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Financial Services Newsletter - Friday 5th March 2021

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While many advice businesses were challenged by the 2020 pandemic, Continuum has set new business performance records. The firm’s turnover, assets under management and profit have all increased. Managing Partner Martin Brown says this is down to the way that Advisers, clients and the business worked collaboratively. "The pace at which we adapted and evolved to the new world is incredible. Advisers and clients willingly joined us on this remarkable journey. There will be no return to the traditional ways of working; the future is more exciting than ever."

Lloyds Banking Group has delayed its goal for Schroders Personal Wealth (SPW)to become a top three financial planning business to 2025. In its full year results for 2020, Lloyds said it maintains that SPW will become a top three financial planning business for assets, but this is now expected by 2025 rather than its original target of 2023. However, SPW met several other targets set last year, including launching its own Chartered Insurance Institute-backed Adviser academy in September. 

Manchester-headquartered Frenkel Topping Group has said that the firm will not be using the net proceeds from its placing to buy IFA firms. The specialist Wealth Manager raised £13m ($16.5m, €14.3m) on 22 July via a placing of 32,500,000 of new ordinary shares, which were issued at £0.40 per share. The company said the net proceeds will be used to accelerate its vision of becoming the “market leader” in providing a full service offering to clients and claimants, particularly in personal injury and clinical negligence.

The FCA was alerted to concerns regarding the compliance culture at Woodford Investment Management (WIM)less than a year after its launch, according to new reports. In 2015, a falling out between Woodford and two WIM founding partners, Chief Operating Officer Nick Hamilton and Chief Legal and Compliance Officer Gray Smith, was exposed in grim detail to the FCA during exit interviews it conducted in January 2015 following the latter pair’s departure from the business.

In further news...The FCA has launched High Court proceedings against the Directors of a collapsed advice firm for providing unsuitable Defined Benefit (DB) Pension transfer advice. An interim injunction has been secured against Paul Steel and Jacqueline Foster, the Directors of Estate Matters Financial, which went into liquidation in June 2020. The injunction, worth up  £7m, freezes the assets of the pair. 

Advice giant St. James’s Place (SJP)saw its operating profit fall by £9m and endured its lowest inflow numbers since 2016 in 2020 due to the Covid-19 pandemic. The UK’s largest advice company also confirmed plans to cut 200 jobs in line with strategic review completed last year. In annual results to 31 December 2020, SJP Chief Executive Andrew Croft said that despite the business reaching a record Assets Under Management (AUM) figure of £129bn last year, the ongoing pandemic meant its Advisers found it ‘challenging’ to attract new business.

‘The lightbulb moment for us came when we decided not to sell,’ explains Sandy Robertson, Managing Director of Acumen Financial Planning. Robertson, who says the firm is recruiting for someone to take on his role, explains that he would like Acumen to last forever and the firm is not interested in selling at any price.

The Financial Ombudsman Service (FOS)received 20 Pensions advice complaints against national advice firm LEBC between September 2019 and the end of last year. Of the cases it had resolved, 13% found against LEBC the FOS said. However, the Ombudsman could not provide a figure of how many cases were so far resolved out of the 20 it received, but suggested it was below 10. 

Barclays has targeted UK Wealth Management as a priority area of expansion as the business goes about ‘reinventing’ its consumer division following the Covid-19 crisis. The goal, revealed in the company’s annual report, offered little further context or detail, however as it revealed that group level profits had halved in 2020, strongly beating analyst expectations. The company said it would resume paying dividends of 1p per share after it reported profits of £3.1bn, well above a consensus forecast of £1.9bn. it will also return £700m via a buyback. In early trading shares were 0.9% lower at 152p.

At 21 years old, Attivo Financial Planning Paraplanner Kristian Manton is one of the youngest ever fellows of the Personal Finance Society (PFS). Reaching fellow status is no mean feat, let alone at such a young age, so how did he do it? "I got a CV together and sent it to a few advice firms,’ says Manton. ‘I was received really well. Not many school leavers go into the industry directly; I think that gave me an advantage because it differentiated me from other people."

Quilter Financial Planning (QFP)has told its Lighthouse Advisers that their retention fees will increase as the advice network continues to revamp its business model. Quilter is now having one-on-one reviews with Lighthouse Advisers, and informing them they will receive new contracts and pay higher network retention fees, and monthly rates.

