Meet the M&A team at Perspective and hear their thoughts on acquisition success

This month Vicki caught up with the M&A team at the Perspective Financial Group to discuss the company’s progress, vision, and developments in the acquisition space.

Could you start by introducing yourselves, your roles, and Perspective?

We are:

• Sam Ward – Head of M&A
• Sam Smith – Group M&A Director
• Dave McWilliams – Group M&A Director.

Together we form part of Perspective’s acquisition team, one of the largest in the sector. We focus on acquiring high-quality, client-centric, financial planning businesses across the UK.

Perspective is one of the longest-standing and most active players in the market. At our core, we are a whole-of-market financial planning business focused on providing the best outcomes and solutions for our clients.

Since our foundation in 2008, we have grown to a national business of £9 billion assets under advice, 625 staff, and 46 offices.

Along the way, we have made more than 100 acquisitions, and have consistently refined our process to ensure that we learn from our experiences.

You were one of the first firms to move into the acquisition space, and while others have come and gone, you continue to be stable over time. What do you think has created this success?

One of our unique selling points is that our CEO, Ian Wilkinson, is still a practising IFA. This gives us in-depth insight and knowledge of what works for clients and advisers, helping us maintain a constant focus on putting the clients first in everything we do.

Ian’s vision and values are fully embedded within the business. Our success is down to a rigid and consistent focus on these values which have shaped Perspective from the very beginning:

Client-centric culture

This derives from the mantra that we would never expect a vendor to advise anything to their clients that we wouldn’t advise to our clients – and we wouldn’t advise anything that we wouldn’t advise to one of our close friends or family members.

Strong support for our staff

We value close client relationships, local office presence, and fostering a collaborative culture across our group.

Consistency of management

Our CEO, CFO, and CRO all have significant prior industry experience and have been in their current posts since 2013. The stability of our management team has always allowed us to take a long-term view.

Support for regulatory changes

Our team welcomes regulation, rather than trying to work around it.

Know our strengths

We have never over-stretched ourselves. Our experience has shown us what works and what doesn’t in the acquisition process.

20 years from now, we want to still be here – and it’s the decisions we make today that will protect us and the businesses that we acquire.

You have recently secured new private equity investment, testament to the quality of your group and the opportunity ahead. Where are you now and where would you like to be in five years?

Charlesbank are an ideal partner. Their fund was borne out of the Harvard University endowment fund, meaning we are fully aligned on our client-centric approach.

Our growth plans are predicated on doing more of what we have been doing for the past five years.

Our whole-of-market, client-centric acquisition approach works for a large portion of vendors (not all), and we have the team and experience to deliver against our business plan.

Five years from now, we’d like to be a significantly larger business, with all of our core principles and values still intact.

What are the top three non-negotiables when you are meeting with a potential seller?

One of the first things that we look for in any meeting is alignment with our client-centric culture. Ian’s input into this is invaluable, which is why he is involved in the majority of initial meetings.

We like conversations with vendors that are led by how their clients can get a great outcome from a transaction. A positive experience with Perspective means they can look their clients in the eye in the supermarket car park years after a transaction has happened.

Provided that this fundamental objective is in place, we do not have a long checklist of non-negotiables.

All acquisitions need to adhere to our regulatory requirements post-transaction, and we fully integrate acquisitions across our back-office systems and processes.

We do not see the need for micromanagement. On too many occasions we have seen successful businesses get stuck in the bureaucracy of being part of a larger business – we seek to avoid this at all costs.

There is the opinion held by some, that selling to a consolidator means a shoehorning of clients. How do you balance building a harmonised investment proposition, with fair client outcomes?

For us, this is quite simple – we are a whole-of-market IFA and we do not shoehorn clients into our platform (we don’t have one) or central investment proposition.

Perspective does have its own central investment proposition (Cambridge Investments) but there is no financial incentive to either our financial advisers or any of our acquisitions to use it.

We do all that we can to ensure that Cambridge provides a breadth of good-performing investment solutions at an attractive price point, and it is only adopted where it is in the client’s best interests.

By sticking to this principle, we always ensure that clients get a fair outcome

The M&A space post the Consumer Duty is very different. Due diligence has ramped up, reflective of the enhanced focus by the regulator. Where have you seen the most changes, and what are the areas where you are seeing firms struggle?

Our approach to acquisitions and due diligence remains fundamentally unchanged.

We do meet a wide range of firms – at one extreme we have been impressed with the progress that some firms have made under Consumer Duty, and at the other end, the implementation of the changes required is a catalyst for selling their business.

There is a heightened focus on annual reviews and ongoing servicing of clients as part of our due diligence. There’s no flexibility for acquisitions when it comes to the adoption of our internal regulatory procedures post-acquisition.

Ultimately, our Consumer Duty plan is focused on providing services to clients that meet their requirements.

Integration is challenging but essential to the success of an acquisition for both parties. How would you advise sellers to approach the integration process?

We firmly believe that integration is key to the long-term success of our business, and the businesses that we acquire.

As such, we have invested in a very large integration team, with the aim of doing much of the heavy lifting ourselves. This makes the process as manageable as possible for the vendors – for whom the acquisition process can be time-consuming.

Integration does not mean bureaucracy. Our aim is to give back time to vendors and advisers so they can spend it with their clients and growing their businesses.

Our advice to vendors would be that where a deal seems too good to be true, it rarely is.

Any acquirer who promises no change or integration is ultimately setting themselves up for a fall. Business models, management, and regulatory oversight become untenable in a group where each office is following separate processes and procedures.

If someone was three years away from exit, what advice would you provide them with?

Focus on what the best outcome looks like for you and your clients and work backwards from there.

Nearer the time, do some due diligence on the buyer universe and take references.

There are a lot of buyers in the market, and many promises are made as part of the beauty parade process. At the end of the day, you need a buyer who sticks to their word and can deliver the acquisition that has been agreed.

Here are our two top tips:

1. Ensure that your client data and financial/regulatory information are in good order – One major item that delays, or can ultimately bring an end to, transactions is the lack of available or coherent data.

Understanding your data better in advance of a sale process will likely lead to the best outcome, and it can inform some of your decision-making along the way.

2. Address any regulatory issues head-on, well in advance of engaging in a sale process – Any savvy acquirer will discover potential issues as part of their due diligence, and burying one’s head in the sand is never the right answer.

Get in touch

If you’d like to learn more about Perspective, email enquiries@pfgl.co.uk, or call 0161 244 9759 for a chat.

If you’d like to learn more about working with Melo, we’d love to hear from you too! Hit us up by email at hello@melo.co.uk or call us on 0113 4656 111.