CompaniesJun 5 2014

Newly-acquired national buys two more IFAs

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Independent adviser and wealth manager Sterling McCall has completed the acquisition of the assets of two IFA businesses in a deal that will take total assets under management to more than £400m.

The firm has acquired the assets of Grimsby-based Bromley & Coe and Financial Ltd appointed representative Meridian Financial Management, based in Rye, East Sussex, in a deal that will add around £50m in assets and about £165,000 in recurring income at outset.

All three of the advisers with Bromley & Coe, including founders Brent Bromley and John Coe, will move to Sterling and operate out of the newly-opened Grimsby office it set up after the purchase of Suttcliffe Soloway Financial Management last year.

Meridian’s sole adviser and managing director, Steve Griffin, will also join the business and “continue to service his international clients”, Steve Moseley, business development director at Sterling McCall, said.

The joining quartet, along with several seperate departures and additions in recent months, bring to 26 the number of advisers within the company.

Mr Moseley told FTAdviser he could not reveal the purchase price for the deal, but that it had been agreed on “standard terms” comprising of an up-front consideration followed by earn-out payments based on recurring income targets over 12 and 24 months.

He added the transaction was settled through a “purely paper swap”, meaning the vendors were paid in shares in the acquiring business, which is now part of Aim-listed Tavistock Investments following its buyout of Sterling parent County Life and Pensions last month.

Tavistock said the purchase, which saw both County and its investment management arm Blacksquare rebranded as Tavistock Partners and Tavistock Wealth respectively, would be the “cornerstone” on which a network of “several hundred” self-employed advisers would be built.

Speaking to FTAdviser, Brian Raven, chief executive, said the firm would be looking to launch a restricted network within around three months, with future acquisition targets being offered initially the option of being independent or restricted.

He added, however, that it may eventually seek to move to a fully restricted model as this would be “an easier compliance regime to run”, in a move that would see Sterling forfeit its independent status.

Mr Moseley said discussions were currently ongoing within the firm about the best model for the wider business in the future and that a decision should be reached within the three-month period outlined by Mr Raven.

He added: “Personally I can see grounds for both models going forward. There are those that would like to remain as IFAs, while others including some in Sterling McCall now, that may be happy to go restricted because it suits how they service clients through the use of model portfolios.”

The dual purchase of Bromley and Meridian is the latest of a slew of deals completed by Sterling, with Mr Moseley indicating no slowdown and saying the firm “expects to complete further acquisitions shortly”.