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Financial Services Newsletter - Wednesday 2nd May 2018

02 May 2018

Market News

Rowan Dartington is to open a regional hub in Taunton to house a 20-strong team. Based in Blackbrook Business Park, the site for the new branch is currently under development. The office will bring together staff from Rowan Dartington’s Weston-super-Mare, Exeter and current Taunton offices. These small hubs will close once the regional centre opens. There are also plans to continue to grow the headcount as the company said it is always looking to attract more talent to the business.

Fast-growing Chartered Financial Planning firm Fairstone has fully acquired Sims Financial Planning, marking the firm’s third acquisition of 2018. Sims first joined North East-based Fairstone through its proprietary downstream buy out programme in July 2015 and completed its integration prior to the final purchase. The deal brings total fee income of almost £500,000 to Fairstone and funds under management of more than £90m. Three Sims staff will also join Fairstone. The company says that as the downstream buy out programme enters a more mature phase, more companies which have been “successfully integrated into Fairstone” will progress through to full acquisition. Fairstone expects to make a total of nine such acquisitions during the course of the year.

Financial Planner and Wealth Manager Harwood Wealth Management has bought Ascot-based retirement solutions specialist Plan65 for £1.156m. P65, which has assets under influence on £42m, is owned by its founders, Keith Turner and Doug Rae who both plan to retire following completion of the deal. The purchase price of £1.56m is dependent on the performance criteria of Plan65. The initial cash sum of £810,068 will be funded from Harwood's existing cash resources. Deferred consideration of £747,296, payable in two instalments, will be payable over the next 24 months, subject to adjustment based on performance. Plan65 will be integrated into Harwood’s subsidiary Compass Wealth Management Consultants.

Close Brothers is sticking with the UK despite being ‘cautious’ due to Brexit and attractive valuations elsewhere. Co-manager of the Close Managed funds, Sam Grant-Dalton said lingering Brexit uncertainty and decent corporate profit growth elsewhere meant he has reduced his exposure to UK stocks. But he added: ‘The UK is still our biggest allocation relative to our long-term asset allocation. We are conscious we have UK clients with sterling liabilities.’ The Close Managed Balanced fund has a 20.39% weighting to UK equity, and its top two holdings are the Liontrust Special Situations and Investec UK Alpha funds.

Royal Bank of Scotland (RBS) will cut nearly 800 jobs under plans to close 162 branches in England and Wales. According to the bank, last year's decision to drop the sale of 300 branches as part of Williams & Glyn was partly to blame for the job cuts. After the taxpayer bailed out RBS in 2009 the EU demanded it sell off the branches under competition law. A spokesperson for RBS added that the branches singled out for closure are 'in close proximity' to other branches in the RBS and NatWest network. 

Fund Management has been acquired for £1.13m. The Ascot-based IFA, jointly owned by director Ian Head and Diana Head, has been scooped up by financial advice and discretionary wealth management business Harwood Wealth Management. This is Harwood’s second Ascot acquisition in a month. It bought nearby firm Plan65 for £1.56m. P65, had £42m assets under advice. Fund Management has assets of £34m.

Birmingham-based Wealth Solutions has bolstered assets under advice by more than £60m following the acquisition of Kingsley Financial Planning. The takeover of the Leamington Spa firm takes Wealth Solutions’ assets under advice to more than £350m. It also means four new members of staff have joined the team. One of these is Kingsley Director Carl Mason, who has sold up as part of his retirement strategy. Mason will continue to work with his client bank, before eventually phasing into retirement.

Standard Life has fully integrated the Elevate platform it acquired in 2016 for £31m. According to the insurer, all transitional service agreements with Axa UK have now ended. However, it will continue to operate the Elevate platform separately to its existing Standard Life Wrap. New elements have been added to the Elevate platform since acquisition such as access to Standard Life International Bond, over 440 discounted funds and an option for clients to opt out of receiving paper contract notes.

True Potential plans to use blockchain technology to build its new investment platform. The advice business, which recently parted ways with long-time technology provider SEI to go its own way, plans to launch the new platform in the next 12 months.  It will be the first platform to be based on blockchain, the technology behind cyptocurrencies such as bitcoin. The idea behind blockchain is that computers in a network can quickly verify information rather than relying on external third-parties. 

