Guardian Advice will roll two of its WA financial planning practices into Capital Managers, after the dealer group took an undisclosed equity stake in the company.

Prophet Financial Advice and Warwick Financial Services will be merged into Capital, creating a company with a turnover of more than $3 million a year.

The merged group will have six financial planners servicing the Perth and Bunbury regions, with $5 million of inforce premiums.

Guardian’s practice equity model supports succession strategies by allowing the remaining equity to pass to key advisers, according to Head of Guardian Advice Simon Harris.

“Baby Boomers make up a vast number of financial planning practice owners who have built very significant businesses with substantial value,” he said.

“However, the advisers working in these firms own many of the client relationships… and bring significant value to those businesses.”

Mr Harris says advisers often lack the capital to buy practices “because they are young, usually with families and a mortgage, and are still building their wealth bases. Our equity partnership model will enable the successor to build their wealth and eventually take full ownership of an established practice.”

He says combining Capital Managers, Prophet and Warwick will let them concentrate on core operations, create scale, increase efficiency and be financially sustainable.