Old Mutual Wealth’s Friday flourish this morning (28 February) when it announced the acquisition of 3,000-adviser strong network Intrinsic was a fitting end to a week of moving and shaking.
Old Mutual was at pains to make it clear that normal service at Intrinsic will continue seamlessly: management and operations will be unchanged; the brand will remain intact..
Indeed, Old Mutual’s Paul Feeney promised that not only would Intrinsic advisers be able to keep their independent or restricted status, but that Skandia would continue to serve - and ‘support’ - the external adviser market in just the same way as before.
The big question on everybody’s lips, however, was why the firm is keen to get into the distribution space at a time when others are clamouring, not necessarily successfully, to get out?
The move is especially interesting considering some of the rumours which have been flying around about rival network Sesame, and the difficulties its parent is having trying to sell it. It’s been on the block for more than a year and there is no sign of it going anywhere imminently.
Some have even predicted the fact there are bidders for Bankhall and not Sesame itself could lead to the latter being wound down, despite its move into safer restricted advice.
What I find interesting is that Sesame apparently cannot be sold due to historic liabilities, but surely Intrinsic to whatever degree suffers from the same long-term liability issue - as would all networks and nationals given the lack of a long-stop.
Old Mutual has seemingly secured some major distribution potential with the deal, with Skandia protection products and its platform immediately being added to Intrinsic’s platforms - maybe this makes up for any potential issues down the road?
Heading east
Intrinsic wasn’t the first big move this week.
In its annual results wealth manager St James’s Place revealed it was in talks to buy the Henley Group, an intermediary business operating out of Hong Kong, Shanghai and Singapore that targets ex-pat clients.
SJP chief executive David Bellamy said Henley has 50 advisers and more than 4,000 clients, but that the market was ripe for the picking.
Its interesting to see SJP heading east while Old Mutual is taking a step back almost into its own past by buying into UK distribution.
Elsewhere, BestInvest parent private equity company Permira also announced it was set to buy wealth manager Tilney and merge the two to create a new standalone entity with about £9bn under management.
The merger is set to complete in the second quarter of this year.
Beyond buyout news it was a real good-news/bad-news week for two other players: Invesco and Aviva.
Invesco Perpetual revealed an overhaul in how it publishes its fund prices from April, in a move the group said was a victory for transparency and which would make charges easier for customers to understand.
The news was greeted rather warmly, although I have to say I’m not entirely convinced they haven’t just come up with a new name for the ongoing charges required in Key Investor Information Documents for the past two years.
That same day the FCA revealed it was investigating Invesco Perpetual’s US parent over matters relating to its compliance controls. We await with baited breath for more details to emerge.
In Aviva’s case, it boasted a doubling in adviser numbers on its platform as well as assets under management to £3bn, which head of platform proposition Phil Ralli predicted would double again to £6bn by the end of 2014.
Considering it’s up-and-down history in the platform space, this will be seen as a real vindication that it has got it right this time and could be a real player. The assets under management will be a welcome addition to the fold, too.
On the same day an adviser came forward and said that he had contacted the insurer after it emerged that 800,000 Aviva clients had been underpaid due to a technical glitch, only to be told Aviva has no way of checking who was owed compensation.
They added that no point of contact had been set up to deal with the case. This story started off badly and appears to be getting worse.
