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Financial Services Newsletter - Friday 1st November 2019

01 Nov 2019

Market News

Shares in Woodford Patient Capital Trust have surged on news Schroders has been appointed to manage the stricken £686 million trust. Shares in the fund have recently traded at a 50% discount as management group Woodford Investment Management (WIM) imploded and holders priced the portfolio to reflect an expected fire sale as administrators liquidate WIM’s flagship open-ended fund, Woodford Equity Income. By 10.50am, shares had shot up by 28.5% to 39p, although the scale of the damage inflicted this year ensured they remain barely off their historic low of 33p.

Link Fund Solutions (LFS) has decided to wind up the suspended £3.1 billion Woodford Equity Income fund (WEIF) and sack Neil Woodford as its Manager. In a letter to investors, LFS said the winding up will commence on 17 January 2020, in line with European Union rules which require investors to be given three months’ notice. The fund will be divided into two parts, one comprised of listed assets (Portfolio A) and the other comprised of unlisted and highly illiquid listed assets (Portfolio B). BlackRock Advisers has been appointed to wind up the former, while PJT Partners (Park Hill), which was appointed during the fund's suspension, will continue to focus on selling down the fund's unquoted and 'certain highly illiquid' assets.

Two Asset Management veterans have teamed up to launch an investment consultancy for Financial Advisers. Fairview Investing Ltd has been formed by Gavin Haynes and Ben Yearsley, each of whom have more than two decades experience in the investment industry. Their new venture will charge a variable flat monthly fee to Advisers in exchange for helping Advisers to develop a ‘robust and auditable’ investment process.

Cheviot Asset Management Founder Michael Kerr-Dineen’s wealth boutique has reached £1 billion in assets just four months after its launch. Vermeer Partners was set up by Kerr-Dineen and former Collins Stewart CEO Simon Melling last year. The business was built on the 24 staff it poached from Quilter Cheviot, including a dozen Investment Managers that run a combined £3 billion and their support staff. The firm officially launched in June and now has 26 partners and a total headcount of 40.

National advice firm The Private Office (TPO) has bought firm John Lamb Wealth Management Limited. London-based John Lamb, which is owned and run by Paula Steele, is an 11-strong IFA. Last year the firm, which has its own discretionary fund management arm, launched its model portfolio service to other IFAs.

According to imas M&A review, the wealth management landscape is changing. They have previously written and spoken to our clients about the potential for new major alternative brands evolving in the market for personal financial planning and investments. With the £625m “merge-over” by Tilney of Smith & Williamson confirmed this month, a new brand the size of Brewin Dolphin and Rathbones is emerging with the potential to rival St James’s Place and Hargreaves Lansdown in the future. Add the joint venture between Schroders and Lloyds in the space and you have another competitor with deep reach across the country.

Further down the scale, M&A has driven consolidation and vertical integration at all levels with support from plenty of institutional capital being deployed to rationalise what still remains a hugely fragmented industry. The appetite among investors has also proven strong for new ventures in the space, as witnessed by the combined £46m raised by Moneyfarm and Netwealth this month, blazing the trail for increasing digital solutions in managing wealth for clients.Changes in regulation also continue to be a strong theme influencing transaction activity. September alone saw three transactions directly driven by Open Banking, the Competition & Markets Authority initiated legislation designed to bring more competition and innovation to financial services, but most importantly Open Banking is also driving a sea change in behaviour and revenue opportunities that will have a much more lasting impact on the industry.

Charles Stanley has appointed Red Deer to help its Wealth Managers extract 'optimum' value from research under Mifid II. The Wealth Manager, which controls £24.4 billion in assets, said the partnership with the fintech firm would enable it to 'seamlessly' integrate Mifid II compliance across its investment process and provide a deeper understanding in the value of the research it consumes.

Face-to-face advice is still preferred over robo-advice when it comes to financial planning, according to research. Data from Openwork, showed despite a surge in robo-solutions in the market consumers still prefer face-to-face advice when it comes to planning their finances.

Wealth industry assets climbed above £1 trillion for the first time earlier this year, research from benchmarker Compeer has found. Assets under management and administration at Wealth Managers and execution-only Brokers grew 2.7%, from £976 billion to £1.02 trillion in the second quarter. Wealth Managers saw their assets rise 2.8% from £777 billion to £799 billion in the period, while Broker assets remained broadly flat at £202 billion. Total industry revenues increased by 1.8% over the same period, from £1.7 billion to £1.8 billion, as Wealth Manager revenue rose from £1.61 billion to £1.64 billion.

The looming onset of winter means that it is once again time for the Wealth Manager Investment Performance Awards. The awards, which are held in association with Asset Risk Consultants, recognise the companies that have delivered the best risk-adjusted returns for their clients over three years. They cover seven categories and will be handed out at the annual event held at The Grove in Hertfordshire. 

