For over two decades, AFH Wealth Management has been steadily acquiring IFA firms, building a business that prioritises long-term stability, strong cultural fit, and exceptional client service. In this exclusive interview, Alan Hudson, CEO and founder of AFH, talks to IFA Magazine’s Sue Whitbread about his approach to acquisitions, the challenges and opportunities within wealth management consolidation, and his vision for the future of the sector.
Building a sustainable business
Having acquired 125 firms over the past 20 years, AFH Wealth Management stands apart from many consolidators in the financial planning and wealth management professions. It’s a mature and well-established business that’s been delivering holistic advice for 35 years.
“In my experience, many acquirers acting in the financial planning space are run by people who are incentivised to buy as many businesses as possible in a short period,” says Hudson, who is pictured on the front cover of this month’s IFA Magazine, along with his AFH colleagues David James, Commercial Acquisitions Director and Claire Spillane, Acquisitions Director.
“To me, that’s not a mature business model. The CEO can leave, a CFO is brought in to ‘tidy up,’ and integration is neglected leaving the business – and its clients – with a less than perfect transition.”
By contrast, AFH Wealth Management, founded by Alan, a Chartered Financial Planner himself, back in 1990, has taken a measured approach to the development of the financial planning and investment management business ever since. As he puts it, AFH is simply a “nice business” – an authentic wealth management firm that understands the business of advice and happens to do some acquisition work. “We tidy up as we go,” he explains. “We only deal with good people, and we go above and beyond to do right by them – and their clients. If someone has worked hard to build their advice business for 20 or 30 years and ultimately sells it to us, I feel that we have a duty of care to that business owner, the staff involved and their clients to ensure it is handled properly. It’s not just about personal gain; it’s about building a sustainable, well-run business that can thrive in the years ahead, with all stakeholders’ needs and best interests kept firmly in mind.”
A strategic shift from public to private
Hudson’s journey began with AFH as a private company before listing on the PLUS market in 2011 to fund smaller acquisitions. In 2014, AFH moved to AIM, raising successive funds for expansion. Despite hitting performance targets, the company found itself in a “value trap.”
“Our share price didn’t reflect our growth, limiting our ability to raise capital without disadvantaging investors,” Hudson explains. “In 2020, we took AFH private with support from Flexpoint Ford, a U.S. private equity firm.” Today, AFH is a thriving business which manages around £9 billion in assets and generates over £100 million in turnover.
A thoughtful approach
AFH’s first acquisition back in 2004 was prompted by a local accountant seeking help for a widow of an IFA concerned about the future of the business after the death of her husband. “It went well,” said Hudson. “His widow even came and worked with us herself for a few years. We quickly realised that acquisitions were a better way to grow than traditional marketing. It also attracted strong advisers by providing them with an existing client base.”
This strategy remains at the heart of AFH’s approach, which is based on experience, trust and exceptional client care. Their specialist acquisitions team are key to the success of this. Not only are they experienced individuals, but they’re focused on delivering good outcomes, great client care and the highest level of service throughout the process. “We’re careful who we acquire, and with the people involved, we ask, ‘Would we recruit them?’ We won’t let profitability cloud our judgment if someone isn’t a strong cultural fit with our values and our business philosophy,” Hudson explained.
Hudson likens the actual acquisition process to that of financial planning saying: “We conduct a full ‘fact-find’ right at the start to understand the seller’s motivations, needs, and objectives. Then, if it’s the right fit, we structure a deal that benefits both sides. It works very well indeed. It’s definitely not a tick-box exercise.”
What makes an IFA firm acquirable?
AFH has acquired a mix of retiring IFAs and larger firms too in more recent times, with a focus on pensions and investment-centric businesses. “Even though retiring IFAs don’t significantly impact our profitability, we see value in maintaining continuity of advice for clients and providing opportunities for our advisers. Cultural alignment remains the priority. “Nice people, the right fit—everything else is secondary,” says Hudson.
What would you say to IFAs considering a sale?
For firms contemplating a sale, Hudson stresses the importance of transparency and trust. “Trust is everything. We won’t do a deal unless we’ve explained what life post-acquisition will look like for them, their team and their clients. We don’t want unhappy people in the business afterwards.”
But it is a two-way street, so he advises sellers to be upfront about any issues. “A problem isn’t necessarily a deal-breaker, but we need to know about it.”
Due diligence is also crucial. “The process is time-consuming, particularly with a share purchase. Sellers should be prepared to commit resources to it.”
Whilst recognising it’s an important factor, Hudson is clearly prepared to pay the right price for the right firm, but he warns against focusing solely on price saying: “Yes, valuation matters, but lifestyle and cultural fit are just as important. Some sellers meet multiple acquirers and feel in demand, but I’d strongly recommend that they stay grounded and make decisions for the right reasons.”
