The listed wealth management company, which has a market cap of $26 million, is currently in active discussions with over 30 accounting firms with three to 10 partners and turnover of $2.5 million to $10 million, Prime Financial chief executive Simon Madder told InvestorDaily.
“The firms we are targeting can be based anywhere in Australia, including regional, as well as New Zealand,” Mr Madder said.
“They should be looking for three things: assistance with growth, succession issues and that integrated wealth management piece.”
“As a board we assessed the opportunities in this space at the moment and concluded that there are probably about 1,500 to 2,000 accounting firms out there with two to three partners plus, which is a space that we play in.”
Prime has over $1 billion of assets under management and approximately 4,000 clients. In addition, the company offers its wealth management and advisory services to 40,000 clients across 30 accounting firms through JVs.
“A lot of the smaller accounting firms can’t really justify having a wealth management arm, so what we bring to the table is the delivery of all their SMSF needs plus the total wealth piece as well,” said Mr Madder.
“For SMSF clients that are more self-directed, we can deliver individual investment solutions all the way through to advisory. We can help set up a wealth division under a co-ownership, a 50-50 equity structure where they can deliver advice to all of their accounting and SMSF clients without having to go through the expense and challenges associated with funding the development of a wealth management business.”
Having partnered relationships through a minority equity stake is the way forward, he added.
“That is what we have advocated from day one,” he said. “Most people now acknowledge that the concept of 100 per cent ownership that proliferated in the past is now redundant.”