One of the UK's largest chartered financial planning firms, Fairstone has announced a new buyout arrangement with Belfast company ASM Financial Planning Limited. Fairstone has signed up ASM to its downstream buyout (DBO) programme - a process that allows Fairstone to work with Advisers and firms typically over a four-year period to integrate them into its business before fully acquiring the firm. The deal brings more than 3,000 clients, seven Advisers and a team of nine support staff to the wider business as well as gross fee income of £1.5m and Funds Under Management of circa £250m.

The New Model Adviser® Top 100 for 2019 is an annual list of financial planning businesses they think are doing a great job for clients as well as staff and contributing to the profession as a whole. Earlier this year, they sent out a long and detailed survey to firms. Questions spanned investment to fees, training to succession planning, client education to diversity. In brief, they are scoring firms on answers, not assets. This year proved firms are doing more and working harder (or smarter) than ever. Keep your eyes peeled online for more coverage to come, including long reads on charity work and what these 100 firms think makes them so special. 

The role of the Adviser is expected to become more “meaningful” amid the emergence of automated services, according to a report. Artificial intelligence platform Rainbird said nearly three quarters (72 per cent) of financial services firms were planning to invest more in automation over the next five years. On top of this, of the 100 large UK firms polled by the firm in August, 94 per cent of financial services firms were planning to increase investment specifically in AI over the same time period.

South West-based Financial Planner, Chartered Accountant and Tax Consultant Albert Goodman has relocated its 150+ Taunton employees to larger premises. The new offices are in at Goodwood House on Blackbrook Park Avenue, in Taunton. The firm says the move was “to create a better working environment and to allow for ongoing growth and expansion”.

Financial planning and retirement savings organisation Punter Southall Aspire has acquired the employee benefits division of UK accountancy and business advisory firm BDO. The acquisition aims to strengthen Punter Southall Aspire’s employee benefits business, enabling the organisation to offer a comprehensive range of reward products around pensions and auto-enrolment consultancy, pensions governance, health, wellbeing and protection, employee engagement, total reward and flexible and voluntary benefits. The business can also offer clients an authorised master trust, The Aspire Savings Trust.

Private equity-backed pensions and benefits group Broadstone has expanded with its fourth and largest acquisition of 2019. The acquisition of BBS Consultants and Actuaries, a Bristol-based firm of workplace pensions consultants, actuaries, investment advisers and administrators is Broadstone's fourth and largest acquisition in 2019 following the purchases of Liverpool-based CS Financial Solutions, Thomson Dickson Consulting in Glasgow and the London-based 3HR Benefits Consultancy.

Market Movers and Shakers

Stephen Wright, who has been looking after clients’ investment portfolios at Rathbones for more than 30 years has agreed to join JM Finn, as has his colleague Steve Thornton, who has been at Rathbones for 27 years. Steven Sussman, CEO of JM Finn commented “We are delighted that these two stalwarts of the industry have chosen JM Finn as the firm from which they can continue to provide a top quality service to their clients and we look forward to welcoming them.”. JM Finn have also hired Marcus Holden-Craufurd as Investment Director. Mr Holden-Craufurd, who provides investment management services for a substantial number of private clients and trustees, previously spent 13 years at Rathbones.

The Chief Executive of Wealth Manager and investment provider Close Brothers Group, Preben Prebensen, is to step down as CEO after 10 years to pursue new interests. The company, which has expanded its Financial Planning and wealth management arm in recent years, said that Mr Prebensen had “decided that the time has come to step down as Chief Executive and move on to the next stage of his career.”.

Brooks Macdonald's Leamington Spa boss has joined Tilney's Birmingham arm as an Investment Management Director. Mike Divers spent 10 years at Brooks where he latterly headed the Midlands office. He previously worked at Shore Capital and spent six years Barclays' stockbroking division. They have also made three senior appointments to its Leeds branch, as the firm lays the foundations for a regional growth drive. The trio of Rachel Bannister, Rachael Marsden and Richard Lindop join as Investment Directors at the office.

The Birmingham office of Smith & Williamson has welcomed 10 new joiners over the last few months to their corporate tax, transaction services, assurance and business services, private client and investment management teams. Stephen Drew, Professional Services Managing Partner for Birmingham said: “It’s a really exciting time for the firm as we embark on our ambitious growth phase. Birmingham professional services alone has grown by over 25% in the last six months and we are continuing to heavily invest in our people in response to our growing number of clients.".

St James's Place's (SJP) Chief Operating Officer Jonathan McMahon is leaving the business after six years. McMahon, who held the senior post at SJP from 2014 to the end of last month, is leaving SJP for personal reasons, a spokesman for the firm said in a statement.

