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Financial Services Newsletter - Friday 2nd July 2021

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Financial Services News

St James’s Placewill be looking to welcome around 400 people into its academy annually from 2022 by making better use of online training and its existing locations. Previously the company had been able to have an intake of about 250 a year in a face to face classroom set up.

In further news...The UK’s largest advice firm St James’s Place (SJP) has agreed a partnership with Dutch ESG specialistRobecoas it looks to burnish its green credentials. As part of the tie-up, Robeco will act as stewardship Adviser to the firm and engage on ESG issues with companies that SJP’s funds are investing in. The Dutch Asset Manager will also provide case studies and examples of SJP’s engagement work for clients.

Wealth ManagerDolfin Financialhas entered special administration, after the Financial Conduct Authority (FCA) placed restrictions on its activities. Smith & Williamson was appointed as special administrator for Dolfin Financial, following previous FCA restrictions imposed on the firm. At the time of its collapse, Dolfin had £120m of client money and £1.3bn of custody assets on its books. It provided investment management, investment advisory, execution-only and custody services to a range of clients.

Chartered Insurance Institute (CII)CEO Sian Fisher has apologised for any miscommunication caused following its proposals to deregister the PFS, while several motions were passed during the body's Annual General Meeting (AGM).

Portal Financial Services, formerly Portafina LLP, has cancelled its regulatory permissions and stopped accepting new customers. According to the FCA register, the firm applied to cancel its permissions on 18 June and a notice on the firm’s website states it is no longer accepting new clients. 

TheFCAhas identified nearly 60 advice firms that need to carry out past business reviews over potentially unsuitable Defined Benefit (DB) Pension transfer advice. In a submission to the Work and Pensions Select Committee’s latest inquiry into pension freedoms, the regulator said it has seen high levels of unsuitable advice in this area: 17% of files reviewed from 2015 to 2019 showed unsuitable recommendations, while only 55% showed suitable recommendations.

Raymond Jameshas rolled out a new business model for Investment Managers who want to join the outsourcer without launching their own branch. The ‘employee affiliation model’ will allow Investment Managers to join the company as staff, with a set salary, bonus and all the other benefits of full employment, but will still give them the independence to build their individual client books and investment propositions.

Tony Moss and Robert Goldschmidt have opened a new Raymond James Barbican branch after leaving 1825, with multi-asset heavyweights Simon Evan-Cook and David Jane sitting on the new firm’s investment committee. Moss and Goldschmidt have worked together for over 25 years and founded Cumberland Place Financial Management, which was acquired by 1825, the financial planning arm of Standard Life Aberdeen, in 2018.

In further news...Raymond Jameshas opened a branch in the heart of Cheshire to be led by Audrey McKinstry and John Simpson. Under the name Raymond James Chowley, the team will be focusing on servicing clients in the North West of the country.

Active Wealth (UK)Director Darren Reynolds has been disqualified from being a company Director for 13 years after an Insolvency Service investigation found his clients lost more than £24m in unregulated investments. The Midlands-based firm was the first advice business to suspend its Pension transfer permissions in November 2017 over concerns members of the British Steel Pension Scheme (BSPS) were receiving unsuitable advice to transfer. 

Nutmeg’sbackers are in line for hefty windfalls as it emergedJP Morgan Chasepaid £700m for the digital Wealth Manager. The figure will see Founders Nick Hungerford and William Todd net millions through their stakes in the business. The duo set up a new venture in 2018 after leaving the firm.Schrodersalso stands to benefit. The fund giant was part of a group of high-profile backers which invested a combined £18.9 million in the business back in 2014.

Beaufort Groupis rebranding its Discretionary Fund Management arm toYou Asset Management. Beaufort said the rebranding will provide the company with its own ‘distinct identity’ and will enable You Asset Management to grow and provide a broader range of clients with access to its investment solutions.

TheFinancial Services Compensation Scheme (FSCS)had now paid out £24.5m in compensation over claims against collapsed Sipp providerLiberty Sipp. Liberty Sipp was declared in default by the FSCS in January this year after falling into administration in April 2020. Prior to this, the assets of the Liberty Sipp book were acquired by Embark in 2018. 

