Building for the future: a Q&A with Succession Wealth’s Daniel Jones

by | Feb 20, 2024

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Daniel Jones, Head of Mergers and Acquisitions at Succession Wealth, has been discussing with Brandon Russell how his team views the 2024 M&A market for advice businesses. In this exclusive Q&A, they also delve into the company’s plans to expand further as 2024 gets underway, and the ways in which dealing with Succession can help alleviate some of challenges which IFAs face when looking to sell their business.

Succession Wealth are a national firm comprising of over 215 Independent Financial Planners that, since 2014, has grown through the acquisition of more than 60 advisory firms. Daniel Jones, appointed in September 2023 to head up Succession’s mergers and acquisitions (M&A) team, hopes to continue this upward trajectory by capitalising both on opportunities in the market and on the advantages that being backed by Aviva bring to the group.

As IFA Magazine readers will probably know, Succession Wealth was acquired by Aviva in August 2022. This has allowed the ever-growing firm greater coverage in the M&A market for advice businesses. Jones is in bullish mood, believing that 2024 will be a strong year for the group’s development as it eyes bigger companies as part of a refocussed acquisition strategy.

 
 

In this exclusive interview with IFA Magazine, Jones not only reveals his team’s plans for the coming 12 months, but also highlights the benefits that they’re seeing from working closely with Aviva. He also sheds some useful light on what sellers can expect when dealing with Succession and why it’s so important for advice business owners to make the right decision when deciding to sell their business.

IFA Magazine: What does the M&A market look like today compared to what it looked like 18 months ago?

Daniel Jones: “If we look at the M&A market as a whole across the last 18 months, it’s been relatively slow compared to previous years. In the previous period we’ve also seen a lot of new consolidators coming in and some consolidators being bought by UK and oversees private equity, many of whom have no track record in the financial advice sector. Given our stability and strength of ownership I’m confident that 2024 is going to be a strong year for us at Succession, but there is a great deal of uncertainty around elsewhere for the consolidator market as a whole.

 
 

“One thing that we’ve noticed more recently is that several private equity (PE) consolidators are taking a little bit of a step back from acquiring and instead are focusing on sorting out their own businesses as well as seeking to find a route to sell on what they have acquired to date.

“One of the strengths for us is that we’ve found our feet with Aviva, allowing us to really take a good look at the opportunities out there over the next 12 months. That’s why I’m so optimistic that we’ve got a very progressive 2024 ahead of us. We’re in the strong position of being able to offer good value to sellers and for them to become part of one of the UK’s largest and best backed independent financial advice businesses, where client focussed advice is core to the overall long-term strategy of the business.”

IFA Magazine: What are the strengths of Succession Wealth with Aviva’s backing and what is your capacity to expand?

 
 

Daniel Jones: “One of the reasons I joined Succession was because it has that Aviva backing, as opposed to it being a private equity house. One of our major advantages is that we have that long-term solidity of a blue-chip company, which puts us in a good position to go to market and have very positive conversations with sellers. We can reassure them with confidence of our solid foundations which are set fair well into the future.

“Given that situation, I’d argue that we are ideally placed to offer long term stability and strength, and also the opportunity to further develop, for advisers looking to sell their businesses. This is obviously a hugely important step for them, and they need to know, with confidence, where their clients are going to be in ten years’ time.

“Obviously, there’s also a strong monetary aspect that comes with being backed by Aviva. It means that we’re well financed and so we have considerable scope to go out and make the right acquisitions. This, in itself, has enhanced our strategy for which businesses we’re looking to buy. If we consider over the last 5-10 years which firms Succession has typically been acquiring, it’s tended to be mid-sized, with some smaller and some larger, firms. This has got us to where we are today and has stood us in excellent stead. However, we are now working with greater numbers of larger firms and, potentially, even some of the consolidators that will come on to the market.

“We are often approached to look at the consolidators, but it is clear that those consolidators who have been active without due regard to what it takes to be a client and people focussed ongoing business are going to struggle to prove themselves attractive. We will continue to be open-minded though as I think we’re entering a phase of consolidators buying the consolidators. There are a number of consolidators that are PE backed where their exit strategies appear to be unclear. This presents challenges to them and to their clients and staff.

