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Bankhall chief Mann hits out at buyout promises

Bankhall chief executive Peter Mann has attacked the buyout proposals being offered to advisers by rival companies and brands them “projectile promises”.

Mann says he supportsthe view of Falcon Group chief executive Allan Rosengren, who warned last month that he thought some “rash promises” were being made.

Mann says that two types of scheme cause him the most concern – valuation multiples and equity-participation schemes.

He says: “Valuation mul-tiples of IFA practices varysignificantly, dependent on a vast range of individual properties and a significant number of environmental and chronological influences.

“I would never wish to predict, or even less guarantee, the exit multiple for a sin-gle practice and would certainly not advocate doingso for a collection of such practices.”

Mann questions the economic structure of a business making such guarantees in the future.

With regard to equity-participation schemes, he says: “I struggle to see who would buy such a collective and why they would consider a leveraged valuation.

“The only circumstances in which that may be the case is if the individual elements become homogenised to the degree that they lose their individual identity – but sur-ely that destroys the essence of being an IFA.”

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