Fairstone acquired Glasgow-based Professional Partners in 2017. Here, business principal Fraser Thomson talks about the acquisition process and life before and after the sale.
“Being part of a bigger company allows us to feel more relaxed about the advice we are giving, especially in bigger cases as it feels the advice has been ratified,” says Fraser Thomson.
Professional Partners, which offered a full range of tailored personal and corporate financial advice, launched in 1990.
Fraser explained that the firm first joined Fairstone’s unique Downstream Buy Out (DBO) process in summer of 2016 and was fully acquired by Fairstone 18 months later.
Clients would be well looked after
He added: “We decided to join Fairstone for two reasons. Firstly, it provided me with a clear way to ultimately retire knowing that our clients would be well looked after – I am 60 and I needed to think of a route out.
“Secondly we wanted to share the liability and responsibilities of running a financial service business in the new world we live in with a national firm that could help and guide us to keep things right.”
Fairstone’s unique DBO acquisition model operates by integrating an IFA firm, typically over a two-year period, before finally acquiring the business, enabling both 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.
Fraser added that the DBO proposition was one of the deciding factors for the firm joining Fairstone.
“We really thought the DBO model was a very good idea – I liked that way that you started working together initially before the final acquisition,” said Fraser.
“Under the DBO programme, Fairstone gave us complete autonomy on how we continued to run the business, which was a very good factor, and meant we weren’t forced or coerced into using any particular funds or platforms.
“It was really a case of business as usual with Fairstone which I thought was a very attractive part of the proposition.”
Smooth transition of clients
Integrating with Fairstone during the DBO programme also allowed for the smooth transition of clients and advisers.
“We wanted to join a progressive, national company which will help us to strengthen our business whilst allowing us to remain independent and further improve the levels of service to our clients,” said Fraser.
“Mainly the structure of the DBO and the fact we could run the business without any interference has ensured the smooth transition for clients, advisers and staff.”
Countrywide, Fairstone is seeing an 11% out performance across its entire portfolio of acquired businesses, which means the firms it is acquiring are delivering more revenue, profits and growth than either their forecasts or buy out agreements are based on.
Part of a national IFA firm
Fraser added: “Financially the integration journey has been excellent and I would say that the biggest positive post acquisition is being part of a national IFA firm. This has given us a lot of advantages and has generally reduced our responsibilities and stress levels, while the regulatory support has meant our exposure to risk is controlled and greatly reduced.
“On larger cases it has been beneficial to have Fairstone’s compliance input – we have taken on some cases that we would have been nervous about doing if we had not been a part of Fairstone. It has definitely made us feel in a stronger position.
“The business has grown and while a lot of that growth has been organic, the compliance input from Fairstone has given us extra confidence to build.
“Overall it has been a very good move to join Fairstone. There have been challenges along the way, but we are happy we joined Fairstone and I have also recommended people to join the firm.”