Consolidator Fairstone has launched a new Individual Buy Out programme to help advisers create exit strategies for their firms.
The scheme enables advisers to build a long-term tax-efficient retirement fund while keeping continuity of service for their clients.
Advisers will receive an initial capital sum, a proportion of ongoing fee revenue for an agreed period (typically 15 years), while Fairstone will assist with succession planning including candidate selection, legal, technical and regulatory support.
The programme already has eight deals confirmed, securing £1.5m in fee revenue and adding £130m assets under management to Fairstone’s financial planning business. It is not aimed solely at advisers nearing retirement, instead it is open to younger advisers who are planning ahead to their retirement but still growing their business.
Fairstone chief executive Lee Hartley says: “Our research suggests that the best time to sell a business is much earlier than many advisers believe, and we are now able to help these individuals through that process and beyond.”
Hartley says the proposition addresses an “often overlooked” segment of the market, providing advisers with an “attractive” retirement solution where their client costs will not increase and choice will not reduce.
“With these tools in place, there is every opportunity for advisers to achieve significant growth leading up to retirement within a highly supportive framework.”
Devon-based IFA, Paul Clarke, who has joined the programme, says: “[IBO] provides me with the certainty of a structured exit strategy, with additional financial security for my wife and the peace of mind that my clients will continue to benefit from first class advice.”