AFH, the rapidly growing Financial Planning-focused wealth manager, is shifting its strategy to focus more on organic growth and less on acquisitions as it prepares for challenges in the wider economy.

The company has acquired 50 IFA firms in the past five years, one of the highest totals of any wealth manager, and has reiterated its target to become the UK’s leading Financial Planning-led wealth manager.

The firm was founded and is led by Chartered Financial Planner Alan Hudson.

In a business update to the stock market today the company said it, “continues to enjoy strong organic inflows of funds from existing and new clients with low redemptions.”

The firm made three recent acquisitions of IFA businesses, bringing its total committed spend to £10.3m since a £15m loan stock placing in July.

The maximum committed spend for the seven acquisitions made in the current financial year is £29.9m.

The board also reaffirmed its aspiration of achieving Funds under Management of £10b over the next three to five years and annual revenues of £140m.

Since being admitted to AIM in 2014, AFH has completed 50 acquisitions and increased revenues by approximately 400%.

The firm has grown rapidly through acquistions and organic growth and says it will make further acquistions but would have more focus on organic growth in the near future, as it did during market uncertainty in 2016. This would help ‘de-risk’ its model, it said.

In its statement to the Stock Exchange the company said: “The board considers that many of the economic and political factors that existed in 2016 are again present and will influence investor behaviour for the foreseeable future.

“Therefore, following completion of the remaining acquisition opportunities identified to the market at the time of the Convertible Loan Stock placing in July 2019 and currently undergoing due diligence, the board intends to focus the company's resources on organic revenue growth complemented by the use of technology to enhance productivity and drive operational efficiencies within its two operating divisions.”

It said as an outcome of this strategy the company does not anticipate requiring any additional funding from the equity market “in the foreseeable future.”

Chief executive Alan Hudson said: “We seek to align our growth with operational efficiencies and during the current year the company has invested heavily in digital marketing and IT infrastructure, all of which has been expensed, whilst absorbing the cost of clients using our Pershing-enabled AFH Direct platform.”

"We were pleased to report robust growth in H1 2019, in May 2019, confirming strong growth in excess of 50% at Revenue, EBITDA and EPS levels and are pleased to confirm that during H2 the business has continued to perform well.”

The company will make a full trading update in early November following the end of its financial year on 31 October.