Your IndustryApr 8 2016

Post-merger Tilney to plug in tech, not robos

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Post-merger Tilney to plug in tech, not robos

A merged Towry and Tilney BestInvest super-adviser will have the deep pockets needed to invest in “cutting edge” technology, Jason Hollands has said, but it won’t join the rush of the robo-advisers.

Tilney Bestinvest agreed to buy Towry from its majority shareholder Palamon Capital Partners for £600m on 4 April, creating a combined business with more than £20bn of assets under advice, and around 240 financial planners and 120 investment managers.

Mr Hollands, business development managing director of Tilney Bestinvest, said greater scale will allow the merged company to invest in areas demanded by advisers, like technology.

“If you are a business with greater scale, you have got greater financial resources to keep on investing to make sure you have got the right tools in place for financial planners,” he said.

“Most offices across both businesses are generally quite small, but what you want standing behind that is significant central resources in terms of investment research and IT. We are always looking to make sure our systems and technology are at the cutting edge.”

But he expressed scepticism about whether the enlarged firm would join the rush of advice firms making a move into so-called ‘robo-advice’.

Tilney Bestinvest feels “comfortable” with its current online offering, Mr Hollands said, adding investment was unlikely to be directed towards a more sophisticated automated proposition.

“If you go onto our website you can buy a model portfolio through an online process - I don’t describe that as advice and there is no robot involved,” he said.

“Our general goal is to provide a simple online process to choose a managed portfolio. I am pretty comfortable that we are supporting clients in that space.”

Several large and small financial services firms have entered the robo-advice market in recent months, encouraged by the regulator, which is keen to use technology to find lower cost solutions to the advice gap.

On 17 March, Royal Bank of Scotland announced plans to replace advisers with an automated service. It was criticised for making advice more exclusive by union Unite, but was branded simply one solution to the “difficult” advice gap problem by an industry expert.

Mr Hollands said there is “an important line” between providing a simple process where the investor makes the decision, and the giving of advice, which involves asking questions about suitability. “We have taken great care not to get into that space [online]” he said.

After the Tilney and Towry deal completes, Mr Hollands confirmed there will be a review of the business, which could lead to some redundancies, but mentioned that this would not affect advisers, investment managers or other client-facing staff.

As part of the deal Towry’s chief executive Rob Devey will leave the business.