WT Financial and Merchant back merger in first post-JV deal

Less than a week after announcing a joint venture to invest in “entrepreneurial” financial advice practices, WT Financial Group and Merchant Wealth Partners have kicked off their partnership with the roll-up of three firms into a single entity – under the working title Hubco.

Titan Financial Planning, Darwin Financial & Retirement Services, and Wealth Connect Financial Services will combine with the backing of WTL & MWP Investco, which will take the form of an initial $3.5 million injection of capital.

Investco will hold a 36 per cent stake in Hubco, while WT Financial will also take a 6 per cent stake in return for its role in “advisory and due diligence”.

The deal is the first cab off the ranks in executing Investco’s strategy of “bringing scale and shared infrastructure to independent advice businesses, while retaining their entrepreneurial roots”.

The $3.5 million will be used to pay down debt, support business growth, and allow the founding principals to “realise some of their equity”.

Titan principal David McLean will head up the new firm as incoming CEO of Hubco and will lead its integration and expansion. Andrew Moo (Darwin FS) and Jeff Stella (Wealth Connect) will join him in the leadership team, staying on as senior advisers and to help guide new acquisitions and adviser mentoring.

Keith Cullen, WTL Financial founder and CEO and Investco managing director, said the group was “delighted” to partner with the advice firms.

“The capital and strategic resources provided by Investco will help drive expansion while preserving each practice’s entrepreneurial flair,” Cullen said.

“We look forward to David, Andrew, and Jeff – and their teams delivering outstanding outcomes for their clients and the wider Hubco group.”

Similarly, Merchant partner and Investco executive director David Haintz said the new Hubco has a “strong future”.

“By offering a long-term patient capital model and strategic insights, we enable advice firms to evolve in line with their unique strengths,” Haintz said.

“This first Hubco launch is an exciting example of how forward-thinking advisers can consolidate and grow without losing their independence, local identity or entrepreneurial spirit.”

McLean added that the deal would provide improved efficiencies for the firms.

“Titan, Darwin FS, and Wealth Connect share a commitment to professional advice and community-minded service,” McLean said.

“Through Hubco, we will create more efficient infrastructure, deliver stronger adviser and client support, and explore further acquisitions. I’m proud to lead such a dynamic group and look forward to working closely with Andrew, Jeff, and our broader team as we grow together.”

The announcement added that Investco would appoint the chair of the Hubco board and the WT Financial and Merchant teams would provide support to the firm’s “entrepreneurial endeavours”.

Speaking with ifa last week, Cullen explained that Investco would be looking to take non-controlling interests in advice firms and backing entrepreneurship, not getting in their way.

“It’s [about] carefully selecting the right practices to back. We want to do that, and other than providing them some strategic support and the capital to do it, we want to get out of their way,” he said.

“Merchant has been successful with this model, and that’s why we’ll be doing multiple of these things. There’s not one answer to the best way to run an advice practice and to operate. There’s not one client retention or recruitment strategy, there’s not one administration strategy, there’s not one pricing model or one area of specialisation.

“Our networks are a broad church, and so, we’ll be supporting multiple of these hubs that can enable just about any practice to want to find a home amongst one of them, if that’s what they’re looking for.”