Infocus Money Management has offered to take an equity stake in each of its practices in return for them adopting the group’s corporate model.
The “buyer of first resort” [BOFR] strategy unveiled in March is designed to be a growth and succession plan for its 34 practices.
“Most advisers don’t have a business, they have a practice. What we want to do is transition advisers’ practices into businesses,” Infocus Money Management managing director Darren Steinhardt said.
“They’re going to go through pain and have to make a lot of changes, but advisers know if they take on the Infocus business model, it’ll make their business more valuable, more profitable and [it’ll have] an aggressive buyer.”
Practices must implement the Infocus corporate model which covers all aspects of business from financial planning processes delivered through its in-house IT system Platform Plus to company branding.
As part of a succession plan, Infocus will buy advisers out of their practice and help young planners buy into a business by taking an equity stake in a business then sell it to them gradually.
The size of the equity stake will vary from 25 to 100 per cent depending on the degree of implementation of its business process, Steinhardt said.
Individual BOFR offers will be made to the first 10 practices on July 1. Every practice is already committed to the strategy, he added.
“The average Infocus adviser is in their mid-40s. In the BOFR, Infocus partners with its authorised representatives to assist in the development of their business and its transition to the next generation,” Steinhardt said.
The dealer group has 34 offices, 75 advisers, funds under management [FUM] of $1.7 billion and in force risk premiums to $15 million. It aims to have 40 offices, 80 advisers, and $2 billion FUM by the end of the 06/07 financial year.
