Guardian Advice will be providing financial support for adviser principals wanting to sell their businesses.

The dealer group is offering to buy up to 100% of a practice to give younger advisers time to raise the necessary capital for a purchase, Guardian EM Simon Harris told insuranceNEWS.com.au.

“We found younger advisers in a practice are minority shareholders but they can’t afford the financial commitment to buy out the retiring principal,” he said. “Therefore we will buy a stake to eventually sell to these advisers.”

Mr Harris says Guardian doesn’t intent to be a long-term shareholder and will sell down its stake to zero over time.

Some principals also intend to remain in the business after sale “but want to realise some of their equity to finance future lifestyle changes”.

“What we are finding is principals no longer want to sell the practice and shut the door,” he said. “They have too much vested in the business to just walk away. They want a dignified exit.”

The move to sell the practice back to Guardian is also countering the depressed prices some businesses are experiencing.

Mr Harris says life insurance practices are still in demand and achieving good prices, but those with extensive corporate superannuation exposure are proving harder to sell.

The move is also protecting Guardian’s network, because it reduces the risk of the practice being sold to another dealer group.

“The dealer group has completed four transactions by buying stakes in practices and has a number under way.