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Profile: Lowland Financial managing director on why it pays to be choosy when selling your business

Graeme Mitchell may not have planned his entrance into financial services but the same cannot be said of his eventual exit from the industry.

The 64-year-old managing director of Scottish advice firm Lowland Financial started to think seriously about his succession plans and exit strategy a few years ago.

The question of what he was going to do was driven home to him even more after regular discussions with clients about their retirement plans. However, as a one-man band, Mitchell had nobody primed to take over when he was ready to take a back seat, so selling to a consolidator seemed worthy of consideration.

“I was at a race day with an insurance company where I met an investor in broker deals. He said, ‘If you’re interested in selling come and have a chat’. But the more I got to see the way they worked, I didn’t feel comfortable,” he says.

Advisers shun consolidators in favour of peers

Mitchell felt pressured by the consolidator in question and did not fancy spending the final years of his career doing business its way. After discussions with a couple of other firms who did not measure up either, he was put in touch with a firm called Loyal North and did a deal with the company in September last year.

As part of that deal, he will stay on for at least three years and is now in the process of gradually selling his shares to the consolidator.

“I didn’t know Loyal North. It was expanding and looking to build up 20 businesses around the country. It’s happy to leave you directly authorised and it will buy the shareholdings over time. There is a minimum three-year deal so you stay on for that time. Four or five years later, whoever is selling is gone and whoever is buying gets the profit.”

Five questions 

What is the best bit of advice you’ve received in your career? 

Brett Davidson asked me what cashflow software I used and my answer was ‘What’s that?”. He told me to find out.

What keeps you awake at night? 

Accidental non-compliance. It’s so easy to do as there are so many things to consider.

What has had the most significant impact on financial advice in the last year? 

Regulation. It is the poor punter at the end of it who pays for things like Mifid II and GDPR. It’s probably driving people away from the ability to get advice.

If I was in charge of the FCA for a day I would…? 

There is probably far too much regulation. It would be nice to cut down the rules and regulations, and for people to take some responsibility for themselves, as that would help to cut compliance costs.

Any advice for new advisers?
It’s a great career which is there to be enjoyed. Do things a wee bit differently and think ahead.

The beauty of the Loyal North deal for Mitchell is that nothing significant has changed for clients, his support staff or himself.

“The staff have the same contracts and Lowland is still directly authorised. Some consolidators offer you a bigger sum but it’s based on making fundamental changes to the business.

“The difficulty with a lot of consolidators is that they want to acquire more assets and manage them with their own processes. With Loyal North, you run your business as you’ve run it before,” says Mitchell.

“It could be they eventually come back and say all their firms must use the same back office software – that would make sense. They may all be using the same compliance system over time. After all, they’ve probably got to think about succession; what will happen when the person selling is gone.”

Brett Davidson: Serious about succession? Don’t stay too long

Mitchell is making that event a little bit easier by taking on a new adviser at the end of the year.

“She’s currently working in investment management in London but she’s coming back to the Scottish Borders. She has local credentials and that’s quite important,” he says.

“She’s just had a baby and will start a couple of days a week. By the time she’s ready to commit more to new business enquiries, I’ll concentrate on client reviews. I might go part time in two or three years.”

Although Mitchell points out that, like all plans, these will need to be reviewed and adapted, he thinks it’s good for clients to know what is happening rather than wonder who is going to look after them when he retires.

Mitchell’s main concern about the industry he will leave behind is where the next generation of advisers will come from.

“Advisers of my ilk came from an insurance background but that route doesn’t exist now. SJP has its knockers – and I didn’t like some of the things it was doing – but I do value what it does in providing a training academy,” he says.


2000-present: Managing director, Lowland Financial

1997-2000: IFA, Lowland Insurance

1984-1996: IFA consultant, NPI

1981-1984: Manager, Northern Rock, manager

1977-1980: Trainee, Halifax

“It’s difficult for a small company to take on someone. It’s worth investing time and hoping it will pay off but if it was someone full time and fresh out of university, they are not in a position to contribute much. We need a bigger training scheme which is subsidised across the board, because we need to look ahead.”

Mitchell had assumed he would follow in his parents’ footsteps by becoming a teacher. However, he failed the exams at university, tried his hand at a few jobs including accountancy, then switched his attention to financial services after an assessment with a careers adviser. He started out with Halifax building society then moved to Northern Rock. However, he became increasingly frustrated at how promotion depended on your willingness to up sticks.

“The only way to get a promotion was to move around the country. People who were prepared to uproot their families got one. You weren’t necessarily recognised if you were performing well, just if you wanted to move.”

Phil Bray: Five business lessons to help the next generation of advisers

After 12 years as an IFA/broker consultant at NPI, he made the move to IFA firm Lowland Insurance.

“The idea was that I’d take over from the directors and have a stake in the business. Within six months, they decided they would like to sell the business. I made them an offer and it took about two years to complete. I then set out on my own. It was an established business with a recurring income and it was agreed I’d pay a multiple of the recurring income and pay it off over a three-year period. So I had to make enough to cover my office costs.”

Mitchell’s focus is now on his existing clients, which account for 80 per cent of Lowland’s turnover. However, his door is always open to anyone who wants a quick chat.

“I’d say to people who don’t take advice to come and talk to me for half an hour. I won’t charge. Maybe they’ll see the value in advice, maybe I’ll never see them again but they might pick up a few things. And if they were to pay me £1,000 for example, I would save them a lot more than that in tax.”



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There is one comment at the moment, we would love to hear your opinion too.

  1. I would agree.

    There’s always been a difference between a firm that is acquisition first rather than a firm that is advisory 1st and interested in growth by acquisition 2nd

    Watch out also for differing purchase ‘shapes’ ie I’ve always felt the annuitisation route is preferable to a capitalisation route

    0770 8712967

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