“When it comes to our current position, we are in ‘exclusivity’ with some high-quality businesses at the moment. We’ve also several others at ‘offer’ stage, with those offers being based on our ongoing focus of only working with the best of the firms we are asked to review. I’m pleased to say that our appetite to expand beyond that is high, especially with Aviva backing. We have a very strong 2024 ahead of us.

“We’ve just announced an acquisition in early January, which I think highlights that last year, supported by Aviva, we were continuing to grow our ambition. I think we have found the right equilibrium where we can really go out into the market and buy good quality firms. We have, of course, said ‘no’ to a lot of prospects and we will continue to only take those opportunities that fit in with our plan and who we are. Our target is definitely orientated towards medium – larger firms whilst ensuring that those are firms that really fit our ethos and our growth strategy too.”

IFA Magazine: What challenges may IFAs face when looking at a sale and how can Succession help to alleviate these issues?

Daniel Jones: “One important thing that I have noticed over the years is that if an adviser is looking at selling to, for example, a consolidator that is PE backed, they will want to have that knowledge of where their clients – and business – are going to be in 3-5 years’ time. I mentioned previously that there are likely to be a few consolidators that come onto the market themselves.

“I think one of the questions that sellers need to ask a potential acquirer is, what are their plans for the advice business going forward? If we consider an example where an adviser sells to an acquirer today but then that acquirer goes on to subsequently sell it to another business that may be a poor fit, this can cause real problems. That adviser still has to think about what’s best for their clients at the end of the day. It’s a relationship business and one where people really do matter.

“Alongside that, there are other things that I’d suggest sellers need to look at. Firstly, the valuation that’s being offered. What do you have to do to get that valuation? What do you need to change within the business? Do you in effect need to become ‘restricted’ (even though the acquirer says that they are ‘independent’) to really meet an expectation of selling the acquirer’s own solutions? Do you need to be involved with it for a certain amount of time? At a minimum we like to have the sellers involved for a handover period to have that continuity with clients as the business takes on the new shape under new ownership however, sellers are welcome to stay advising as long as they desire.

“For the adviser who is selling, it is a lasting piece of advice to clients to say, ‘I’ve done my due diligence on this buyer, this is what’s going to happen going forward and I think you’ll be in safe hands’. Can you really say that if the PE backed consolidator is going to be there for just three years and you don’t know what’s going to happen thereafter? Again, it’s looking at the bigger picture and taking stock. Of course, it’s nice to have a big number in front of you, but how much is your business going to change? How much does your client experience change? What does postsale life look like?” These are all crucial questions that advisers need to reflect on. It’s such an important decision and vital that advisers make the right choice. It’s one we’re ideally placed to help with and really looking forward to more interesting conversations as we go through 2024.”

In conclusion

From this conversation, it seems clear that significant movement in the M&A market can clearly be expected once again from Jones’ team at Succession Wealth, although an evolution to focus attention more to the acquisition of medium-larger firms will make for an interesting year ahead.

Despite just being in the role for less than 12 months, Jones has made plans to take Succession Wealth another step forward through acquisition. The combination of significant financial backing from Aviva, plus the reassurance of good client outcomes and the expertise gained from many years of acquiring quality firms means that these plans seem to offer a very successful prospect indeed.

About Daniel Jones

Daniel is Succession’s new Head of M&A. He has been involved in all aspects of Wealth Management M&A for almost 9 years; starting at a small sell-side brokerage, Daniel then moved on to run his own brokerage for over four years before joining PwC’s FSLA team, where he led the team’s AWM offering advising clients on both the buy and sell side.

But there’s more…

Daniel Jones is set to delve further into his views on the M&A market during a Webinar on February 27 2024 at 10:00am. As a follow-up to our previously very successful and popular webinar entitled ‘Mergers & Acquisitions (M&A): the IFA’s journey to selling, purchasing, or retiring from a business’ February’s webinar is sure to provide greater insight into the latest developments at Succession Wealth and in the wider M&A market too. Be sure to book your place here

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