Tavistock Group has agreed to buy Standard Financial Group, the holding company of advisory firm Financial Limited, after the network admitted it was facing cashflow troubles.
Tavistock Group announced it had conditionally raised a minimum of £2.7m to provide additional capital for the acquisition.
Subject to regulatory and shareholder approval, Financial’s current management team, including managing director Brian Galvin, will retain their roles within the new business.
Mr Galvin said: “The deal with Tavistock underlines the strength of our operating model and the transfer of ownership marks the beginning of an exciting new era for our business.”
Brian Raven, chief executive of Tavistock Investments Group, said: “We intend to invest in both people and services for the benefit of clients, employees and advisers.”
The acquisition would create a business with more than 300 financial advisers and 65,000 clients in the UK with a combined turnover of approximately £30m and an estimated £3bn in assets under advice.
The announcement followed the publication of accounts warning of cashflow issues, which revealed that Financial Ltd made a £120,481 loss for the financial year of 2014, up from a £28,193 loss for the previous year.
The 29-page document, Financial Limited Financial Statements 31 March 2014, noted: “The directors have considered the company’s cashflow requirements during the year and the potential impact of the recent recruitment ban imposed by the FCA.
“The directors are in discussion with a third party over a potential invesment into the group.”
Last week it was reported that Norfolk-based Greensky Wealth had left the network to become directly authorised.
One of the firm’s advisers, Bob Wilson, cited frustration at the speed of networks’ processes. But Financial Ltd managing director Brian Galvin defended his organisation’s standards and processes.