Collins Stewart reassures on Eden
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Canaccord subsidiary Collins Stewart Wealth Management has spoken out to reassure Eden Financial’s clients that it has taken steps to retain key staff, as Canaccord takes over Eden’s wealth management business.
The firm’s chief executive Neil Darke said Eden’s clients would continue to be able to deal with their existing investment managers.
He confirmed “all the key client-facing staff have signed contracts as part of the initial transaction”.
Last week Collins Stewart Wealth Management’s parent company Canaccord Financial announced plans to acquire Eden Financial’s £835m asset book of wealth management business, managed on behalf of 2,500 clients.
The merger, which is subject to FSA approval, will create a £9bn wealth manager which will run money for more than 12,000 people.
The merged entity is expected to rebrand as Canaccord Wealth Management in 2013.
Mr Darke added: “It will be business as usual for Eden’s clients as they will still be dealing with Eden and their existing advisers.
“In due course we will look to transfer the assets from a third party custodian platform to ours, which we will need to communicate with clients about down the line.”
Canaccord said it had agreed to pay up to £12.8m in cash for the Eden business, of which £7.7m will be payable upon completion and up to £5.1m after a year, subject to performance-related conditions. Further incentives of up to £4m have also been set to reward further growth in revenue.
“There are different parts of the consideration which include incentives for staff to grow the business, some of which is deferred based on certain targets,” Mr Darke said.
“There is also a further pot for staff as an incentive to increase the amount of fee revenue.”
An announcement is expected this week in relation to Eden Financial’s asset management division, which is set for “disposal” under the deal. Mr Darke said shareholders including chief executive Stephen Massey (pictured), chief financial officer John Gulliver and chief operating officer Pat Johnson had sold their shares in Eden. Mr Massey will be joining CSWM’s board while Mr Gulliver and Mr Johnson will be joining CSWM’s executive team.
We say... Collins Stewart Wealth Management seems to have taken sensible steps to ensure a smooth transition for Eden Financial’s wealth management customers. The use of contracts to keep key client-facing staff in place is a standard precaution, to ensure that everything is done to keep the 2,500 customers from taking their money elsewhere. Much will depend on whether the clients will feel that the customer service they get from the larger combined firm lives up to their experience with the much smaller Eden Financial.
Canaccord buys Eden: the facts of the deal