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Financial Services Newsletter - Friday 9th April 2021

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Financial Services News

IDEX Consulting's very own Financial Services Managing Director, Tony Bates, has argued IFAs have to engage more than ever with the recruitment process to ensure a good result for their firms. The number of open roles is up, and yet 67% of hiring managers tell me that they are facing recruitment challenges. That means it has never been more important to have a recruitment strategy. Read the full articlehere.

The Court of Appeal has found against Carey Pension sin its case against claimant Russell Adams, overturning a previous landmark High Court ruling. The outcome centres on the question of who should be held liable for investments accepted into a Sipp and could have a significant impact on the rest of the Pension market.

Seven Investment Management (7IM)has suspended two funds on liquidity concerns, with both heavily invested in a debt fund that has been closed to dealing since July 2019. In a letter to shareholders dated 17 March, the group said the £33m 7IM Absolute Return and the £20m 7IM Income Portfolio funds had been suspended over material exposures to illiquid holdings that cannot currently be sold.

The FCA has published a decision notice banning an Adviser who changed his name after he was convicted of attempting to sexually groom a child. The Adviser has now appealed the decision and a final decision on the case will be made by the Upper Tribunal.

Cardiff-based IFA Bartholomew Hawkins Ltd, a business that advised members of the British Steel Pension Scheme (BSPS), has been declared in default by the Financial Services Compensation Scheme (FSCS). Two other firms that advised BSPS members, Ashby-de-la-Zouch-based Mansion Park and Newcastle-based Estate Matters(trading as Pension Matters) were also declared in default last week.

In further news...Consolidator Independent Wealth Planners (IWP)has obtained an injunction against collapsed IFA Bartholomew Hawkins Limited after the firm tried to deny it access to clients records. In June 2019, Bartholomew Hawkins Limited sold its trade and assets to sister firm Bartholomew Hawkins Asset Management (BHAM). BHAM was then acquired by IWP while Bartholomew Hawkins Limited was not.

Pension provider PensionBee has published its intention to float on the ‘high growth’ segment of the London Stock Exchange (LSE). The company, which offers consumers with defined contribution pensions the opportunity to consolidate their small pots and switch into a new proprietary Pension offering online, was founded in 2014 by CEO Romi Savova, and Chief Technology Officer Jonathan Lister Parsons.

Hargreaves Lansdown faces legal action for promoting the failed Woodford Equity Fund before its collapse. Litigation specialist RGL Management has formally launched proceedings against Hargreaves, claiming it failed to provide ‘accurate, adequate and up-to-date information’ about the fund before its suspension. 

One IFA has been ordered to pay client redress and another two have dropped their Defined Benefit (DB) Transfer permissions after the FCA’s probe into Rolls-Royce DB Pension advice. In response to a freedom of information (FOI) request made by NMA, the FCA said that after reviewing files from 65 firms that had advised Rolls-Royce Pension scheme members, it had ordered one firm to pay client redress after unsuitable advice had been given. Two further advice firms voluntarily varied their DB permissions.

Aegon’s institutional arm is facing the potential loss of £10bn of assets after AJ Bell picked Clearstream for its fund processing work. AJ Bell was previously using Aegon as the primary custodian for its Youinvest platform. However last year the Manchester-headquartered platform announced it had appointed European trading infrastructure firm Clearstream as the ‘primary custodian for funds custody, settlement and order routing for its Youinvest, Investcentre and Custody Solutions products’, a press statement last June said.

Comedian, Author and Mental Health Campaigner Ruby Wax will be the guest speaker at the third annual Initiative for Financial Wellbeing (IFW)conference this Summer. Taking place online between 26 and 27 May, the conference carries the strapline ‘Making happiness pay’ and aims to help Financial Services workers incorporate financial wellbeing into their work.

Quilter’s profits fell 8% last year due to the Covid-19 pandemic, and the firm said potential redress for Lighthouse’s British Steel Pension advice could hit £36m. In its full-year results for 2020, published today, Quilter recorded a profit before tax of £168m, a 7.6% drop from 2019’s profit of £182m.

The biggest news to hit the investment world last months was Neil Woodford’s revelation that he plans to return to investment management with a new fund, less than 16 months after his previous firm collapsed in a spectacular fall from grace. The disgraced Manager has reunited with right-hand man Craig Newman to set up Woodford Capital Management Partners, which will partner with US-based Acacia Research, to launch a Jersey-based biotechnology fund.

Saunderson House’s annual accounts revealed it made 25 staff redundant after the pandemic presented several challenges for the business.

Mergers & Acquisitions

Quilter is to sell its offshore business to Life Assurance group Utmost for around £483m, following a long-running overhaul that started in late 2020. The sale of Quilter International will simplify Quilter’s structure and help it put the focus on its ‘higher growth’ UK wealth management arm, the company said.

James Hay’s proposed acquisition of Nucleus has been switched from ‘scheme of arrangement’ to a takeover to remove uncertainty created by some shareholder dissent to the deal. Nucleus’s shareholders were due to vote on the proposed James Hay acquisition at the general meeting, however following this latest announcement the meeting has now been cancelled.

