Fred Hansson, partner at independent financial services industry mergers and acquisitions adviser, Imas Corporate Finance, has been involved in the M&A and equity capital markets advisory business since he first joined the City just over 20 years ago.
“Handelsbanken and Cazenove [latterly JPMorgan Cazenove] gave me solid experience in all aspects of international corporate finance, including M&A and insight into the financial services sector, all of which I am putting into practice at Imas Corporate Finance,” he said.
A brief stint at Kaupthing Singer & Friedlander in 2008, having joined only six months before it collapsed, also gave Mr Hanssen first-hand experience of the vulnerability of financial institutions. Coming to Imas soon after in 2009, he sought to bring his skills to the broader base of IFAs, wealth managers, investment managers and trusts, as well as other intermediaries, particularly focused on the UK financial services market.
He said: “Albeit a time of extreme uncertainty, 2009 was a great opportunity for me to join the firm: the turbulent state of the financial markets following the largest failures of financial institutions for generations and the prolonged global financial crisis have prompted major reviews of strategic priorities by most boards across the financial services industry that make this a very interesting space in which to operate.”
The key development in this regard, he said, has been prompted by the retail distribution review which, by forcibly migrating the IFA business from one driven by arbitrarily-set commissions to one based on a more rigorous fee-based structure, has established a uniquely fluid business environment for the UK’s financial advisers.
He said: “In broad terms, the clients are now happy, the FCA is happier, and the IFAs are not happy at all in general, with many smaller IFA businesses now looking to either sell-up entirely or to consolidate their operations with a bigger player, often on a regional basis.”
More specifically, he added, the new RDR-shaped IFA marketplace has become one in which the vast majority of IFAs have become more selective about the clients that they spend time on, identifying those who are the least profitable – if at all – for a downscaling of service, not least because of the FCA’s guidance aimed at IFAs increasing their capital bases.
He said: “In today’s operating environment, if a firm can’t earn at least £1500 to £2000 a year from a client, on top of the initial fee paid at the start of the relationship, which would translate into that client having around £200,000 in liquid assets as a starting point, then the tendency is to try to redirect them to a direct-to-consumer platform, as they are simply not economically viable for a firm to spend face-to-face time with.”
Having said this, the client segment above the £200,000 liquid assets point does not provide IFAs with an unobstructed business opportunity, he said, as many of the bigger financial providers are increasingly zeroing-in on this customer segment in a more direct way, especially through the development of platforms that are broadly more technologically advanced than those of the average IFA.