SFG Australia will add a number of advice firms to the group as part of its strategic acquisition plans, however, the company will take its time to expand adviser numbers.
The company had entered into binding agreements to acquire advice firm Life Financial Services and accountancy company Spencers Accountants, both based in Ballarat, Victoria, SFG managing director Tony Fenning said.
The effective date of the transaction is set for 1 June on the completion of the required notice period by the Australian financial services licence provider.
The transaction is expected to deliver $3.2 million in ongoing net operating revenue on an annualised basis.
Fenning told InvestorDaily that “five financial advisers and a similar number of accountants” would become employees of the group, along with the support staff of each business.
However, no further adviser additions were expected off the acquisitions, he said.
“In this case, there’s no immediate need for any additional resources,” he said.
“If anything, the Shadforth Financial Group will use its greater size and some of the support tools to help that Ballarat business grow.”
The latest acquisitions were part of the group’s overall add-on strategy, he said.
“I’m happy to say we’re going to continue to do that,” he said.
“We’ve got quite a pipeline of people that we’re talking to, but it’s a bit like ordering, delivering and flying jumbo jets – it takes a long time to go from the first conversation to actually deciding to get together.
“But part of the valuation criteria, if we’re going to bring in a whole business and in particular their people in, is that they see the world in a similar way to us.”
The group has had a regional focus on Victoria and Tasmania and will continue to support its businesses in regional centres, as its distributable model allows for the group to operate where there are enough clients.
Meanwhile, the addition of an accountancy firm was influenced by client demand, Fenning said.
“Clients are driving us to gradually view accounting services, tax and financial advice more and more closely together and they’re looking to us to effectively integrate those services,” he said.
“There’s a continental drift to the services gradually morphing together, but I don’t think the two professions are merging.”
