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Financial Services - Wednesday 1st November

01 Nov 2017

Market News

Tilney Group has certainly reaped the rewards of the Towry money machine in 2016, with the latter contributing £52.6m to the firm’s revenues in the five months to the year’s end. According to its results for the 12 months to December 2016 filed at Companies House, Tilney’s revenue almost doubled, rising by 96% to £135.2m. Aside from Towry’s contribution, this figure includes eight months from Ingenious, which contributed £8.1m. Overall, the company revealed a loss of £23m over the year. This was due to operating and administrative expenses of £133m, including acquisition and integration costs of £17.7m.

A number of Charles Stanley holdouts, who left the firm after failing to come to an agreement on remuneration, have set up their own company. The business, called GPIM, has been established by Gino Palmeri, with Gareth Norton and Ian Jones appointed as investment managers. Palmeri owns over 75% of the company, according to Companies House filings.

St James's Place (SJP) continued to be one of the winners of pension freedoms as it recorded inflows of £3.6bn in the third quarter of the year. The restricted advice group has seen a remarkable rise in pension inflows since the introduction of freedoms in April 2015. In the three months between July and September, £1.8bn of inflows came into its pension business, a rise from £1.2bn in the same period last year. For comparison, in the same period in 2014, before freedoms were in place, SJP recorded inflows of £514m into its pension business. 

In further news St. James’s Place, the wealth management group, has revamped its fund range and has confirmed it will launch two new funds from 6th November. The company says the changes to its range of funds demonstrate its “distinctive investment management approach.” The two new funds are: the Japan fund to be launched, managed by Yoshihiko Ito of Nippon Value Investors, based in Tokyo and the Global Growth fund to be launched comprising the investment strategies of current managers Magellan, EdgePoint, Sands Capital and Select Equity Group.

Chartered Financial Planning firm Fairstone has acquired Hase Osborne, another leading Chartered Financial Planning firm, for an undisclosed sum. Hase Osborne Asset Management is based in Wendover, Buckinghamshire and offers wealth management and holistic Financial Planning to high net worth individuals. Hase has 14 staff providing specialist pensions, investment and tax planning advice to 650 clients. The deal is the fourth in 2017 structured by Fairstone as what is calls a downstream buy out (DBO), a 'partnership' allowing steady transfer of ownership from Hase to Fairstone. In this case it has been followed by Hase being fully acquired by Fairstone. It brings total revenue of £2.1m to the Fairstone Group and funds under management of approximately £250m.

Lockhart Capital Management opened its doors back in August. Founded by five former senior executives from Towry, the business was set up in three locations: Cobham, Leeds and Aberdeen. The firm is part of advice network Best Practice, in which Schroders bought a stake by acquiring 65% of its parent Benchmark Capital for nearly £86 million in 2016.

HM Revenue & Customs (HMRC) has repaid almost £37m on over-taxed pension withdrawals over the last three months. Pension freedom payments are taxed at an individual's marginal rate. If an individual draws a large amount in a single month then they can be taxed at a higher, emergency rate of tax. Individuals who are charged this higher rate can then reclaim this tax from HMRC by filling out a form. In its latest newsletter HMRC said it has repaid £36.9m in over-paid tax on flexibly pension payments from 1 July to 30 September - this amounted to around 8% of those taking flexible pension payments.

The Chief Executive of Sipp firm STM Group has been arrested by police in Gibraltar over allegations he failed to disclose information about a client involved in a tax dispute with two countries. According to a market notice published by the AIM-listed company, Alan Kentish was arrested on 19 October.  The unidentified client was involved in a tax dispute between two countries about their rights to tax him from 2008 to 2013. 

HM Revenues and Customs expects to net up to £325m after winning a court battle against the Liberty tax scheme, which was promoted to the wealthy by Mercury Tax Group. More than 1,600 leading public figures, including doctors and judges, pumped around £1.2bn into the scheme between 2005 and 2009. According to the tax office, the partnership claimed a deduction for the cost of purchasing dividend drawing rights but tried to exclude the dividends received from its trading results, creating a loss which was used to reduce users’ tax bills.