A former Goldman Sachs employee has been charged with six counts of insider dealing alongside a Lawyer at a magic circle law firm Clifford Chance. Goldmans Lawyer Mohammed Zina and Clifford Chance Solicitor Suhail Zina also face three fraud charges after allegedly borrowing £95,000 from Tesco Bank, claiming the cash would be used for home improvement. Instead the money was used to fund their trades, the FCA claimed.

Swindon-based Unique Financial Planning, which is currently under the directorship of Nucleus Co-Founder Philip Martin, has launched a Wealth Management arm in a bid to attract high-net-worth clients. The launch of Unique Wealth is the result of a Merger between Unique Financial Planning and four staff members from Surrey-based advice firmBright Blue Wealth. The joining of these Advisers will increase Unique’s assets under influence to around £700m and take its total number of Advisers to 32, while the launch of Unique Wealth increases its location count to five across Dorset, Surrey, Hampshire and Wiltshire.

The government is consulting on raising the normal minimum Pension age (NMPA) from 55 to 57 in 2028. In the consultation , the government said it is appropriate for the NMPA to remain around 10 years under the state-pension age. The state-pension age is set to rise to 67 by 2028.

Investec will soon cease offering new retail structured products to Investors, with the bank attributing the decision to ‘commercial reasons’. The firm will not launch any further retail structured product plans for the UK retail market from April, issuing its last set of new plans between 15 February and 1 April.

Fidelity International CEO Anne Richards, who called out ‘lad culture’ in Asset Management at Citywire’s 2017 CEO Tapes roundtable, now says that her male counterparts are much more engaged with diversity and inclusion issues. "Bluntly, compared to what we got even three years ago, [the change] is just phenomenal," said Richards, who was CEO of M&G in 2017.

HSBC will nearly halve its office space in the coming years in one of the most radical calls on working trends in the wake of the global pandemic. Europe’s biggest bank will vacate 40 per cent of its offices in London and other cities around the world but keep its headquarters in Canary Wharf, it revealed as it reported full-year results.

In further news...HSBC Global Asset Management has handed its Equity Dividend fund to Paul Denham and Jonathan Tilley, with veteran Manager Nicholas Dowell stepping down. The change on the $37m (€31m) Luxembourg-domiciled fund, which is formally called HSBC GIF Global Equity Dividend, took place in January. Dowell remains at the firm despite the change.

National advice business Ascot Lloyd has become the latest firm to secure additional private equity funding after receiving financial backing from the Credit Group of Ares Management Corporation. Ascot Lloyd said it has secured additional investment from funds managed by private equity firm Ares, which will bolster the firm’s acquisition war chest to £100m. 

Elevation Financial Group (EFG), a specialist consolidator of Independent Financial Advisors (IFAs), is set for expansion as it prepares for an extensive acquisition programme following a funding boost. The firm, with offices in Birmingham, London and Nottingham, is set to double in size through the purchase and integration of four IFA practices as part of its M&A strategy in 2021.The acquisitions will enable EFG to meet increasing client-demand as well as simultaneously strengthening market position, overall capability and growing its client-base.

Nottingham-headquartered Wren Sterling has acquired Ilkley-based financial advisory firm White Wells Investments. The financial terms of the deal were not disclosed. White Wells has around £50m (£68m, €57m) of client Assets Under Advice. According to the terms of the deal, White Wells Principal Michael Dunn will join Wren Sterling as an employed Adviser.

UK-based Independent Financial Adviser and Asset Management business Frankel Topping has entered into two M&A deals worth £9m ($12.3m, €10.1m). It has acquired the entire issued share capital of A&M Bacon and Partners in Costs (PIC)through the purchase of PIC’s holding company as well as direct shares. The former company is a civil and commercial Litigation costs specialist, while the latter specialises in costs law and consultancy.

Truinvest has acquired NLP Financial Management and Birchwood Investment, taking the advice consolidator’s Assets Under Advice past £1bn. NLP Director Adam Katten is also an Executive Director of Birchwood, according to the FCA register. 