Adding value post-acquisition
Beyond financial incentives, AFH supports acquired firms in several ways. “One of the biggest advantages for an IFA firm of joining a larger business is shedding administrative burdens. I remember the relief of no longer handling regulatory reporting myself – I even used to do the Gabriel returns myself back in the day,” Hudson recalls.
Flexibility is another key benefit. “Not every business owner wants to go from 100 mph to zero. We accommodate those who want to adjust their work-life balance post-sale.”
AFH also makes a point of keeping former owners like these motivated. “We structure deals with upside potential if vendors can continue growing their business post-acquisition.”
Challenges in consolidation
Of course, the broader advice profession faces both opportunities and risks – something Hudson has strong views on. “Private equity can be a force for good, providing capital to fuel growth, but it requires a disciplined management team. Without that, it can be destructive,” Hudson warns. “Some firms are acquiring too quickly without integrating, which creates instability. I worry that short-term financial motivations are driving behaviours that aren’t in the industry’s best interests longer term.”
He also hopes that greater regulatory scrutiny is proportionate and allows businesses to grow.
Is vertical integration a good thing?
Vertical integration is becoming an increasingly common strategy among larger financial advice firms, with many seeking to capture a greater share of the value chain by developing in-house investment solutions and proprietary platforms.
Hudson believes that the move can offer significant commercial benefits, saying: “Capturing more of the value chain by co-manufacturing platforms and bringing investment management in-house is good business and a trend that is set to accelerate, particularly for larger firms,” he said.
According to Hudson, vertical integration has the potential to widen profit margins, improve operational efficiency, and give advisers more control over the client experience. However, he also warned that such shifts must be driven by what’s best for clients, not simply business incentives. “Assets should only be transferred where it is demonstrably in the clients’ best interests and should be as a result of individual client advice rather than a bulk transfer,” he said.
AFH, which launched its own platform in 2009, still holds the majority of client assets with third-party providers. Hudson noted that the firm supports this approach with research and model portfolios spanning more than 50 platforms and providers—part of its commitment to maintaining independent, client-first advice.
Opportunities for growth
Despite potential headwinds, Hudson sees a bright future for the consolidation of the advice profession. “The UK IFA market is still highly fragmented, and the economics of acquisition strategies remain favourable. There’s ample opportunity for growth, with plenty of money available to be deployed.”
U.S. private equity interest remains strong. “In the U.S., RIAs (the equivalent of UK IFAs) sell for 20-24 times EBITDA. The UK sector is viewed as cheap by comparison, which fuels continued consolidation.”
Lessons from 20 years of acquisitions
After two decades in the acquisitions space, Hudson has learned key lessons as he makes quite clear saying “If something doesn’t feel right, walk away—no matter how good it looks on paper.”
Culturally, AFH integrates acquired firms rather than operating a conglomerate model. “We want people who are looking forward, not dwelling on the past.”
He also emphasises the importance of operating a client-first approach. “We examine what clients are being charged, how they’re being serviced, and ensure they’re in a better position post-acquisition. For us, it’s people who really matter.”
The future of IFA acquisitions
Looking ahead, Hudson is extremely positive, believing that the financial planning profession is set for a strong future and that it will continue to grow and thrive in the years ahead. He sees further segmentation of IFA clients, the consolidation of larger IFA firms and increased adoption of AI-supported advice models. “Advice technology will likely expand to create efficiencies but I can’t see it replacing advisers in the short term.”
He predicts the growth of vertically integrated business models, continued consolidation, stable advice fees but pricing pressure on platforms and investment management.
Due diligence is key
For IFAs thinking about selling, Hudson encourages due diligence. “Explore all your options, whether you’re working with an M&A broker or you want to contact us directly.”
But for AFH, the goal isn’t simply to grow for growth’s sake; it’s to build a truly unique offering for both clients and advisers. By acquiring new businesses, they feel that they are able to enhance their ability to positively impact the lives of clients, whilst also helping to close the advice gap.
Of course, the introduction of talented individuals into the team brings both valuable expertise and experience that ultimately benefits all the firm’s clients and strengthens its overall service.
In conclusion, AFH remains committed to long-term, sustainable acquisitions, delivering what money can’t buy. As Hudson puts it succinctly, “we’re here to build a business that lasts and not just for short-term gains. That’s what really sets us apart.”
About Alan Hudson
Chartered Financial Planner
Alan Hudson founded AFH Wealth Management 35 years ago. Alan is responsible for the day-to-day running of the advice firm, with a particular focus on strategy. He has considerable financial planning and investment management experience, and under his leadership the company has grown to over 700 staff and advisers, managing c.£9bn of clients’ assets. The business has grown both organically and through acquisition, and remains highly acquisitive. AFH made its first acquisition in 2004 with many more firms joining the business since.
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