Launching an advice market consolidator at a time of higher interest rates and declining assets under management is a brave move and one which might be made by a risk-hungry tyro in an early stage of their career, desperate to get ahead.
But Mark Howlett, co-founder and chief executive of Liberate Wealth, is at the opposite end of his career to that stereotype, having spent 35 years in the advice industry and twice been a chief executive.
However, instead of embracing the sunset stage of his career, Howlett is back on the road, actively looking to the UK regions to find advice companies to acquire and grow organically from these “regional hubs”.
On his motivation, Howlett says: “I want to build the advice firm of tomorrow. I have set up businesses, been chief executive, grown businesses, restructured businesses and sold businesses in my career.
“This is my chance to bring the skills I’ve learnt over 35 years in the industry — 35 years as an adviser — to the market. And I think the market is crying out for a change from the way consolidators act now.”
The first company Howlett created was in the 1990s, when he set up his own independent financial adviser practice. This was before family commitments sent him in search of greater security and he became an employee, embracing sales roles and eventually becoming group chief executive of Broadstone, an advice and professional benefits company.
He subsequently acted as co-chief executive of EQ Investors, before exiting that role to create Liberate Wealth in 2022.
Money makers?
Speaking about what he feels he can do differently to the swathes of consolidators and trade buyers that have been roaming the landscape acquiring IFA businesses in recent years, Howlett says: “The first thing I think sets us apart is the time horizon. We are backed by the founders of VAR Capital, which is a multi-family office, and so can have a longer time horizon than private equity. In the case of this project, it’s 15 years.
“Because they are a multi-family office they understand what an IFA does, and basically the chief executive at VAR Capital does the same job as an adviser does.
“And in terms of how we can help the advice firms we acquire to grow, one of the things I have done throughout my career is use innovative technology in my businesses quite quickly. For example, we were using cash flow modelling back in 2006, which was considered innovative at the time.”
VAR Capital has assets under management of £1.5bn, and the minimum ticket size to become a client is £20mn.
When advice companies are acquired it is usually based on a percentage of the AUM. And with AUMs generally lower as a result of the declines in the equity and bond markets since the start of 2022, this means advice companies can be bought for less than what some of the consolidators paid in 2020.
