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Financial Services Newsletter - Thursday 7th June 2018

07 Jun 2018

Market News

Adviser back-office provider Intelliflo has been bought by Invesco in a deal that is reported to be worth £200m. The firm behind the popular Intelligent Office software system, used by around a third of UK advisers, has been backed by private equity company HgCapital since 2013, and since then has been investing in integration projects with robo-advisers and digital investment services like Moneyhub.

Seven Investment Management (7IM) has acquired Edinburgh-based Discretionary Asset Manager Tcam. The deal, subject to Financial Conduct Authority approval, will see the merged firm have £13.6bn assets under management (AUM), with offices in London, Edinburgh and Jersey. Joint Tcam Chief Executives Alex Montgomery and Haig Bathgate will become partners in 7IM, and join its management committee. Several of Tcam’s senior team members will also become partners in 7IM. 7IM said the Tcam brand will continue ‘in the near term’, with the combined entity to operate wholly under the 7IM brand by the end of 2018.

In further news, Grant Hamilton, the Head of Seven Investment Management’s (7IM) newly opened Jersey branch, believes that tapping into the island’s trust market is the key to the fledgling office’s success. While the company already had a client base in Jersey, it has only recently set up the dedicated office, hiring Hamilton from Rathbones. He says the trust companies are the main target for the branch, as it already has an established IFA client base already using its investment offering.

Dolfin has formed a strategic partnership with Alexander House Financial Services, one of the fastest-growing national, chartered IFAs in the UK. As part of the agreement, Dolfin have acquired a significant equity stake in Alexander House, which is an appointed representative of the UK’s largest distributor of financial advice, Intrinsic.

Losses in St James's Place (SJP)advice arm have continued with the restricted advice giant posting a loss of £35.4m for 2017, 42% greater than the £24.8m recorded the previous year. The firm's advice arm losses have come under fire previously, raising questions about its viability as a standalone business and the possibility of cross-subsidy. SJP asserts that its advice arm will eventually become profitable after an indeterminate period of long-term investment. 

Munnypot, the robo-adviser set up by former Close Brothers wealth boss Andrew Fay, has signed a white labelling deal with Denmark's Jyske Bank. Jyske, the third largest bank in Denmark,will launch Jyske Munnypot into its domestic market in the first half of this year. Munnypot was launched by Fay and Simon Redgrove - also previously at Close Brothers, where he was head of advice - in 2016.

Two former Hargreave Hale Investment Managers are transforming a firm solely focused on tax efficient wrappers by launching a managed portfolio service (MPS). Alex Sumner and Gareth Deacon, who joined boutique Blackfinch Investments earlier this year, expect that the MPS will go live in the next six weeks. It will feature five actively managed portfolios ranging from risk levels three to seven. There will also be three passive strategies and additional income mandates are planned for launch shortly after.

Phoenix could hand a £7bn asset pot to Aberdeen Standard Investments (ASI) after putting a number of investment mandates under review. The news was revealed in a circular sent to shareholders, outlining the sale of Standard Life Aberdeen's insurance business to Phoenix. As part of the deal, ASI parent Standard Life Aberdeen (SLA) has formed a strategic partnership with Phoenix. While the potential transfer of the mandates to ASI will be no major surprise, it is the first time a figure on the sum involved has been revealed.    

Toscafund Asset Management has bought a minority stake in wealth boutique Plurimi. The position will be held as the maiden investment of the company’s recently-launched Tosca Private Investments Fund, which targets small and mid-cap opportunities in the European financial services sector. The fund bought a ‘significant’ minority stake in the business for an undisclosed sum.

Old Mutual has confirmed its plan to offer up to 9.6% of shares in Quilter as part of its managed separation. The news comes after shareholders voted last week in favour of both the demerger of Quilter from Old Mutual plc and for its listing. Applications will be made to list on both the London Stock Exchange and Johannesburg Stock Exchange. The final offer price and number of shares to be sold will be determined following the publication of the Price Range Supplement, currently expected to be announced on 25 June.

Old Mutual Wealth Private Client Advisers (OMWPCA) has acquired Scottish independent financial adviser DG Pryde, adding £200m of assets under management. DG Pryde is based in Duns, outside Edinburgh, but the majority of its clients located in London and the South East.

Charles Stanley has restructured its research department to create a new UK equity committee, which has seen four analysts made redundant. The committee will be led by Head of Equity research Tina Cook, who has been with the firm since 2008. It will work closely with the investment strategy committee to align equity research with the firm’s investment processes. Senior Equity Analysts Tony Shepard, Sam Hart, Rae Ellingham and Peter Thorne have left the company following the restructure.

Adam & Company has launched a discretionary portfolio management service for financial advisers. The offering will consist of three portfolios: Balanced, Growth, and Income and Capital. These will be run by the firm’s 14-strong investment team.While the average client size being targeted for the service is £1m, investors can access the service with smaller amounts.

Deutsche Bank has confirmed plans to cut 7,000 jobs as part of a 'significant reshaping' of its equities and trading business.  In a statement issued on Thursday following its annual meeting, the bank said it plans to reduce headcount in the equities and trading business by 25%. 

Boutique wealth manager GWM Investment Management has acquired a stake in Optimus Capital. Optimus, a Discretionary Investment Manager, led by the former Head of European Equities of Credit Suisse Martin Newson, will add a bespoke portfolio service to GWM Investment Management’s offering. GWM declined to reveal how much of an interest it has taken in Optimus or the amount it paid for the stake.

