National adviser AFH Financial’s chief executive has signalled a move into what he defines ‘financial planning investment management’, as part of a strategy to compete in the wealth management space for outsourced investment business from other advisers.

Speaking to FTAdviser, the firm’s chief executive Alan Hudson, detailed his five year strategy, which involves both continued acquisitive growth in core financial planning, as well as a plan to expand into managing outsourced investments.

“We want to define a sub-sector which is financial planning investment management, where financial planners own the client relationships and we just manage the money to help clients reach objectives.”

AFH’s results, published today (16 March), revealed that total revenue growth had trebled to £15m for the period ending 31 October, whilst gross margins were held at 51 per cent.

Recurring revenue was also up, accounting for £8.2m of total revenue during the year, compared to £5.5m in 2013, which was partly attributed in part to the firm’s seven acquisitions, expanding operations into Scotland, Cornwall and East Anglia.

Mr Hudson said that this growth strategy would continue, with a “very strong” pipeline of adviser acquisitions for 2015.

“What we are seeing now are larger deals. We prefer ‘buy and keeps’ rather ‘buy and gos’. As times goes on, we will buy bigger businesses; it’s inevitable to accelerate.

Businesses that have bought prolifically in recent years have been tagged as ‘consolidators’, a label Mr Hudson rejects. He says by definition a consolidator focuses on buying businesses and would not have anything to do if it stopped buying.

“We are first and foremost a financial planning business,” Mr Hudson added.

In January, Tavistock Investments acquired Standard Financial Group, the holding company of troubled network Financial Ltd, for a minimum price of £2.7m.

Mr Hudson said: “We can’t understand why you would buy a network, that is more about getting funds under management and we are more about financial planning and funds under management flow as a result of that. Those who buy networks are trying to peddle their wares.”

He added that with three weeks to go until the new pension freedoms, AFH have spent a couple of hundred of hours working out how to mitigate adviser risks.

“Pension Wise is a massive opportunity for advisers, but there are massive risks. The risks are that someone can take the money and spend it, so then how is the adviser liable.

“The legislation is, in my view, irresponsible, as there will be a tranche of people that will do the wrong thing for short-term reasons.”

donia.o’loughlin@ft.com