It's a fact. The rich are getting richer. During the 90s, the proportion of the nation's wealth in the hands of the wealthiest 25 per cent grew from 70 to 75 per cent. The Inland Revenue now puts the number of millionaires at 152,000, with about 11,700 people earning more than £500,000 a year.

The mass market

Providing infrastructure, support, brand name, a network of contacts and the resources required to drum up significant levels of new business for independent financial advisers (IFAs) is Inter-Alliance, which currently trades at a market cap. of just under £200 million. Inter-Alliance offers a 'clicks and mortar' business model, mixing the provision of a wide range of financial services over the internet and phone with the largest number of IFAs of any UK company. It now has approximately 1350 each contributing about £70,000 a year according to Iain MacArthur of house broker Bell Lawrie White.

In the six months to 30 June, Inter-Alliance's turnover leapt by 242 per cent to £13.68 million with a profit of £660,000. MacArthur forecasts a loss of £1.4 million for the full year with a £5.3 million pre-tax gain in 2001. He values the company at about 660p per share, well above the current 340p mark. James Hamilton of Numis reckons disagrees, rating the stock as overvalued.

Managing the super-rich

Kingsbridge offers a very different model, sitting in a niche market almost of its own. When the company floated in July about 80 per cent of its business was football-related but acquisitions and organic growth has widened its client base to include 'high net worth' individuals in other sports like cricket and rugby, and the entertainment world. Kingsbridge's latest figures showed a client base of about 5,000, 1,750 of them footballers like Andy Cole, David Ginola and David O'Leary. The company doesn't advertise, relying instead on networking and word of mouth.

As joint managing director David McKee says 'it is a terrific market and we have carved ourselves a niche', providing pension planning, tax-efficient savings and investment plans as part of a pick and choose package. McKee says of the marketplace that 'it is ours to lose...if we've got a poor company in a few year's time, you've only got us to blame'.

Like Inter-Alliance, Kingsbridge's share price already factors in a substantial amount of growth, having more than tripled since its flotation, though profits are expected to grow by about £0.5 million yearly to 2003, on turnover spiralling to £5.5 million over the same time.

Looking undervalued

Standing out from these high ratings is market newcomer Lighthouse, which came to Aim on 27 October and trades at 17 times expected 2000 earnings, falling to 9 times 2001 figures according to the forecasts of Tim Kirkwood at Peel Hunt. These forecasts, which 'are likely to be erring on the side of caution', anticipate a £1.6 million pre-tax profit in 2001, rising to £3.3 million in 2002.

The company's novel business plan involves providing 'high-quality' support services to what are known as 'Lighthouse Practices', which are operationally independent of Lighthouse on a day-to-day basis, but give 20 per cent of all revenues to it. Lighthouse has been pursuing an active recruitment strategy since the flotation and plans to expand its current network of 18 or so practices to about 50, concentrating on those IFAs capable of generating over £250,000 sales a year.