National IFALEBCis on course to post an ‘acceptable profit’ its Private Equity (PE) backerBPMarshhas said. Financial results posted by the PE Investor this morning cast light on LEBC’s performance during the pandemic, but crucially also show how BP Marsh views the prospects of the only advice business on its books.

Tenetposted a £2.2m loss in 2020 as the costs of merging its different Adviser networks and disruption to new business hit the company’s bottom line. However Tenet Chief Executive Mark Scanlon said the company is ‘back on track’ going into 2021. In its annual accounts for the period between January and 31 September 2020, Tenet posted revenue of £160.7m, a drop of £17.5m from 2019’s £178m.

Total global financial wealth soared by 8.3% in 2020 to a record £178 trillion despite predictions of a decline due to Covid-19, according to a new report by theBoston Consulting Group.

TheLondon Institute of Banking & Finance (LIBF)has launched a new professional recognition designation for Mortgage Advisers. The professional body says the new Certified Mortgage Adviser (CMA) designation provides official endorsement of their skills and knowledge.

Liontrusthas pulled its ESG investment trust IPO after the company failed to raise the £100m minimum set out in the prospectus. The ESG Trust (ESGT) was set to float on 5 July and would have been the Asset Manager’s first foray into the closed-ended space. 

Mergers & Acquisitions

ConsolidatorFairstoneis continuing its acquisition drive by purchasing Belfast-basedASM Financial Planning. ASM is a whole-of-market advice firm specialising in advice and management of investment and retirement portfolios. The acquisition brings an additional 1,500 clients into the group together with ASM’s six Advisers and nine support staff.

In further news...National advice group Fairstone has added Nottingham-based IFA James Ryan Thornhill to its downstream buyout model. The deal will bring in £160m in Assets Under Management, five Advisers and 1,000 clients, Fairstone said.

Mattioli Woodshas completed its acquisition ofMaven Capital Partners UK, a Private Equity and alternative Asset Manager, following shareholder approval. The deal was first announced in May alongside the buyout of North West-based Ludlow Wealth Management.

JO Hambro Capital Management, a top 10 shareholder in Morrisons, has called onClayton, Dubilier & Rice (CD&R), the Private Equity firm circling the British supermarket, to increase its offer to £6.5bn. Morrisons, the fourth-largest grocer in the UK after Tesco, Sainsbury’s and Asda, rejected a £5.5bn offer from the US buyout company earlier this month. ‘Private Equity interest in Morrisons is understandable. It has a robust and resilient business model which is differentiated amongst its peer group and is more relevant today than it was in 2015 when the current strategy was set,’ JO Hambro said in a statement.

Standard Life Aberdeen (SLA)has completed the £102m sale ofParmenionto Private Equity HousePreservation Capital Partners. SLA said the sale, first announced in March, will allow the business to simplify its Adviser strategy around the firm’s ‘core propositions’: platforms Wrap and Elevate.

New York-based Private Equity firmFlexpoint Fordhas completed its acquisition ofAFH Financial Group. Worth approximately £231.6m, the deal represents Flexpoint Ford’s first platform investment in the UK.

Rathbone Brothershas bought national financial planning firmSaunderson Housein a deal worth up to £150m. The deal will add £4.7bn of Assets Under Advice to Rathbones, taking total Assets Under Advice in its financial planning arm to £8.3bn. It will also boost the number of in-house Financial Planners at Rathbones from 25 to 80. 

Titan Wealthwill launch a Centralised Investment Proposition (CIPs) for Consolidators after buyingTavistock Wealthin a deal worth up to £40m. The Jersey-based Discretionary Fund Manager (DFM) added £1bn with the deal, instantly giving it scale in the market. 

Independent Wealth Planners (IWP)has acquired Guildford-based Financial Planning firmOmnium Capital Limited. The acquisition is IWP’s 24th since its formation two years ago. The deal adds approximately £250m in Assets Under Management with 750 clients.

