The making of a merger: Why IFAs are consolidating expertise and combining skills to help their clients grow

When it comes to supporting businesses as they grow, we’re interested in more than just your name and your revenue. Our decision-making process gets to know the people behind the numbers, finding out why they decided to take on debt financing, why now and where they are headed. There’s a story behind the journey to every loan, and we want to share more of them.

So, we’re taking a closer look at the path our customers have been on, starting with MRW Group, a merger of three regional independent financial advisors incorporated in 2022. Though mergers and acquisitions can have a transactional feel to them, for this group, it was a natural progression for businesses that share the same client-led views. Let’s see what standout features of this merger made it a success.

Acquiring and expanding from its inception

MRW Group was established through the merger of Emet Financial Services (Emet), Merlin Wealth Planning (Merlin) and Mayfayre Financial Services (Mayfayre), and acquisitions were already in the DNA of these businesses before they came together. Merlin had its own history of acquisitions, having made six since its inception in 2018, with the combined group completing 10 in less than five years. This mentality was brought forward when the three companies merged, as they came together to start a much bigger buy-and-build strategy.

The financial planning market is fragmented, with the top five companies accounting for 55.5% of industry revenue in 2020-21. Many independent advisors remain around the country, though businesses are consolidating steadily. But what does this mean for businesses merging now? It offers up the chance to build and enjoy the benefits of a larger, established name, while keeping many of the appealing features that customers like about smaller independent financial advisors (IFAs). But with over three quarters of IFAs planning to retire in the next decade, this can see mergers becoming a more common occurrence over the coming years.

Our Debt Finance Director, Stewart Haworth, supported on this merger, and was impressed with the commitment to expansion from the outset. “The speed at which MRW Group has completed mergers and acquisitions shows a great appetite for finding successful businesses and building upon them. Its growing assets under management show that they’re not only acquiring businesses, but working hard to develop them. This attitude will put them in strong stead to establish a glowing reputation quickly.”

Bringing together leaders with extensive financial sector experience

Mergers offer the chance to pool together the best resources you have across the businesses, including the years of experience in its staff and leaders. MRW Group’s executive committee is comprised of Merlin co-founders James Moyses and Adam Royce, as well as Stephen Winter – a new investor to the group. Between them, they have almost 70 years of IFA and M&A experience.

Mergers also give the chance to boost your existing knowledge by working together with experts in different areas. Each of the executive committee members bring expertise in mergers, but each has additional experience across financial services, from operations to compliance to investment management. This breadth of knowledge is also appealing to customers and can be used as a USP to drive new business for the company.

Changing environment for financial advisors

With the emergence of robo-advisors, and more individuals managing their investments themselves, traditional wealth planning companies have seen some changes in their competition. But investment products remain complex for many people, and the appeal of an IFA is that they can take away the stress of this work for you. This is especially true for high net-worth individuals, who are often time-poor and asset-rich, so need someone who can invest on their behalf wisely.

Businesses need to differentiate themselves to stand out at a time where self-managed investments are becoming an option for more people. From MRW Group, it’s building a competitive advantage in a number of ways: through an executive committee with strong experience across financial services, by offering a range of services such as independent financial planning, investment, and pensions, and by having offices that serve multiple regions across the UK.

Mergers can be risky, but businesses can gain so much from them. MRW Group is an example of taking what has worked previously and expanding it further bringing in additional resources. It has taken Merlin’s track record of mergers and continued it with its own buy-and-build strategy, is a growing trend we are seeing with IFA acquisitions. Effective growth strategies and a clear direction for where the business is headed next is exactly what lender is looking for, which is why we were able to offer MRW the loan it needed, despite being a newly incorporated business.

ENDS

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