Advice firm consolidator Bellpenny has dropped its strategy of making 20 acquisitions a year, following its merger with Ascot Lloyd to create a giant with £6bn of funds under management
The chief executive of the merged entity, Nigel Stockton, said that integrating large numbers of advice firms after acquisitions “is hard”.
“We have to think of the clients and the advisers,” he said. “And so we’ll be focussing on making bigger an d better acquisitions.”
Dominic Rose, a former director, had targeted 20 acquisitions in a year, but Mr Stockton said since he’d been in position, the firm had made two acquisitions.
“That’s one every ten months,” he said. “ I reckon there is scope to do more.”
Bellpenny and Ascot Lloyd announced their merger yesterday (3 July).The combined organisation has more than 100 advisers, looking after more than 40,000 fee-paying clients. It becomes one of the largest independently-owned wealth management businesses in the UK.
Mr Stockton said that the company now had work to do combining the two different businesses and ensuring that as many advisers and clients stayed on board as possible.
“We’ve got much better at ensuring we look after our advisers and clients when we do deals,” he said.
“We give them support and ensure that we respond to all queries in a timely manner. We make sure the advisers are comfortable with the relationship. For the clients at the moment it’s not a complex message, just a change of name,”
The new business includes BIA, the independent advice arm of Bellpenny. Mr Stockton said the firm would still offer independent advice. “It’s about giving advisers choice - the best choice for their clients,” he said.
He added that mergers of financial advice firms would continue, as advisers cope with rising costs.
“The costs are only going one way,” he said. “The way to deal with them is with M&A. I’m not saying it is the end of the small firm, but it is the beginning of the time when we’ll see firms with 2000 or 3000 advisers - the same way as with mortgage advice.”
Bill Marshall, financial adviser from Lamb & Associates in Newcastle said that he thought that although there would be more consolidation in the future, there were advantages to smaller firms.
“I wouldn’t want to be part of a big firm. I think that maybe every client matters more in a small one. I can see the advantages of big firms but they’ve been predicting the death of the small adviser for a long time now and it hasn’t happened.”