JP Morgan Chasehas acquired loss-making digital Wealth ManagerNutmegas it looks to expand its retail digital wealth management offering. JP Morgan said the acquisition will complement the firm’s UK digital bank due to be launched under its Chase brand later this year. Nutmeg has over 140,000 clients with over £3.5bn of Assets Under Management. It claims to have been the first ‘digital Wealth Manager’ in Europe to reach £2bn in Assets Under Management.

Movers & Shakers

TheChartered Insurance Institute (CII)has appointed Aston Lark Chief ExecutivePeter Blancas President for 2022. He will work closely with current CII President, and Chief Executive of Aon UK, Julie Page, before taking over as President and Chair of the President’s forum on 1 January 2022.

Raymond Jameshas opened an office in Cheshire under the name Raymond James, Chowley. It will be run by Co-FoundersAudrey McKinstryandJohn Simpson. McKinstry was most recently a Senior Investment Director for Investec Wealth & Investment, where she spent over two decades. Simpson also joins from Investec W&I where he had worked since 2000 as an Investment Director.

The former Director of Recruitment and Acquisitions at Quilter Financial Planning (QFP),Scott Stevens, has joinedSt James’s Place (SJP)as a Commercial Director. Quilter announced Stevens was leaving the business in February. Stevens has since joined SJP as an establishment Commercial Director for the advice giant’s Adviser academy and wider business.

In further news...St James’s Place (SJP) has appointed Andy Payne to lead its academy training scheme for new recruits. Payne was previously Head of Transition in SJP’s business establishment - the department that supports Advisers setting up their own SJP Partner practice. 

LongstandingSenseOperations and Finance DirectorLeanne Williamshas stood down nine months after the Adviser network was bought by investment consortiumAdviser Services Holdings Limited (ASHL). An ASHL spokesperson told NMA that Williams stood down last month after being offered a larger role at ASHL. However, instead of accepting the promotion, Williams decided to leave the network. 

Quilterhas appointedTosin James-Odukoyaas its new Head of Inclusion and Wellbeing. James-Odukoya will be based in London and replaces Kate Richardson as Quilter’s Inclusion and Wellbeing Chief.

Tilneyhas continued a recent run of regional hires with the recruitment of Aviva Financial AdviserChris Littlefairfor its South East England planning team.

Investec Wealth & Investmenthas combined its financial planning services in a new wealth advisory business.Michelle HolgateandSarfraz Hafejihave been made Co-Heads of the new division, which will incorporate Investec Wealth & Investment’s financial planning arm as well as its recently launched wealth planning service.

Three Directors of Financial Planning and Wealth Management groupAFHhave resigned as the £232m sale of the business went through. The Directors leaving the board are ChairmanJohn Wheatleyand Non-Executive DirectorsSue LewisandMark Chambers. AFH shares have now been delisted by the London Stock Exchange as the sale has been completed.

Aviva (AV) is reducing the size of its Fund Manager team in a bid to cut costs, reports suggest. The Insurer’s Asset Management arm, Aviva Investors, is set to cut as many as 10 Fund Managers from its equities team, leaving it with 25. Among the departees is equities CIODavid Cumming, who joined the company in 2017, and Fund ManagerMikhail Zverev, who manages the company’s Global Equity Unconstrained fund alongside Jaime Ramos-Martin.

Rothschild & Cohas appointedJustine WalleyandNathan Longas Client Advisers in its Guernsey office. The duo are joining from Kleinwort Hambros’ Guernsey outfit. Walley had been Head of Private Banking since 2014, after first joining the channel islands office in 2000.

National Friendlyhas appointed interim Chief ExecutiveGraham Singletonas its permanent CEO. Singleton takes over the reins fromJonathan Long, who headed up the mutual friendly society for more than six years, but who passed away at the end of last year.

Lifesearch’sFounderTom Baigrieis to leave his role as Chief Executive after setting up the life insurance Broker 23 years ago. Baigrie will now lead Lifesearch as its Chairman, making room for new CEODebbie Kennedy, who currently heads up LV’s protection arm.

All information provided in this Market Digest has been gathered from multiple Financial Services Media sources and individual company press releases.