Embark Group, the parent company of Hornbuckle, has taken over self-investment pension administrator Avalon Investment Services.
Yesterday (25 February), FTAdviser reported the Financial Services Compensation Scheme was working with the administrators of Avalon.
The Sipp administrator went into administration on Monday (22 February) and the FSCS has said it is working to understand what the firm’s insolvency might mean for its customers.
Following the deal, Embark Group will set up a new entity, Embark Investment Services, which will be the regulated entity which has instant savings account permissions.
As such, Embark Group will use the acquisition to bring Isa and nominee capability to the group.
However, trading will continue under the name Avalon, Mike Douglas, head of propositions at Embark Group, told FTAdviser.
Although Mr Douglas said the company had not disclosed the figure it paid for Avalon, he said a rough ballpark figure of £125,000 was not inaccurate.
Mr Douglas said: “There will be no restructure as such. The Avalon business is a great business and has been trading profitably, but in does not have the expertise in-house. It does not have the resources to buy-in expertise and it needs to develop.
“We can help on the IT and marketing side, and provide all the regulatory capital and technology to help take the business forward.
“From our perspective we have no presence in the Isa business so this helps us to bring Isa capability into our business straight away.”
Mr Douglas added over the next six months, the plan was to bring the business in and “stabilise it and spend some time understanding it”.
When asked for his opinion on the deal, Scott Gallacher, director at Rowley Turton, said: “Our own experience of Hornbuckle has not inspired us in terms of service standards.
“I would rather Hornbuckle focuses on sorting out their own internal problems rather than potentially taking on more problems.”
ruth.gillbe@ft.com
