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Financial Services Newsletter - Friday 7th June 2019

06 Jun 2019

Market News

AFH Financial pre-tax profits rose 85% to nearly £6 million as assets under management have swollen by 68% to £5.4 billion, according to its half year figures. For the six months to April 2019 revenues rose from £22.7 million to £36 million year-on-year. During the period AFH completed four acquisitions that added £640 million assets under management. The deals were made for an initial consideration of £7.9 million plus £11.8 million of ‘future deferred consideration’ payable over the next two financial years if the acquired businesses achieve of financial targets.

‘We do not think we make enough recoveries under PI policies,’ FSCS Chief Corporate Affairs Officer Alex Kuczynski, said in January. The case of Active Wealth (UK) is particularly important because it was the firm at the heart of problems around advice given to British Steel Pension Scheme members. But if no compensation was paid out in this case, when do PI insurers pay out? Inspecting company filings unearthed another intriguing fact. When Active Wealth (UK) collapsed, a PI insurer, Hiscox, was listed by the liquidator as a creditor, to the tune of £500,000 for ‘potential PI insurance excess payments’. It is important to state Hiscox has denied it was a creditor in the collapse. Hiscox was the PI insurer for Active Wealth (UK) between September 2017 and January 2018, when the advice firm collapsed.  However, no claims were made in this period so Hiscox has not needed to pay out.

Hertfordshire-based IFA Lumin Wealth Management made its first acquisition this year with the help of platform Ascentric. The Royal London-owned platform set up an initial meeting between Directors of Lumin Wealth Management and Luton-based Hyperion Financial Planning. Directors of Hyperion approached Ascentric when they decided to sell on the condition that firm buying used the same platform.

A new wealth management network targeted towards bringing women together across the sector has joined forces with a leading national law firm, to help drive change in the professional services industry’s attitude to women and their wealth. Irwin Mitchell was named the exclusive legal partner for wealth management network WealthiHer, founded by Cherry London, joining sponsors such as Brewin Dolphin and Investec. This comes as the network released its inaugural WealthiHer report earlier this month, which examines the diversity of women’s wealth, the way women invest, what they invest in and how they manage their wealth. The report indicates that for women, wealth means providing security and comfort for their families.

National advice firm Foster Denovo has bought part of London & Capital’s UK Wealth business.The acquisition will see two Advisers move from London & Capital to Foster Denovo, but neither company confirmed how many assets under advice are involved in the deal. A spokesperson for London & Capital stated that no partners or further staff off the company will make the move across to Foster Denovo or be involved with any of their inner-workings. Foster Denovo stated that there will not be any immediate changes to client portfolios or charging structures. However it added the in the long term clients will move to Foster Denovo's financial planning proposition.

A Norwich-based advice firm has entered administration after seven Advisers left amid a payment dispute with its Managing Director. Two employed and five self-employed Advisers left Nurture Financial Planning in February. The Advisers left the firm following disputes over payments, with some claiming they were not paid at all during the months leading up to February. The firm’s Managing Director Simon Linstead said no employed member of staff was paid late. Linstead said any late payments to self-employed staff were due to the person responsible for paying them going on maternity leave. He also said some Advisers had not completed their annual client reviews.

Wrap platform Novia has seen a 72% jump in profits driven by a rise in assets under management despite 'difficult trading conditions'. For the year ending 31 December 2018, Novia recorded operating profits of £5.6 million, a rise of 72.5% from the previous year. The platform’s Chief Executive Bill Vasilieff said the rise in profits reflected better efficiencies as well as stronger business flows. For 2018, Novia’s assets under management grew by 5% to £6.1 billion, driven by new business sales of £1.3 billion, which were up 3.2%.

A firm run by brothers jailed for a £17 million investment fraud has been declared in default by the Financial Services Compensation Scheme (FSCS). The FSCS regularly publishes a list of firms it has declared in default, meaning they are unable to pay out on claims made against them. A number of IFA firms are included in the most recent list, as well as a business called Vantage Investment Group. Vantage was owned by two Norwich-based brothers who also ran an IFA firm Taylor and Taylor Associates. Around £17 million from 239 clients was invested without their knowledge through Taylor and Taylor Associates into the unregulated Vantage Investment Group fund, of which the brothers were the directors and shareholders, between 2008 and 2015.

