Fairstone reported this morning it has reached a deal with Wales-based DHD Wealth Management. No fees for the deal have been disclosed.
The deal will boost Fairstone’s total revenue by almost £1.5m, with funds under management rising by approximately £207million, it said.
Four advisers and five support staff will join the broader group, adding to its growing adviser base of over 265.
Led by Aled Davies, Clive Davies and Denise Jacob, DHD specialises in IHT planning, investments, and pensions. It has offices in Aberystwyth and Cardigan.
The deal is done through a “downstream buyout model” which involves the company taking an initial minority stake in an IFA business and over a number of years integrating the firm into its systems and structure.
This is done to help to minimise exposure to integration risk and allows the acquired company to profit from their own success upon final acquisition, Fairstone said.
It is the latest “downstream” deal to be announced since Fairstone received £25m of private equity backing from Synova Capital earlier this year.
Aled Davies, principal at DHD Wealth Management said: “We joined Fairstone because they are an IFA which has a DFM arm, but does not expect firms such as ourselves to ‘shoe horn’ clients into their proposition.
“Having looked at many proposals, the Fairstone package appealed because we can ultimately complete this transaction yet continue to service our valued clients with whom we have a long term relationship. The fact that Fairstone will also help us recruit new entrants into the business to expand also appealed.”
Lee Hartley, CEO of Fairstone Group, said: “With such a strong focus on providing their clients with first-class service, we knew that DHD Wealth Management would be an excellent fit with Fairstone, both commercially and culturally.”