Tilney Smith & Williamson has acquired firm HFS Milbourne. Tilney S&W said it has purchased the Guilford-based IFA, which has approximately £450m in Assets Under Influence. HFS Milbourne has approximately 30 staff, including seven Advisers. All staff members, including joint Managing Directors Rod Milne and Colin Hayden-Cook, will join Tilney S&W’s Guildford advice arm. 

Corporate finance specialist Craven Street Capital has launched an £850m advice firm with the acquisition of two businesses. Craven Street Wealth has acquired Canterbury-based Kreston Reeves Financial Planning and London-based Christchurch Investment Management

Royal London has acquired digital advice business Wealth Wizards from life and Pensions rival LV=. LV= purchased a majority stake in Wealth Wizards in 2015, but has now sold the robo-adviser to Royal London for an undisclosed amount, pending regulatory approval.

Quilter Private Client Advisers (QPCA)is planning to restart advice firm acquisitions after stepping away from the market when the first lockdown began last March. Its Acquisitions Director suggested the move to virtual client meetings had driven up the number of Advisers looking to sell. She said some had found the lack of face-to-face meetings ‘more challenging than others’.

Consolidator Fairstone has received private equity cash from new backer TA Associates. It has also received further backing from existing private equity backer Synova, and more Acquisition funding from European Asset Manager Alcentra

Phoenix Group has acquired the Standard Life brand, with its £27bn Sipp, onshore bond and trustee investment plan businesses going the other way. Standard Life Aberdeen (SLA) planned to drop the Standard Life brand it has held since 1825. The companies have revealed the terms of the deal, which will see SLA take on a significant part of Phoenix’s business. 

Mattioli Woods has acquired Twickenham-based advice and Wealth Management firm Montagu in a deal worth £2.3m. Montagu, which was founded in 1996, has around £80m in Assets Under Advice and 150 private and corporate clients.

Former Brewin Dolphin Chief Executive David Nicol will be joining the board of “bespoke platform” firm Multrees Investor Services as a Non-Executive Director. Pending regulatory approval, Nicol will take over as Chairman effective from 1 May, when current Chair Hugh Mullan will step down.

Financial Adviser firm Succession has appointed Peter Coleman as Chief Commercial Officer. Coleman will oversee Succession Group and Succession Advisory Services where he will be responsible for all financial planning, platform and investment services.

M&G Wealth has appointed Richard Denning as CEO of its Ascentric platform. Denning, who took over as interim Chief Executive in December 2020 following the exit of Rob Regan, has now taken on the CEO role on a permanent basis, subject to regulatory approval.

Schroders has hired former Aegon Director Ed Dymott to spearhead a wealth drive in its Benchmark Capital business. Dymott joined Aegon in 2018, after spending 16 years at Fidelity, becoming the firm’s Head of Strategy before his departure.

Brown Shipley has appointed industry veterans Johnny McGrath and Dan Morris as Private Client Advisers in its Birmingham office. McGrath joins from UBS where he was a Client Adviser, while Morris joins from Smith & Williamson, where he was a Chartered Financial Planner.

Succession Wealth’s Chief Client Officer Sarah Lord has left the national IFA. Lord, who is also currently the President of the Personal Finance Society, stepped down from her position at Succession.

Gaynor Rigby will step down from her role as Equilibrium Financial Planning’s Managing Partner this summer. Rigby said she will be leaving Equilibrium this summer, as she wants to ‘pass the baton’ to other staff members so the firm can continue to grow. 

Veteran Royal London UK Equity Income Fund Manager Martin Cholwill is to retire later this year, drawing a 37-year career to a close. Cholwill, who has run the £1.7bn fund since 2005, will be replaced by his Deputy Richard Marwood.

The Embark Group has appointed ex-Alliance Trust Savings (ATS) platform Chief Sara Wilson as its new Head of Proposition. The ATS book was acquired by Embark in October 2019, and the business completed the replatforming of its £7bn ATS business earlier this month.

Arabesque Asset Management has hired Herman Bril and Ulrika Hasselgren to expand its leadership team, the firm has announced. Herman Bril, who is currently Chief Investment Officer of the United Nations Joint Staff Pension Fund, will become Chief Executive Officer of the firm in July of this year. Meanwhile, Hasselgren, who is the former Head of Sustainability and Impact at Danske Bank, will become the group’s new Head of Nordics, as well as Head of Europe for corporates and sovereigns with an immediate effect. Both will be Partners at the firm.

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