Australian financial adviser network WT Financial Group (WTL) has formed a 50/50 joint venture (JV) with Merchant Wealth Partners, the Australian subsidiary of New York-based Merchant Wealth Partners.
The collaboration, operating under the name WTL & MWP Investco, aims to offer growth capital to “high-potential” financial advice practices across Australia.
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Investco will take non-controlling interests in these practices, providing them with long-term “patient capital,” a move that sets it apart from traditional private equity’s time-limited investments.
WTL founder and CEO Keith Cullen has been named the managing director of Investco, with Merchant partner David Haintz holding the role of executive director.
Cullen said: “This JV heralds a new era for WTL and for the profession. By combining our extensive national network and deep local knowledge with Merchant’s global expertise and patient capital approach, we are well-positioned to empower practices to innovate and grow.”
The JV will see both parties holding an equal share of ordinary shares in Investco, with additional preference shares issued based on future capital contributions.
Merchant Wealth is primarily responsible for providing investment capital and global expertise, while WT Financial Group will focus on opportunity origination, due diligence, and management, utilising its local network and market knowledge.
Investco’s investment strategy includes targeting “hub” entities, or Hubcos, which are either individual practices or groups of complementary practices with significant revenue.
These Hubcos are selected based on their scalable business models, specialisation in certain advice types, operation within specific market thematics, or their branded marketing models that can potentially be rolled out geographically or scaled digitally.
Haintz said: “Australia boasts a vibrant financial advice landscape, where we see enormous potential for this strategy.
“Merchant’s model has proven to be attractive to growth-oriented practices looking for a partner that can provide long-term, strategic growth capital and preserve their firm’s entrepreneurial spirit.”
The JV also outlines a flexible approach to branding and mergers and acquisitions within the Hubcos. Practices may unify under a single brand or retain their local identities, supported by Investco’s capital and resources for targeted acquisitions.
This strategy aims to provide retirement pathways for current principals and growth opportunities for those seeking to benefit from increased scale.
While Investco will primarily focus on practices within the WT Financial Group network, it is also open to supporting external acquisitions that align with the network’s risk management and operational standards.
