Listed financial services group acquires advice firm

In a statement, Sequioa Financial Group said it had acquired Total Cover Australia, a corporate authorised representative of its subsidiary advice business, Interprac.

"The business has averaged $800,000 of annual income for the past three years – 30 per cent new business, 70 per cent recurring income – and will be absorbed into the 100 per cent owned ‘direct’ client base of Interprac Securities, commencing July 2020," the group said.

Sequoia said the transaction was the fourth purchase of a retiring adviser's client book that the group had made in the last three years, and that it was actively looking for further opportunities to acquire the businesses of advisers that were choosing to exit the industry.

"Sequoia sees these opportunities as being beneficial to all parties, as the adviser realises the value of their asset, their clients retain the personalised service they’ve previously received, and the company is able to absorb these portfolios without significant additional expense, making a strong contribution to our [earnings]," the group said.

The company said it was particularly interested in future acquisition opportunities in NSW and Queensland. 

Sequoia said Total Cover Australia's owners would retain an equity stake in the business "to maintain a continued relationship with Interprac Securities and the wider Sequoia group".

"Sequoia will issue 1.5 million shares immediately and make cash payments of $900,000 over the next two years to complete the purchase," the company said.