Perspective Financial Group has acquired South London-based Thornton Springer Financial Services, creating a new London outpost for the firm. Marking Perspective’s third acquisition this year, this expansion gives it a hub in the capital for the first time and expands its network to 15 offices across the UK, including Eastbourne, Marlborough, Chester and Newcastle upon Tyne. The new firm will be renamed Perspective (Thornton Springer). Thornton Springer, which has been established for over 25 years, was originally part of an accountancy firm of the same name (a separate entity since 2006 and not included in this deal) and gained chartered status in 2011. Ian Wilkinson, Group Managing Director of Perspective, said: 'Establishing our first hub in London is a significant step and we are pleased to have a firm of the calibre of Thornton Springer joining the group.'

AJ Bell Chief Executive Andy Bell has shot up the rankings in the Sunday Times’s annual Rich List, following the floatation of the platform and pension business last year. Bell’s net worth has been put at £360 million by the list, a dramatic increase from £175 million in 2018. It has seen him jump from 675th place to 367th. AJ Bell, which he founded in 1995, floated in December with a value of £651 million. The company is now valued at £1.18 billion and Bell owns a stake worth £295 million having sold a £20 million stake at the time of the IPO.

Brewin Dolphin's deal to buy Bath-based advice firm Epoch Wealth Management will be worth up to £19 million. The discretionary fund manager revealed it had bought the firm last week, but did not disclose how much the deal was worth at the time. However, in half-year results published recently, Brewin Dolphin said it paid an initial consideration of £10 million to buy Epoch. A further £9 million could be paid in the future depending on performance targets being met. The acquisition of Epoch added £500 million to Brewin's financial advice business and gave it a new head office in Bath. Following the completion of the deal, Epoch Wealth Managing Director Barry Newbury will become head of Brewin's Bath office. Brewin Dolphin also revealed its deal to buy Basingstoke-based advice firm Aylwin, which was announced in December and completed in March, was worth £4.3 million.

The Personal Finance Society (PFS) last month celebrated the graduation of 544 Financial Planners into some of the most prestigious qualifications on offer.

National advice firm Fairstone has acquired IFA firm Brett & Randall Financial Services. This acquisition comes after Fairstone previously signed the firm to its downstream buyout (DBO) programme. It marks Fairstone Group’s second DBO purchase this year after Pension and Wealth Management Services Ltd, based in Harpenden and Burscough, also signed in February. Collectively, Fairstone believes these two acquisitions will bring upwards of 18 advice and support staff as well as approximately £1.8 million in revenue.

National advice firm Ascot Lloyd has launched fivemulti-asset and multi-manager funds as it looks to build in-house fund capabilities. The five risk-targeted funds have been launched with Ascot Lloyd’s discretionary fund manager (DFM) Avellemy. The new fund range mirrors Avellemy’s current managed portfolio service (MPS) and discretionary fund management service. The Ascot Lloyd sister company has £600 million of assets under management.

Tatton Asset Management has announced two deals to manage money for advice network Tenet Group and national IFA Frenkel Topping. Frenkel Topping has appointed fellow AIM-listed business Tatton to manage its £320 million discretionary fund manager (DFM) proposition, Ascencia Investment Management. Frenkel's DFM business already partners with Wellian Investments and Brooks Macdonald and Tatton will be managing the core and passive products. Tatton has also been appointed by advice network Tenet Group to lead a new managed portfolio service (MPS).Tenet’s MPS replaces the ‘centrally supported advisory model portfolios’ it has been using.

Market Movers and Shakers

Rowan Dartington
has hired former Quilter compliance boss Mark Leather as Chief Risk Officer. Leather, who most recently held the same role at tech services business Wipro, previously spent over seven years as the Group Compliance Director at Quilter Plc. The board level appointment replaces previous holder Clare Holt, who was appointed Group Risk Director of parent group St. James’s Place at the beginning of this year.

