Resisting the advances of networks

Aside from the juggernaut that is St James’s Place in terms of growth of assets, partner numbers and, it seems, share price a few other networks have called for attention in the past few months.

Portfolio Adviser


First up is Bellpenny, which declared back in January that it intended to acquire up to 60 IFA firms in the following 18 months, and at last count had acquired eight since October.

Then there is AFH Financial, which floated just over two years ago and has made 14 acquisitions since – its most recent in the form of Shape Financial.

Next up is True Potential, which told Portfolio Adviser last month that the number of intermediaries joining its national advisory firm, and bringing their books of business with them, had leapt 285% in the past year.

True Potential said 42% of these new-joiners were displaced high street bank advisers, but those who own their own businesses and are looking for support from a centralised process are also joining the wealth platform.

Then just today Perspective announced its intention to list on AIM. Since it launched in 2008 it has made 31 takeovers and has £2.5bn in AUM.

Cheap talk?

In the run up to RDR implementation IFA networks saw a 5.8% decline in the number of approved persons, greater than the 4.2% drop witnessed by individual IFA firms.

This was thought to be largely down to the bankruptcy of Honister Capital and its subsidiaries, which went into administration in July last year, leaving 900 advisers facing an uncertain future. Subsequent reports estimated a third of ex-Honister advisers had left the industry.

The yearly change for approved persons in IFA networks shows a decline of 1,942, or 21%, up to the end of May. Although, month-on-month, May saw a 23-person increase in approved persons, according to IMAS Corporate Finance.

Meanwhile, the yearly decline in approved persons for IFA businesses is only 0.9%, or 215 people.

So is the fighting talk of all these acquirers just that and not much more? Are directly authorised IFA firms actually proving to be more resilient than the networks thought in the wake of RDR?

This is another phenomenon that will take time to filter through the industry, and it is unclear which business model the market will favour over the long-term.

But there are certainly a number of networks on the prowl, and judging by the Honister example advisers should think carefully about the ‘security’ they think they might find in a bigger company.

If you would like your business to attract potential buyers, find out what they look for here…



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