InvestorDaily can exclusively reveal that AD Capital and Linchpin Capital signed a heads of agreement to merge on 27 March and plan to list on the ASX under the AD Capital Group brand in July.
Linchpin Capital is the parent company of Peter Daly-run Beacon Group, which houses licensees The Financial Link Group and Risk and Investment Advisers Australia (RIAA).
Once merged, AD Capital will have $8 billion in funds under advice, $520 million in funds under management and approximately 300 authorised representatives.
InvestorDaily understands AD Capital Group will lodge a prospectus in late June in preparation for the company’s listing.
The new entity will be a full-service wealth advisory firm, with a financial planning dealer group (Beacon Group), a product provider arm (AD Funds Management) and a stockbroking/corporate advisory division (AD Securities).
The AD Capital Group board will consist of non-executive chairman John Darling and non-executive director Patrick Stringer, along with executive director (and former Linchpin director) Paul Raftery.
The merged entity is still looking for a chief executive but Ian Williams, former executive director of Linchpin, will be the group’s chief operating officer.
Beacon Financial Group managing director Peter Daly will continue in his role, while Brian Parton, Paul Nielsen and Andrew Vallner will head up AD Capital’s stockbroking, superannuation and research functions, respectively.
In a letter to Linchpin’s 300 authorised representatives on 30 April, Mr Williams and Mr Nielsen said it had “always been our intention to proceed to a listing when the economic growth of the group compounded by market opportunities [was] optimum”.
“The banking royal commission has provided the catalyst and timing to launch a non-bank/non-institutionally owned financial services group that will not mandate product, services nor platforms and has the potential to be publicly owned and driven by what’s in the best interest of the client,” said the letter.
The combined entity’s growth plan is to “capitalise on the current market environment”, said the letter.
“The poor reputation of bank financial planners together with increased cost of compliance plus fundamental changes in the industry from the FOFA reforms have created opportunities for dynamic, nimble organisations to acquire small-to-mid sized dealer groups,” it said.
“With the provision of research and funds management services, AD Capital can close the circle and offer additional wealth management products and support to the industry and not be reliant on retail clients like other groups in the industry,” said the letter.
The listing was promoted to Linchpin/Beacon advisers as providing “visibility and credibility”, improved governance and a share incentive scheme.
The new organisational structure was unveiled to advisers in PD Day sessions in early May.