Close Brothers has again tapped Rathbones for another senior Scottish hire, with Christopher Godfrey-Faussett joining the business as a Managing Director. Godfrey-Faussett was formerly Rathbones' Head of Charities in Scotland. He will join Close's Edinburgh-based high net worth investment team to support continued expansion in the country. He joined Rathbones as an Investment Director at its London office in 2001 before moving to Edinburgh in 2005. The appointment is the latest in a series of Close hires from Rathbones in Edinburgh, following those of Andrew Mackintosh-Walker and John Henderson in October.

Brown Shipley
, experts in wealth planning, investment management and lending, is pleased to announce the appointment of Sandra Dailidyte as Client Senior Manager in its Edinburgh office. In her new role, Sandra will be responsible for the management of clients’ investments as well as providing broader wealth management advice to new and existing clients in Scotland. Sandra joins following four years at TCAM Asset Management/Seven Investment Management where she was responsible for managing discretionary portfolios for around 100 families with a combined wealth of approximately £70 million. Prior to this, Sandra spent several years at Standard Aberdeen as a Proposition Development Analyst.

Continuum (Financial Services) LLP has boosted its presence in the North West with the recruitment of experienced IFA Gary Charlesworth in Cumbria. The company says the recruitment of Mr Charlesworth underlines the growth of the business since Continuum left the Caerus network and became directly authorised in November last year. In January DFM Marlborough Group Holdings took a 19.99% stake in the Continuum Business for an undisclosed sum. Mr Charlesworth said: “Continuum has a deep understanding of an Adviser’s needs and their track record of delivering exceptional Adviser support is impressive.”

Deutsche Wealth has continued its push into the UK, hiring Coutts' discretionary boss Alistair Jex. Jex joins as Head of Discretionary Portfolio Management after more than 20 years at Coutts, rising to Head of Discretionary and Director. He is the latest Coutts veteran to be poached by the bank since former Wealth Manager coverstar Michael Morley joined in 2017 as Head of UK Wealth. It had previously hired business development boss Matthew Spencer as UK Head of Intermediaries and Multi-family offices a year ago.

Tilney has upped the headcount in its Mayfair office with the hire of Rathbones investment adviser Victoria Newlands. Newlands spent the past four and a half years at Rathbones Winchester office, most recently as an Assistant Investment Manager. In her new role she will advise Tilney clients on multi-asset investments. Tilney's Head of Investment Advisory Sam Coppin said: 'We have seen strong growth in assets into our investment advisory in service in recent years.

Derek Pitt has joined ReAssure as the Data Protection Officer supporting Angela Harris the Head of Compliance.

London-based firm Helm Godfrey has hired Sustainable Investment Specialist John Ditchfield as it plans to expand its ethical offering for clients. Ditchfield will head up Helm Godfrey’s responsible investment and wealth management arm. The firm currently has around £45 million of assets under advice in ethical or sustainable mandates. Before his latest move Ditchfield was a Partner at Castlefield, one of the largest specialist ethical advice businesses in the UK. He is also Co-Chairman of the UK's Ethical Investment Association and sits on the admissions panel for the Social Stock Exchange, a public exchange dedicated to listing businesses with defined social and environmental objectives.

Quilter Cheviot has hired two senior back office staffers among three recruits from Brooks Macdonald, including Helen Brien, who had served as Head of Investment Management support for more than a decade. Brien joins in the new role of Head of Middle Office and will head the development of ‘more efficient working practices and processes’. She joins alongside Jennifer Ines, who has been hired as Investment Manager in its Edinburgh office and Monica Bungar who joins as Telephone Account Manager, working alongside the regional development team to develop new adviser links.

St James’s Place has fired Neil Woodford as Manager of £3.5 billion in segregated client assets following the suspension of dealing in his flagship Equity Income fund. SJP Chief Investment Officer Chris Ralph said that the group was closely monitoring the Manager's performance on the funds amid withdrawals from investors. In a statement, the company said: 'While the St James's Place funds managed by Woodford Investment Management were separate mandates and not part of the Equity Income fund suspended earlier this week, the St James's Place Investment Committee believes these changes will ensure its clients' investments continue to be managed effectively.

Catriona Livingstone has joined Investec Wealth & Investments in Edinburgh as an Associate Investment Director. Prior to this she spent 8.5 years with Tcam Asset Management where she managed investments for a wide variety of clients including individuals, trusts and charities.



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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