced local advisers and support staff. We saw this business as a great fit for our existing Newcastle operations as we seek to grow our footprint in the region.
The business was already well known to us, operating in adjacent premises to our Newcastle team. As such, we were delighted when the opportunity arose to talk to Philip and Bradley about a possible transaction, safe in the knowledge that this would be a great fit, both culturally and strategically for Evelyn Partners.
What was the negotiation process with Scholes and Brown like?
Philip and Bradley were great to deal with and were prompt and comprehensive with responses to our information requests. This made our due diligence process much easier and confirmed our assumption that we were engaging with a high quality outfit.
As a purchaser, we pride ourselves on a ‘no-surprises’ approach, standing behind the initial terms offered to counter-parties as much as possible. All deal discussions do tend to involve some twists and turns, but we felt we were able to offer both Philip and Bradley a compelling set of terms, comfort to their staff and provide clarity over the client journey and onboarding process at our end.
What has the integration process been like so far? Have there been any hiccups along the way?
It has only been a few weeks since the deal was completed, which was during the holiday season. All staff have been welcomed into our new offices in Newcastle and during the initial transition they are working partly from the Scholes and Brown office and partly from the Evelyn Partners’ office, and we expect to fully integrate both teams in the coming weeks.
The staff of both firms have commented on how well the transition has gone and they are really looking forward to working as one team, especially now they all know each other a little better following a night out on the ‘Toon’ to celebrate the completion of the deal.
What roles will they have in the firm? What will their daily responsibilities include?
Philip and Bradley are excellent financial planners and will help us expand our presence in the North East marketplace. The Scholes and Brown team will continue to look after their clients and help oil the wheels of migrating these clients from one business to another.
What is next for Evelyn Partners’ Newcastle office?
We have been in Newcastle for many years, but it is going through an exciting pace of growth and development. We have recently supplemented our financial planning team in Newcastle with locally based investment managers and at the end of last year, our office in Newcastle was boosted by the team from a firm called Explore Wealth Management joining.
Our new, larger office in the city is a sign of our growth and ambition in the North East. We will continue to provide a first class client experience and look to expand our presence organically, including working with firms of accountants and other professionals. We will also continue to explore acquisition opportunities, where the fit is right.
