Tavistock’s chief executive has laid out his immediate order of business as being integrating recently-acquired businesses, rolling out automation of advisory systems and then looking at further acquisitions.
Speaking to FTAdviser, the financial services group’s boss Brian Raven explained that the deal to buy Standard Financial Group, the holding company of troubled network Financial Limited, meant several more months of work, as in addition to the transferring advisers there are 48 full time and 10 part time staff to integrate.
At the end of January, Tavistock Group announced it had conditionally raised a minimum of £2.7m to provide additional capital for the acquisition, which followed the publication of accounts which revealed that Financial Ltd made a £120,481 loss for the financial year of 2014, up from a £28,193 in 2013.
Despite a diving share price, shareholders unanimously supported the deal, which Mr Raven said was conditional on “firm commitments” to the Financial Conduct Authority to continue past business reviews and handle claims outstanding on pensions and Ucis.
Last July Financial Ltd were handed a trading ban by the regulator for failures on control of appointed representatives, with fines of over £13m only escaped due to having insufficient funds.
Mr Raven commented that as far as he was aware there were no more legacy issues coming through from Financial Ltd and the deal was only done due to the “extremely good job” done by chief executive Brian Galvin since taking over.
In order to avoid similar situations, as well as improving adviser productivity, was given as the reason for the second order of business; automating systems.
“Automation ensures a consistency of service and oversight and will help advisers be more productive as they won’t have to re-key so many forms,” said Mr Raven. These back office improvements are already underway and should be rolled out through 2016.
The third point of business concerns the group’s appetite for more non-organic growth, with Mr Raven noting that they have already built up a prospect list and that he is sure there will be deals announced over the next 18 months.
“We’re currently around £3bn worth of assets under advice through roughly 300 advisers, so ideally in the next few years I’d like to hit £5bn and 500 advisers, but that’s not the be all and end all.”
The group is now split into three, with Tavistock Financial being the new home of the “majority” of Financial Ltd network members that have chosen to move across, according to Mr Raven, while Tavistock Wealth runs the investments and Tavistock Partners consists of larger advisory businesses bought along the way.
The latter include Duchy Independent Financial Advisers, which are also still being integrated after a £500,000 deal in May, along with Sterling McCall, which was acquired around this time last year.
These firms are offered a ‘retirement guarantee’ which is non-binding, but gives directors an “obvious exit route”, according to Mr Raven. This consists of a buyout split 50/50 between a consideration in cash and shares.
These advisers also have access to the Tavistock Wealth discretionary fund management service, with ‘Acumen’ passive funds and the managed portfolio service which uses a variety of active managers.
“We have no plans to run bespoke portfolios, it’s purely discretionary”, said Mr Raven, adding that as the investment partners all have different approaches, the internal team invests heavily in its own research to produce monthly performance reports. “This ensures consistency and gives advisers a like-for-like basis to rate investments and discuss changes with clients.”
peter.walker@ft.com
