Sequoia Financial Group has bought the wealth division of Yellow Brick Road (YBR), which will be incorporated into its wholly-owned subsidiary Interprac.
The transfer of the wealth advice and life insurance distribution business will include YBR advisers who will become licensed under Interprac Financial Planning.
Following the sale, which is set to complete in early 2020, an onboarding process will take place and YBR financial advisers will enter into agreements with Sequoia.
If they wish to do so, they will be able to keep serving their existing clients and “retain their rights to income from their client books”, YBR said.
But for those who do not want to be transferred to Sequoia, they will be given assistance in selling their rights to income from their client books; either to other YBR Wealth advisers or within the Sequoia group.
Terms and conditions
The wealth management firm said the total purchase price is approximately A$2.5m (£1.3m, $1.7m, €1.5m), but only if all of its advisers are transferred to Interprac.
The sum will be paid in four equal half-year payments, with the first one due on completion.
In the event of people opting out of the transfer, “the purchase price will reduce pro rata for any non-transferring revenue streams”, it added.
Other potential adjustments to the final price are:
- The inclusion of YBR superannuation book,
- The termination for cause of any advisers by the Sequoia Group during the first 18 months after completing the sale, and;
- The reduction of income due to regulatory or legal failures by the transferred advisers.
Mark Bouris, executive chairman at YBR, said: “The decision to exit the management of YBR’s wealth business was driven by YBR’s recent strategic pivot away from wealth management, in which it lacked scale in an increasingly regulated environment, to focus on the mortgage market.”
Garry Crole, chief executive of Sequoia, said: “From Sequoia’s perspective, this gives us the opportunity to significantly enhance our core existing advisory and wealth management business, whilst providing our advisers with expert solutions for their client’s mortgage needs.”
