Dealer group Genesys Wealth Advisers (Genesys) has capitalised on the demand for succession planning by increasing its equity stake in a number of member firms within its own adviser network.
“We have roughly 10 different equity investments across member firms in the group. The investments range from around 20 per cent in equity to in a couple of firms 100 per cent equity,” Challenger Financial Planning chief executive Greg Kirk told InvestorDaily.
The Challenger-owned dealer has made a total of $20 million in member firm investments in the last six months. The latest is Perth-based practice, Aspire2.
The transaction involved a mixture of equity and debt allowing the principals of the firm Malcolm Davis and Kim Hunter to merge with a second Genesys firm, HLM, to form Aspire2.
This allowed the principal of HLM, Bruce Langoulant, to begin a gradual transition into retirement after 21 years in financial planning.
“We normally come across the firms in our succession planning discussions. So it’s normally an outgoing partner who may be leaving a group,” Kirk said.
“Other partners in the business, rather than exchanging equity from within the group, are looking to come in but not upset the way in which the firm operates. So we become a natural opportunity there,” Kirk explained.
A number of Genesys’ member firms are also using the equity stake as a boost of capital to buy businesses or books of businesses, he said.
Genesys now has a footprint, through the part or full ownership of member firm practices, in cities across all states including Toowoomba, the Gold Coast, Brisbane, Sydney, Canberra, Melbourne, Adelaide, Perth, Launceston, Bernie and Hobart.
