An adviser who has been in the industry for 25 years plans to retire, merge or partner with a suitable practice. The firm holds its own registered A.F.S.L. and office at Level 1, The Mechanics Institute, 202 Hannan Street Kalgoorlie, Western Australia.
The practice is built around an advice model delivering services predominantly to high-net- worth individuals, Self-Managed Super Fund trustees and private investors.
Practice income
- Fee for service $410,000 (annual service contracts)
- Insurance renewal commissions of $115,000
- Advice fees – transactional $78,000
Yearly total Income is $603,000 (estimated 2023 FY)
Funds under Advice
Investment – $59,431,521.93 – SMSF & Trusts
Lending – $6,700,000.00
Financially
The firm transitioned from a commission-based remuneration to an annual fee-for-service model in 2008. This has been further refined to fixed fee pricing. It seems to work; the clients like the transparency, and the monthly fee collection is attractive.
Fees
Fees collected are primarily annual service contracts, reviewed and debited directly from clients’ nominated bank accounts—transactional advice fees billed directly for immediate payment.
Client demographics
The practice services 73 SMSF’s and several associated investment and unit trusts as of April 2023. Sixty per cent of clients were regionally located (Kalgoorlie and surrounding areas extending to the South Coast); of the remainder, thirty-seven per cent reside in Perth, the balance in the Southwest of W.A. as well a number overseas and the Eastern states.
Composition of client base
Of the 73 Self-Managed Super Funds, there are a total of 136 members;
- 50% self-employed (20% Trades and services, 21% Professional degree qualified)
- 10% retired.
- 40% employees (6% Trades and services, 19% Professional degree qualified)
Age demographic
| 24-34 | 5% (6) |
| 34-44 | 13% (18) |
| 44-54 | 32% (44) |
| 54-64 | 36% (48) |
| 64-74 | 10% (14) |
| 74-84 | 4% (6) |
Operational
Firm Human Resources
The firm has one C.A.R. with one AR*
- 1 X Financial adviser – fully FAR compliant, CFP, SSA and Registered tax agent*.
- 1 X Senior Associate off-site – advice. (To commence PY 2024 -25)
- 1 X Customer service manager
- 1 X Accountant/mortgage broker
We will commence recruitment for an additional accountant/administrator for 24 fy. This will be an offshore appointment.
Technology Stack – cloud-based.
Record keeping – digital.
NetDocuments cloud-based (AWS Aust) record and email management system.
www.netdocuments.com
Hard docs – on-site storage of permanent documents. (deeds, company registers)
CRM, advice prep and modelling
AdviserLogic, Optimo Pathfinder
Product Rex
CDM Insurance
My Prosperity – client portal
Other
MS Office 360, Planner, SharePoint.
BGL 360 SMSF, BGL Invest admin & tax platforms. www.bgl.com.au
CAS Corporate Affairs, DocuSign
Xero (internal accounting)
Comms I.T. & socials
MS Outlook, Calendly
Mailchimp, Facebook, LinkedIn.
Loom, Zoom, Chat.
Platforms
Asgard, BT Panorama. (legacy)
Dash – MDA
Macquarie CMA
Ausiex – share trading
Insurance providers
- Resolution Life (ex AMP business)
- TAL
- AIA
- Zurich
- MLC
AFSL – conditions
The firm has operated under its own financial services licence since 05/09/2008. No conditions are restricting the sale or transfer of the firms’ interests.
Potential
Over the years, the firm’s growth and development have always aligned with the client’s needs and our ability to deliver services efficiently. We have quickly adopted improved digital systems; our document management, client portal, investment and portfolio management software are industry-leading. As a regional practice, we have a national footprint.
While our initial advice may focus on smsf, many of the outlined areas form part of our total advice offering.
- Strategic superannuation advice. – echelon
- Fund aggregation. pooled/segregated investment strategies. ▪ Contributions T.S.B. provisions, reserve strategies
- Pension structures and T.B.C. application.
- Estate planning.
- Investments – echelon
- Direct and listed asset management▪ Investment research for listed – Multi-Asset & ETF portfolios. ▪ Limited recourse borrowing.
- Cashflow and benefit management
- Personal protection – echelon
- Estate planning
- Insurance
- Finance – echelon finance
- Specialised finance – commercial, residential (lrba).
- Fund administration – smsf.co
- Preparation of smsf financials and lodgement of fund tax and regulatory returns.
- ASIC company registration and returns.
Structures platforms
As an advisory firm, we are somewhat platform agnostic. Client investments, advised and otherwise, are recorded and reported through the B.G.L. suite of products, a non-custodial service that retains a high level of reporting and taxation management.
Overview and opportunities
The firm has many long-standing clients, with an average term of engagement of nine years. The business is robust, reporting a thirty per cent increase in fund and client numbers over the past two years. This is partly due to our area and demographic, consistent with a young population and a high average income (A.B.S. statistics).
Our product is fit for purpose and competitively priced. Echelon (AFSL) and SMSF.Co (Tax Agent) is a complementary practice. We look forward to an opportunity to merge, partner or sell the firm.
Future business focus/opportunity.
Our practice analysis shows that 85% of our SMSF’s have been established through the firm. The remaining are SMSF’s that trustees have transferred from other advisers, and we regard this as a positive trend and opportunity, particularly for specialist financial advice.
Considerations
The vendors are willing to consider the following conditions:
- 3.0 Times regular recurring income
- 85% Paid up front of item (1)
- The balance paid out over 24 months by equal monthly instalments.
The vendor is willing to remain as a referrer of new business and new clients and BDM to the client base for the 24 months in item (3).
Preference will be given to acquirers with approved funds rather than a contract with “subject to finance” conditions.
For an introduction, please contact Jim Prigg on 0408 520 453 or jim@knowledgemaster.com.au.