Background
Recently AS Advisory was bought in to assist an operator of a financial services business with a group restructure.
Our client was a financial planner who over the years had grown the business through natural growth and acquisition. In the majority of cases the acquisitions were acquired by acquiring the equity in the acquired practice. This resulted in a number of service line operations being operated through a number of different entities. Over time the group had grown to over 20 different entities despite the business really only offering 2 main services, being accounting and financial planning.
The Issue
The structure created significant inefficiencies across the group including additional statutory reporting requirements, staff employed in different entities, additional lodgement fees, different billing systems, additional software subscriptions.
On top of this the structure had become a distraction to the owner as a large portion of time was now occupied with the management and compliance across multiple areas.
What we did
AS Advisory initially conducted a valuation of the group to identify the overall value of all the different businesses along with the value of the accounting service line and the financial service line.
The valuations provided a basis for discussion as to what the appropriate structure should look like and what the tax implications may be on restructure.
Outcome
Based on the analysis we undertook we were able to recommend to the director an appropriate structure going forward. This structure was built around four pillars, the accounting business, the financial planning business, the staff and the IP.
Following our advice on the appropriate structure and the valuation, the client was able to work with her accountant and advisors to implement the new structure while minimising any tax implications.