“A well run business with a good background and a cultural fit. The clients have been well looked after and are used to getting solid financial advice face-to-face. We want to make sure everybody gets good value out of an acquisition.”
Ronaldson said he wants to provide an RDR ‘fit and ready’ proposition for clients and admitted one of the drivers for IFAs selling their business has been concerns about the necessary qualifications in a post-RDR world.
“Every deal is different. Some are genuinely retiring and want to make sure their business is properly looked after and the clients are looked after. Some, I think, in the lead up to RDR were looking for an exit,” he added.
For more about Bellpenny’s acquisitions so far, click here.
RDR sell-outs
Looking forward Ronaldson thinks we will see an increase in IFAs saying ‘I am now in the post-RDR world and for whatever reason I am not confident I can provide the right level of service’.
Alternatively IFAs might find they are unable to be profitable and for that reason might consider selling the business to a third party.
“I do not think you can put a finger on any one reason for the wish to sell.”
Following recent high-profile deals in the City such as Schroders’ proposed purchase of Cazenove and City Financial’s acquisition of OPM, Ronaldson believes the pace of M&A is set to increase.
“RDR was very much a deadline and in the lead up to it and just after it people maybe sat on their hands. Now they know what has emerged and can make decisions based on the facts rather than rumour and concerns. Now they can make decisions and deal with it for their own businesses, I think there will be more acquisitions to come.”
Founded in October 2012, Bellpenny completed the purchase of five IFA firms in January, and currently has assets under administration of just under £500m. It is targeting assets of £1bn by mid-2014.
‘Not a network’
“We are absolutely not a network, we are like a national firm and all of our staff are employed. We do not provide a home for self-employed advisers, we are very much in control of the proposition and application of financial planning that sits behind our business.”
On the Brooks Macdonald strategic alliance, Ronaldson said the DFM services would be recommended to clients that Bellpenny’s advisers believe have a suitable risk profile and think it is appropriate for.
As one of 11 firms to have a strategic alliance with Brooks Macdonald, Bellpenny gets its “best rates”, according to Ronaldson, although he did not have specifics to hand.
Read our guide on the DFM criteria advisers really care about.
Brooks Macdonald’s £4.62bn discretionary business offers both bespoke and model portfolio services. It gets 85% of its bespoke business referred by advisers and 100% of its model portfolio business through advisers, according to Defaqto.
The minimum investment for the five-strong range of model portfolios is £20,000 while clients must have £200,000 to use its bespoke service.
Defaqto has awarded both the Brooks Macdonald bespoke service and its model portfolio service five stars in its independent discretionary ratings, which were launched last year.
Find out the five discretionary fund managers rated five star by Defaqto at launch.