In it's latest deal Raymond James, which partners Wealth Managers to set up their own practices, has signed up ex-Charles Stanley duo Robert Skepper and Will Bancroft to open a London office. Raymond James has attracted a number of Charles Stanley alumnus to its roster after signing the private client stockbroker's former investment chief, Anthony Scott, as Head of Propositions last June. The pair will provide bespoke investment management services to UK clients. Within the portfolios, they will invest in direct global equities as well as collectives. They did not disclose charges.

Close Brothers’ client inflows over the three months to end of April were strong enough to cancel a slight mark-to-market loss with managed funds rising 2% in the period to £9.9bn. That was up from £9.7bn at the end of January while overall client funds within the business were flat at £11.8bn.

Brewin Dolphin has acquired 150 clients from retiring independent financial adviser (IFA) David Hogg. Hogg, who is retiring after 35 years in the industry, ran adviser Clark Thomson MortgageFinders, which provides advice on investment, pension and various aspects of tax planning in addition to mortgage brokerage. He was the only Investment Adviser in the business. A Brewin Dolphin spokesperson declined to say how much in client assets the business managed. The acquisition, for an undisclosed fee, came about as a result of a longstanding professional relationship between Hogg and Ian MacDonald, head of Brewin Dolphin’s Dundee office.

AFH Financial has sealed its seventh acquisition of its financial year with the purchase of a law firm's advisory business. The wealth consolidator will pay a maximum of £0.53m for the client portfolios of Nottingham-based Meritor, the advisory business of local law firm Freeths LLP. In a statement, AFH said Freeths had decided to sell the business and focus on its core legal practice due to 'ever-increasing' regulatory demands. 

Barclays Chief Executive Jes Staley has been fined £642,430 over his attempts to find out the identity of a whistleblower who had flagged concerns about behaviour in the bank. In a joint statement the bank's twin regulators, the Financial Conduct Authority (FCA) and Prudential Regulatory Authority (PRA), said Staley had ‘failed to act with due skill, care and diligence’.

John Morton, the founder and former Chief Executive of European Wealth, is gearing up to launch a new boutique Wealth Manager. The firm is called Broad Street Asset Management and will offer wealth management and financial planning services to clients. Morton is currently in the process of acquiring the company from Mark Braddock, a partner in brokerage Arden Partners, who set up the business in March.

Financial Adviser brothers who scammed more than 200 people out of almost £17m in order to fund their ‘lavish’ lifestyles were given jail terms after being sentenced at King’s Lynn Crown Court in May. Alan Taylor, 38, was handed a six-year sentence, while his sibling Russell Taylor, 37, was jailed for five years. The pair had earlier admitted fraud during a March hearing. The court heard that the pair had persuaded investors to buy into their investment company, which then funnelled cash into a high-risk finance scheme. While they banked the upside, any losses were passed on to their clients, with most victims estimated to have lost around half of what they invested.

Redmayne Bentley is planning to shut its Southport branch, with staff set to move over to the firm’s Liverpool hub. Southport Branch Manager Paul McKnight will remain at the firm and is planning to move across to Liverpool with support staff later this year. The firm’s Liverpool branch, headed by Derek Gawne, currently comprises three Investment managers and an Administrator.

Market Movers and Shakers

HSBC Global Asset Management’s (GAM) Regional Head for London, Tim Shaw, has joined Rathbone Brothers as an Investment Director.

Moore and Smalley has strengthened their financial planning team in Nottingham with the hire of Mark Boulger from The Wesleyan.

Dynamic Planner have appointed Paul Ravenscroft to their development team to work with financial planning firms in the North of the country. Paul joins after 15 years in a development role at O & M systems and Iress prior to joining. 

Scandinavian fund giant, Polar Capital hired Jorry Rask Nøddekæras Head of the EM and Asian team at Polar, Michael Wang and Jerry Wu as Fund Managers and Peter Andersen as an Analyst.

Online Investment Manager Netwealth has appointed Jupiter Fund Management Vice Chairman Edward Bonham Carter and MoneyWeek Editor-in-Chief Merryn Somerset Webb as Non-Executive Directors.

Heartwood Investment Management has announced that it is has appointed Investment Director Graham Bishop to take responsibility for its balanced investment strategy.

Andrei Kiselev, who co-managed Baillie Gifford alongside Gary Robinson and Helen Xiong, left the firm on 29 March according to the Financial Conduct Authority register, six days after the trust officially launched. Baillie Gifford confirmed the departure and said it would not be replacing him. The company did not provide any further details on the circumstances of his exit.

Brewin Dolphin has hired Thomas Pearson as an Investment Manager in its Exeter office.

Tilneyhas hired Catherine Davies to the newly created role of Head of Talent.

Private banking head Jeremy Vaughan has stepped down from the board of Hampden & Co, following a governance review. Vaughan remains at the business but is no longer a Board Director – a position he had held since April 2013. Hampden said Vaughan will not be directly replaced.

Artemis Investment Management has appointed Jasper Berens as Head of Distribution. 

St James’s Place Chair Sarah Bates is retiring from the board with immediate effect, following the group’s annual general meeting (AGM) in May. She will be replaced by Iain Cornish, who is currently a Senior Independent Director. As part of the reshuffle, Roger Yates will then be named Senior Independent Director.

Sanlam UK has bolstered its London team with the hire of Daniel Szabo as a Portfolio Manager.

Prydis has hired former PwC Managing Partner Stuart Wallace as a Non-Executive Director.

Brown Shipley has hired HSBC Relationship Manager Stephen Woods for its Leeds office in one of two appointments at the Yorkshire hub, alongside the transfer of Tess Williams from Manchester, who joins as a Financial Planner.

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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