Novia Financial with one of its significant shareholders, Cocoon Investments, has acquired a 2.5 per cent stake in advisory group Tavistock Investments for £250,000.
Novia and Cocoon have also provided Aim-listed Tavistock Investments with a £750,000 loan, of which any outstanding balance after three years can be converted into shares in Tavistock at a fixed price of 7.5p.
From the total £1m paid to Tavistock, Novia contributed 75 per cent and Cocoon contributed 25 per cent.
Under the new agreement, Tavistock Wealth has endorsed Novia as a preferred platform, and following on from this Novia will introduce advisers to Tavistock on a selective basis.
Tavistock Wealth will grant Novia-supporting independent financial advisers access to its centralised investment proposition, which is otherwise only available to advisers that have joined the Tavistock Partnership.
Tavistock Partners has also agreed to make its ‘retirement guarantee’ available to any such firm at a time of their choosing, the firms said in a statement.
Bill Vasilieff, Novia’s chief executive, said: “The trend for the consolidation of IFA firms has accelerated post-RDR. We like the Tavistock proposition for advisers and anticipate making an excellent return from our stake in the business.
“The deal adds real value to Novia-supporting advisers by obtaining a very attractive retirement option for them, one with preferential terms to those otherwise available. However, the end client will be the real beneficiary, protected from a potential advice gap, by assured continuity of advice in the event that their adviser retires from the market.
“The consolidation market is expanding rapidly and will keep doing so.”
Brian Raven, chief executive of Tavistock, said: “Novia is one of our platforms of choice because it offers market-leading functionality that fits well with our processes. Novia has also demonstrated a willingness to work with us for the benefit of our retail clients. We anticipate introducing substantial assets onto the Novia platform as our business expands.”
The strategic relationship follows the acquisition by Tavistock Investments of Country Life and Pensions and Blacksquare.
Blacksquare was rebranded to Tavistock Wealth and Country Life and Pensions was rebranded as Tavistock Partners.
Following on from this, Sterling McCall completed the acquisition of the assets of two IFA businesses in a deal that will take total assets under management to more than £400m.