Sipp provider Curtis Banks has confirmed the closure of its Market Harborough office with 53 staff being made redundant. It was revealed Curtis Banks was considering the closure of its Midlands office, which it took over following the acquisition of Pointon York in 2014, with nearly 60 jobs at risk.

The advice network Tenet said it is ‘bucking the trend’ on gender diversity despite a 32% gender pay at the company. Information on Tenet’s gender gap has been published on the government’s online gender pay gap reporting database. According to legislation that came in to force in April this year, all private companies with over 250 employees are required to publish data on gender pay gaps by April 2018.

Standard Life-owned national restricted firm 1825 has acquired Bristol-based IFA Fraser Heath. The deal will add £352m of assets under advice to 1825.  It is the first acquisition made by 1825 since Standard Life merged with rival asset manager Aberdeen Asset Management. 

Lloyds has bought Zurich's £19bn workplace pension business. The deal will see Zurich's 500,000 corporate clients join Lloyds' pension arm Scottish Widows. Currently, Scottish Widows manages £124bn of pension assets, of which £35bn is in workplace pensions.  As part of the deal around 200 Zurich staff largely based in Cheltenham will move to Lloyds Banking Group.

Ex-Rangers boss Walter Smith is suing his Financial Adviser over a pension fund investment. The 69-year-old started legal proceedings against Neil Caisley in Scotland's Court of Session on 4 October in relation to investments made when managed Premier League club Everton in the late 1990s.

Around 150 investors have been left unable to access their pensions because Broker iDealing will not recognise Suffolk Life as a Sipp provider. Tax rules mean the investors cannot move to another Investment Manager without facing a prohibitive penalty. These investors were previously using European Pensions Management Limited (EPML) as the Sipp provider for their iDealing investment accounts.

Progeny Group, a boutique headquartered in Leeds, has acquired Chestergate Financial Planning, for an undisclosed sum. This is the second acquisition the firm has made in 2017. The company, which also has an office in London purchased Quadrant in March expanding its office in the City.  The team at Chestergate, which has offices in Salisbury and London, will join Progeny. Meanwhile, Chestergate's management will take a minority stake in the Progeny Group.


Market movers and shakers

Brown Shipley has tapped up Santander private banking and wealth boss Alan Mathewson to replace outgoing Chief Executive Officer Ian Sackfield when he stands down in April next year.

AIM-listed national IFA Frenkel Topping has appointed former Coutts head of private banking, Paul Richardson as Executive Chairman.

Dave Ingham, who had responsibility for a team in the North at Barclays Wealth, was with the bank for over 16 years and has been appointed by St James's Place as a Partner in Leeds.

Tilney has bolstered its London office with the appointment of Andrew Tompson, who joins the company as a Business Development Manager with a region focused from London to the South Coast.

Rathbones Newcastle has announced a significant addition to its team with the appointment of Andy Webb as Investment Director.

Brewin Dolphin saw 9 people depart both senior and junior roles across its branch network over the summer. George Harper, an Assistant Investment Manager at Brewin moved to LGT Vestra in July as an Investment Manager. Hollie Curtis has joined Rathbones last month in a similar post, whilst David William Read has joined Tilney as a Senior Associate. In Brewin Dolphin's regional offices, John Lynch, the Divisional Director at the Belfast branch has left the company, whilst Verity Criddle, a Divisional Director at the Shrewsbury office has also departed and Gillian Fleming has left the Bournemouth branch.Elsewhere, David Brister, an Investment Manager  and Chartered Wealth Manager,  Sue Balata have both left.

In further news, Brewin Dolphin has promoted Tom Miller to head of its Bristol office. As the new head of the office, Miller will be tasked with leading the firm’s growth and development in the South West.

Fairstone, one of the UK’s fastest growing Chartered Financial Planning firms has announced the appointment of Sheriden Davy as Group Compliance Director, with effect from January 2018. 

Alec Stewart, who was previously Chief Executive Officer of Anderson Strathern Asset Management, has set up Stewart Asset Management, based in Glasgow.  The new firm, owned by Stewart and Ruth Stewart, offers asset management and investment services to clients.

Quilter Cheviot’s Leicester office has boosted its investment management expertise with the appointments of two new team members. Sebastian Taylor has joined the firm as Investment Manager and Shilpesh Patel has joined as a Trainee Investment Manager.

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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