Fairstone Group achieve 50 per cent growth in recurring income

Fairstone Group, which incorporates one of the UK’s largest Chartered Financial Planning firms, has seen a more than 50 per cent increase in recurring income according to its latest results.

Audited accounts just completed for 2018 show that recurring income has increased to £34.1m, up from £22.2m in 2017, representing 63 per cent of advisory revenue.

Meanwhile total client numbers during this period have risen over 16 per cent to 57,000, while funds under management have increased by 36 per cent to £7.2bn with funds under advice rising to £9.6bn. Total revenue for the 2018 financial year has also grown by 20 per cent to £58m, representing an increase of £10m, with adjusted EBITDA showing a profit of £2.5m.

This solid performance across the key metrics of the business is further bolstered by new half year figures for 2019, which show continued momentum. As at the end of June 2019, Fairstone had increased its client base to 59,000 and recurring income had also reached a new high, representing 67 per cent of total advisory revenue.

Fairstone is a full-service wealth management house delivering integration-led growth. With a head office in Newcastle and a significant presence in London, the group now has 340 regulated advisers and 220 operational staff who operate across 48 locations throughout the UK.

Commenting on the annual results, Fairstone CEO Lee Hartley explained that the focus for 2018 was delivering “sustainable, responsible growth” and this had been largely supported by significant traction in the group’s proprietary Downstream Buy Out (“DBO”) programme.

Lee added: “I am delighted to announce that the Group continues to make excellent progress against its core strategy and growth plan, with the trading and operational results in 2018 being ahead of forecast.

“In 2018 we delivered strong progress across all areas of the business.Revenue and adjusted EBITDA performance has been substantially ahead of the prior year in each channel and both our advisory and fund management businesses are operating profitably and with a complete absence of cross-subsidisation.

“A combination of organic growth and the success of our unique DBO programme, which reverses the traditional buy and build approach, is continuing to deliver exceptional results and to drive growth, with a series of deals with partner firms being completed at various stages within the financial year.

“Our considered approach, together with our proven business model and the significant financial backing that we have at our disposal, allows the management team and shareholders to look forward to 2019 and beyond in a positive manner.”

In addition to completed acquisitions, five firms joined the DBO programme in 2018 with a view to full acquisition within the next two years. A further five firms have also joined the DBO programme in 2019 so far, and interest in the proposition remains very high.