The advance of the wealth manager sector took another step forward this month with the successful listing of manager AFH Financial Group PLC on the Alternative Investment Market (AIM) – the largest of this year’s listings so far, with a market capitalisation of nearly £29 million, and easily dwarfing European Wealth’s £13 million accession in May.
The AIM listing, according to CEO Alan Hudson, will enhance AFH’s ability to attract quality advisers who may be considering a financial exit but who are looking for a more flexible set of options than some other buyout groups. “We are not consolidators,” he insists. “Since our listing on ISDX in 2011, we have been attracting advisers in ever increasing numbers. Two thirds of our advisers have approached us proactively; only a third of them have come through business acquisition.”
“This is not a private equity backed business indulging in financial engineering to make a quick profit. Yes, we will buy businesses, but only when they meet our cultural requirements and share our vision for the future.”
A Different Model
Described as wealth management’s ‘best kept secret’, the Bromsgrove-based group currently maintains a staff of 141 employees and 122 self-employed advisers, and provides strategic financial advice to individuals and corporate clients which it says is underpinned by its own technical and investment teams.
It is this ability to provide the right balance of scale and support to advisers and clients, says Mr Hudson, that will prove to be a key differentiator for IFAs now seeking to exit the sector, or those who want to crystallise value while also joining a business with a strong and sustainable business model.
The group says that the unusual vertical structure of the business ensures that each financial services discipline can be given equal weight – an essential part of the firm’s culture and ethos.
“It is imperative to have the financial flexibility to respond to this rapidly evolving market,” said Mr Hudson. “The ability to tap in to cost-effective capital not only allows us to acquire complementary businesses within the IFA and related financial services sectors, but it also gives us the power to raise additional capital to continue reinvesting in infrastructure and improve our client service experience.”