Tatton Asset Management has added £1bn of assets over the last 12 months, following a recent IPO. This is better news for the asset management group, which has a discretionary fund management arm, support services, an advice group, which saw a 71% hit to its pre-tax profits for the six months to September 2017 due the exceptional costs of the IPO. Tatton was admitted to the AIM market in July last year after a £87.2m IPO. Paul Hogarth, Group Chief Executive, said the firm’s increased profile since the IPO would increase asset inflows. In a trading statement covering the last 12 months, published this morning, Tatton announced assets under management of had increased 25.6% over the year to 31 March 2018 to £4.9bn. The group's IFA support services business, Paradigm Partners, has continued to attract members with client firms increasing to 368, from 352 last year. Paradigm Mortgage Services, the group's mortgage distribution and support services business, also added members, from 1,069 to 1,219.

Former St James's Place (SJP) Chief Executive David Bellamy will still be paid £230,000 a year, after stepping down from the role at the start of 2018. Bellamy is being retained by the restricted advice group as an Adviser to its international business and executive team. According to SJP's annual report he will be paid a salary of £230,000 for his services, a significant reduction from his pay package as Chief Executive which saw him receive a total of £2.5m in 2017. This consisted of a salary of £518,000, a £754,000 bonus, extra benefits of £51,000, long term incentive shares worth £1.1m and pension contributions of £103,500. 

AIM-listed national advice firm Frenkel Topping lost around £40m in assets under management in 2017 as advisers fled to a rival firm offering them ‘silly money’. In response to losing three advisers, two going to Slater and Gordon-owned Adroit Financial Planning, Frenkel Topping said it has tightened up its restrictive covenants. In a statement on its financial results for 2017 executive chairman Paul Richardson said the three left in 2016 and the hit was felt after their covenants lapsed and they were permitted to contact their clients.

Consolidator AFH has bought Royston-based advice firm Mark Hughes & Associates in a deal worth up to £1.6m. The acquisition will add £50m of assets under advice and around £600,000 of revenue per year to AFH. AFH has paid an initial cash consideration of £700,000, with further deferred consideration based on performance targets set to take the deal to between  £1.2m and £1.6m. Alan Hudson, Chief Executive of AFH, said the he hoped Mark Hughes & Associates Director Mark Hughes will help grow the consolidator's presence in Hertfordshire.

Openwork has completed a deal to buy Zurich's 25% stake in the network, marking its independence from the life company that founded it in 2005 out of the original Allied Dunbar business. Following the completion of Zurich's sale the majority owner of the Openwork network will be the Openwork Partnership LLP, which represents advisers who are part of the network. A minority shareholding will be retained by Openwork employees in the form of an employee benefit trust. 


Market Movers and Shakers

Arthur J Gallagher in London has strengthened their Senior Leadership team in line with continued growth with the appointment of Chris Evans who was previously a Senior Consultant at Conduent. 

Nicholas Lawman has joined Wealth Wizards in Leamington Spa from Attivo as part of their Robo Advice Team.

Artorius Wealth in Manchester has strengthened its Wealth Management team with the appointment of Peter Healey from Coutts.

Lockton, the Broker and employee benefits consultancy, has announced that senior vice presidents Jon Green and Chris Rofe will jointly assume leadership responsibilities for the UK and International Benefits practice, effective 1st May 2018.

Arbuthnot Latham Chief Executive Ian Henderson is stepping down from his role at the end of the month and will leave the firm in September.

Ben Willis, Head of Research at Whitechurch Securities, is leaving the firm after 12 years to join Chase de Vere as Head of Portfolio Management. 

Psigma Investment Management has poached Rathbones Investment Director Daniel Faulkner, as it looks to build up its regional presence. He joins as an Investment Director and will work out of Psigma’s branch in Birmingham.

Seven Investment Management (7IM) has poached Rathbones Director Grant Hamilton to head up a new office it will open in Jersey. The firm has received regulatory approval for the office, which will open next week and be based in St Helier.

Rathbone Brothers has promoted its Finance Director Paul Stockton to Managing Director of its private client wealth division, Rathbone Investment Management.

Investec Asset Management has poached Portfolio Manager, Imran Ahmad from Aberdeen Standard Investments (ASI) as it grows its 32-strong multi-asset team.

Equilibrium Investment Management has poached James Carr from Investec Wealth & Investment Management’s Leeds office to boost its ranks at its Cheshire headquarters. He joins the firm as an Investment Analyst.

IFG Group has appointed Kathryn Purves to lead the business after John Cotter stepped down with immediate effect.

Market Harborough-based Clarkson Wayman Ball (CWB) has hired a former national St James’s Place (SJP) Compliance Officer, Jon Dibble as Group Compliance Director, to help with its expansion plans.

Chelmsford-based advice firm TFP Financial Planning has recruited a Legal & General Investment Management (LGIM) Head of Regional Sales, Dan Haylett as a Trainee Adviser at the firm.

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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