In further news...James Hay has sold its closed small self-administered scheme (SSAS) book to Leicester-based Tax and Pensions firm Westbridge. In December 2015, James Hay put its SSAS book up for review. The Pension arm was then soft closed, and took on its last scheme in 2018.

National advice business Tavistock has rejected a £15m bid from Jersey-based fund management business Team. Regulatory filings published this morning show Team approached Tavistock on 11 March with a confidential offer for the business worth approximately £15.2m. Team offered Tavistock an equivalent price of 2.5p per share, which the Fund Manager said represented a 28% premium to Tavistock’s closing price on 10 March. 

AJ Bell has bought young platform business Adalpha in a move to improve its mobile offering. The deal, which is for an undisclosed fee, will see AJ Bell run its existing Investcentre Adviser platform business alongside Adalpha. Founded by former Parmenion Chief Operating Officer David Tanner in 2018, Adalpha has not yet launched its full platform, but has promised a wide range of key features all available on a mobile app. 

Paradigm Norton has restarted acquisitions, buying two chartered advice firms in London and Exeter. The deals, for Richmond-based Tower Hill Associates and Exeter-based Clover Wealth Management, are the first the business has completed since its purchase of London-based Red House Consulting in January 2018.

Last June, Quilter Financial Planning CEO Steve Gazard took over from Andy Thompson, Gazard wasted no time opting for the latter strategy. Under Thompson’s reign between 2016 and mid-2020, Quilter Financial Planning grew considerably. A string of acquisitions, including a £32m deal for Charles Derby and the £46m acquisition of Lighthouse, took Quilter’s UK Adviser numbers to more than 3,900. Events have since proved that Quilter’s due diligence on Lighthouse was, in Quilter CEO Paul Feeney’s own words, a ‘failing’.

M&G has invested $50m into Vaccitech, the unquoted start-up behind the Covid-19 vaccine developed by the University of Oxford and AstraZeneca. The investment was made by M&G’s newly established Catalyst team a month after it announced it would allocate £5bn of the £143bn Prudential With-Profits fund to ‘privately owned innovative enterprises’. The Asset Manager led a $168m (£121m) funding round, with other backers also including Chinese giant Tencent, Gilead Sciences, Monaco Constitutional Reserve fund, and Future Planet Capital. 

In further news...M&G paid £86m for the acquisition of platform Ascentric from Royal London, the business has revealed. According to M&G’s full-year results for 2020, the business paid £86m in cash consideration for the acquisition of Ascentric, which included a £49m loan repayment to Royal London.

The exodus of IFAs from the Defined Benefit (DB) transfer has continued, with the numbers giving up their permissions up 65% in 2020. The latest batch of 259 advice firms leaving the market, means the total number of firms who stopped offering DB transfer advice in 2020 was 928, representing a 65% increase on the previous year.

Tilney Smith & Williamson is lining up another acquisition in the form of Punter Southall’s wealth management business. Tilney Smith & Williamson announced the purchase of firm HFS Milbourne. The deal was its first purchase since the mega-merger between Tilney and Smith & Williamson in 2019, and finally completed in September last year.

Movers & Shakers

EQ Investors Founder John Spiers is retiring as Chief Executive six years after he launched the firm, passing the reins on to younger colleagues. The CEO position will be split into three and shared between Head of Investment Sophie Kennedy, Executive Director for Advice and Wealth Management, Mark Howlett, and Head of Technology and Operations Nath Papadacis.

James Anderson will leave Baillie Gifford next year after nearly four decades with the business. The Fund Manager will step down from the £16bn Scottish Mortgage Trust (SMT) investment trust on 30 April 2022.

Tilney Smith &Williamson has appointed Henk van de Beek from Mattioli Woods, where he spent more than three years as a Wealth Management Consultant.Mayank Prakash has been appointed as its Chief Operations Officer effective from 1 April. He takes on the role fromDonald Reidwho is retiring at the end of May after nearly 11 years with the business. Reid will take-on a part-time advisory role following his retirement. Also, the firm has hired Financial PlannerPaul Barker.

Helena Morrissey is leaving St James’s Place (SJP) after just 14 months on the advice giant’s board. Morrissey, who became a Non-Executive Director of SJP last January, is joiningAJ Belland will become the platform’s Chair in January 2022 – subject to shareholder and regulatory approval.

Richard Skerritt said he has hired the ‘Alex Ferguson of the IFA sector’, as ex-Towry CEO Andrew Fisher joins his firm following its Private Equity takeover. Skerritt, whose Hove-based IFA and discretionary Fund ManagerSkerritts Consultants, announced that his firm had been taken over by Private Equity House Sovereign Capital Partners.

Alena Kosavahas joinedAvellemyas Head of Collectives after exiting Tilney Smith & Williamson (TS&W). Kosava was Director of Equity and Alternative Fund Research at TS&W, and joined Tilney in 2014 before its Merger with Smith & Williamson.

