Financial planning and discretionary wealth management group Harwood Wealth has announced its plan to float on the Aim market and London Stock Exchange.
Harwood Wealth’s broker business N+1 Singer raised £13.5m in an over-subscribed fundraising drive, of which £10m was raised as new equity.
It said most of the proceeds will be used to fund further acquisitions and for small infrastructure costs.
The Harwood Wealth business was founded in 2001 under the name Compass Wealth Management, and has mainly grown through acquisition.
In February, the group acquired Meon Valley Financial Planning, and announced the takeover of investment manager Wellian Investment Solutions in May last year.
Alan Durrant, joint chief executive, said the industry is undergoing significant structural change in the wake of the Retail Distribution Review.
He said: “Many financial advisory firms have strong client books but unworkable, fragmented models, rising regulatory costs and a need to outsource certain functions or to be acquired.”
Mr Durrant suggested these factors create an opportunity for Harwood Wealth’s growth strategy as it looks for more takeover opportunities.
Scott Gallacher, chartered financial planner at Leicester-based Rowley Turton Private Wealth Management, said Harwood are not alone in this approach as there seem to be an increasing number of consolidators trying to buy up IFA firms.
“It makes sound business sense; acquiring other businesses is a very fast way to grow and it is true there are inefficiencies in the traditional adviser model.
Mr Gallacher said removing these inefficiencies through consolidation and changing working practices can generate large cost savings for the purchasing business.
“However, in my experience these cost savings are rarely passed onto the client and in many cases clients end up being charged more by the new company for an restricted advice service.”
katherine.denham@ft.com
