For David 'Monty' Montgomery, the influx of private equity money into the financial advice industry is not necessarily a good thing.
Having conducted several large acquisitions in his short time as managing director at M&G Wealth – the savings and advice business of M&G – he says that private equity's tendency to short-termism may not be in the long-term interests of the consumer.
He says: "In this industry, when you're trying to acquire firms to flip and sell on to make money, I'm not sure that's the best thing for the advice business or the customer.
"Big institutions who are in it for the long term and are focused on customer outcomes, which we are, are a better long-term owner."
Acquisitions rolling in
Since joining in January 2020, and currently sporting a moustache on the last day of 'Movember', the charity month in aid of men's mental health, Montgomery has overseen several big acquisitions.
He was involved in the acquisition of Ascentric, which created M&G Wealth in September 2020; there has been Sandringham Financial Partners – the advice business started by SimplyBiz founder Ken Davy; TCF investments, an MPS; and he is in the process of another advice business acquisition, Continuum.
This is all part of a bigger strategy to make M&G Wealth an all-round player in the financial advice sector, after M&G PLC was merged with Prudential UK, before together the two businesses were split off from the bigger Prudential company, which under its own listing now just focuses on business in Asia.
M&G Wealth now sits alongside M&G Investments and Pru UK (the heritage business), and comprises M&G Wealth Advice, which includes the old Prudential Financial Planning tied adviser business, and The Advice Partnership, now known as M&G Wealth Advice, alongside the independent brands, Sandringham and Continuum, and a hybrid advice business, in partnership with Ignition Advice.
Then there is the platform, Ascentric, now called M&G Wealth Platform, and M&G Wealth Investments, which offers model portfolio services and Prufund.
Montgomery says: "We had some component parts of an advice business, but we were quite narrow – we only had Prufund [as part of Pru UK], it was the only offering that we had, and you could only get access to Prufund in a packaged product.
"The market was shifting towards platform and MPS and we as M&G did not offer these types of solutions – we had some capability but not all of these components. We want to be a top five player in the wealth market.
"We were already working with 4,000 professional advisers – that's where the vast majority of our business comes from. We also see that there's a growing advice gap in the market where people are looking to get advice because they can't get it because the cost of providing advice has gone up."