The CISI has appointed Niall Husbands MCSI as President of its Jersey committee. Mr Husbands takes over from Ed Loader of Integritas Wealth who held the position for the previous two years. He is a Director at Ogier Global and was described as “an internationally experienced wealth management practitioner”.

Seven Investment Management (7IM) has hired five to bolster its private client proposition, including a wealth manager from HSBC. Ines Uwiteto joins the firm as a Private Client Manager from HSBC Global Asset Management (GAM), where she looked after high net worth clients as a senior discretionary investment specialist. The firm also hired Private Client Executives Joshua Bell and Andrew Ker, new Head of Private Client Business Delivery Zane Hunter as well as Chartered Financial Planner Daniel Wood last month.

Nutmeg’s Chief Investment Officer Shaun Port has left the digital Wealth Manager. Port joined Nutmeg in 2012 and played an instrumental role designing its investment proposition: a complex array of ETF portfolios. In March Port was one of six Directors to leave the board, less than one year after being appointed to it.

Succession Wealth has added six Directors to its leadership team as it sets its sights on £10bn in assets. Former Mazars Partner Sarah Lord joins as Director of Client Strategy. Mark Day joins from EY and will lead all major acquisitions helping the group reach its target of £10bn-plus in assets under advice. Once businesses have been acquired, Irena Barker will oversee their integration into Succession Wealth in her role as Director of Integration. Succession Wealth also confirmed Tony Bullock has joined as Regulatory Compliance Director.  He was most recently head of risk & compliance at Chase De Vere IFA Group. Steve Willis has been appointed Group Finance Director while Adrian Webb becomes Group General Counsel and Company Secretary.

Brown Shipley has hired Coutts' Shanti Keleman to take up a newly created role within its investment office. Keleman, who spent seven years at Coutts most recently as Portfolio and Director, joins Brown Shipley as Investment Director.

Boutique Investment Manager McInroy and Woods Portfolios has appointed Jonathan Jesty as an Independent Director following a restructure of its board. Jesty, who has over thirty years’ experience, joins the board after five Executives agreed to step down, as the firm sought to align itself with Financial Conduct Authority (FCA) governance recommendations made in the 2017 Asset Management Market study.

Jim Collier has stepped down as the south west regional office Managing Director at 1825 to take “early retirement” and has been replaced by Alan Loomes, Money Marketing understands. Collier was Managing Director of Fraser Heath Financial Management, which became part of Standard Life’s 1825 financial planning arm in March 2018.

The Embark Group (‘Embark’) announces the appointment of Lawrence Churchill CBE as its newest member of the company’s Board of Directors, effective 1st November. The Group is experiencing rapid growth in its pensions business and Mr Churchill’s appointment adds material strength to the Group’s Board as a Non-Executive Director with proven plc experience and his deep understanding of the retirement sector.

The Chief Executive Officer of Axa Investment Managers, Andrea Rossi, is to step down after six years in the role amid a wider change in the Asset Manager’s leadership structure. The French group announced that Rossi will move into an advisory role, which will see him work alongside Gérald Harlin, who will become Executive Chairman on 1 December. Harlin, who is group Deputy CEO and group CFO, will assume the role and implement the next stage of Axa IM’s growth strategy. In doing so, all members of Axa IM’s management board will report to him.

Seneca Investment Managers (SIM) Chief Investment Officer Peter Elston is leaving the business at the end of the year. A statement from the board of the Seneca Global Income & Growth Trust (SIGT) confirmed the departure, saying Elston has resigned for 'personal reasons'.

Investec Asset Management has appointed Lucia Pino-Garcia as Chief Technology Officer, in an effort to boost the firm’s technology platform. Pino-Garcia joins from six years at JP Morgan Asset Management where she was most recently Global Head of Fixed Income and Liquidity Technology. Before JP Morgan, Pino-Garcia worked for 13 years at Bank of America Merrill Lynch.

A Hagreaves Lansdown veteran of 18 years has left for Brewin Dolphin. James Shattock, who spent 18 years in Hargreaves advisory services division, joins Brewin's Bristol arm. His CV also includes spells at Sedgwick (now Barclays Wealth) and Friends Provident.

Schroders has appointed a new full time Chief Executive for its joint financial advice venture with Lloyds to replace James Rainbow. Peter Hethertington, the former Chief Executive of online trading platform IG, will succeed Rainbow as Chief Executive of Schroders Personal Wealth.

Yorkshire wealth manager and financial planner G+E Wealth Management has hired two high net worth Advisers from Lloyds Private Banking. Richard Lord and Jonathan Noake, who specialise in clients with at least £1 million in liquid assets, will join the company’s high net worth team as Directors.


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

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