Frédéric de Courtois will join the insurance giant,A xa, on 1 August as Deputy Chief Executive. George Stansfield, will become Deputy Chief Executive and Group General Secretary. Etienne Bouas-Laurent, Group Chief Financial Officer, will become Chief Executive of Axa Belgium. He will replace Jef Van In who will take over a role to be announced shortly. Alban de Mailly Nesle, Group Chief Risk and Investment Officer, will become Group Chief Financial Officer while continuing to lead group investments. The group has also named Axa France Chief Executive, Jacques de Peretti, as a Senior Adviser to the Group Chief Executive. Patrick Cohen, Chief Executive of Axa Italy, will be appointed Chief Executive of Axa France. Also, Benoît Claveranne, Chief Executive of Axa International and New Markets (INM), has decided to pursue new opportunities outside of the group.

Oak Group has appointed Graham McCormack as Chief Executive.

Shared Capital has expanded its UK Tier 1 (Investor) Visa team with the appointment of Jacky Ng to the newly created role of Chief Investment Officer for its existing investment committee.

David Foster has been named Group Head of Private Wealth for Equiom.

The UK savings and retirement business, Pheonix Group, has named Wendy Cunningham as HR Chief Operating Officer.

The life arm of Quilter has named Cheryl Gleeson as Head of International Marketing.

The international advice firm, AHR Private Wealth, has hired Sammy Barrett to both develop and lead its Property division.

Sandringham Financial Planners has appointed Richard Framp has joined the advice firm as an Advising Partner.

The Cheshire-based IFA firm, Equilibrium Financial Planning, has appointed Rachel Griffiths as Head of Marketing.

Blackfinch Group has named Paul Lanigan as Distribution Strategy Director. 

Deputy Head of multi-asset, Liontrust, Sheldon MacDonald and Senior Investment Manager Nathan Sweeney are both leaving the firm, just four months after joining through the acquisition of Architas.

Hawksmoor Investment Management is set to open a new office in Bath, naming former professional Cricketer Dean Hodgson as Senior Investment Manager. Hodgson spent eight years at Gloucestershire County Cricket Club between 1988 and 1995 and joins from Investec alongside his colleagues Mike Topham and Sally Overton.

Investec Wealth & Investment (IWI)made three senior appointments following the departure of the Head of its London office, Louise Hall. Nicola Toyer has been appointed as Head of Charities, a role previously held by Hall, while Alex Charalambous has been made Director of Private Clients for the southern region. In addition, Stewart Teague has been promoted to Head of Commercial Transformation and Product Development. 

Brooks Macdonald has named a new Head of AIM as the architect of the firm’s portfolios, Scott Lothian, will leaving the Wealth Manager after 11 years at the end of May. He will be replaced by Ewan Millar, who joined Brooks in July from Cornelian, after the firm was acquired by Brooks. 

The Financial Conduct Authority announced a series of major appointments it is due to make in a shake up its of executive team. BlackRock veteran Stephanie Cohen will take over as Chief Operating Officer, having previously spent 14 years at the world’s largest Asset Manager as Global COO for the active Equity businesses. Chetwood Financial’s Chief Data Officer Jessica Rusu will join the regulator in the same role, making the first ever time the FCA has appointed a data boss. Sarah Pritchard, currently Director at the National Economic Crime Centre, will become the watchdog’s Executive Director for markets, while Aegon customer services Director Emily Shepperd will take up the newly-created role of Executive Director for Authorisations. The FCA has also appointed Clare Cole as Director of Market Oversight.

LGT Vestra made a fresh raft of promotions, lifting the total number of Partners in the wealth firm to 70. Among the 11 appointments were head of Private Equity Jordan Buck, Head of IT and Business Solutions Simon Boyley and Head of risk Helen Whelan.

Brewin Dolphin appointed Johnny McGlynn as its new Edinburgh office Head, replacing Marc Wilkinson who becomes Regional Managing Director for Scotland.

Brown Shipley appointed industry veterans Johnny McGrath and Dan Morris as Private Client Advisers in its Birmingham office. 

Former Chancellor of the Exchequer George Osborne relinquished his role at BlackRock to take up a partnership post with M&A specialist Robey Warshaw.

Rathbones strengthened its collectives and fixed income research capabilities with two new analyst hires. Saif Sajid joined the collectives team from StatProGroup, where he was Financial Client Service Analyst. He previously worked for Greystone Wealth Management as a Multi-Asset Research Analyst. Joe Young, who was most recently an Investment Analyst for two years on Rathbones’ development team, also transferred to the collectives team.

Close Brothers Asset Management continued a hiring spree at its Mayfair office with the appointment of a new Investment Director. John Sawbridge, who specialises in UK Equities and Equity Derivatives, joins the firm from asset management consultancy RX Partners, where he spent two years. Sawbridge previously worked for 12 years at Investec, working his way up to Investment Director, in which role he worked for four years. 

Waverton hired Paris Jordan as an analyst in its multi-asset team. 

Robo Adviser Wealthify announced the appointment of David Semmens as its new Chief Investment Officer (CIO), after holding the role on an interim basis since June. 

Francis Brooke is to step down as Manager of Troy Asset Management’s Income fund and Income & Growth Trust, with Co-Manager Blake Hutchins taking lead control of the former.  

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