Acquisition opportunities in the advice sector have never been so abundant and Harwood Wealth plans to tak full advantage, its joint chief executive has said, as he ponders how to spend the £10m raised by the company’s recent stock market float.
Alan Durrant said the Hampshire-based independent adviser’s decision to list on the Aim at the end of last month raised £13.5m.
Of this, £10m will go back into the business as a war chest for acquisitions in what Mr Durrant said is an unprecedented buyer’s market.
“We have been involved in this as long as anybody and we have never seen as many acquisition opportunities as we are at the moment,” he said.
“Increasing numbers of IFAs say they would like their own platform, or they would like to have stronger compliance but they are not big enough to afford it and that’s pushing them towards the consolidation market.”
Mr Durrant said he has no firm timetable for his planned spending spree - “it is a question of going the right deals with the right people at the right price”, but he said Harwood would seeks balance between “coming back to the market every month” for new money and having “a lot of lazy cash on our balance sheet”.
Harwood talks to 10 businesses for every one it acquires, he said.
Since the company floated on the Aim on 29 March its share price has risen from 91p to 99p.
Harwood Wealth was founded in 2001 under the name Compass Wealth Management by Neil Dunkley who is joint chief executive with Mr Durrant.
In May 2015 the company bought Wellian Investment Solutions to expand its multi-manager offerings.
Mr Durrant said: “Vertical integration is a very big part of our story but at the heart of everything it has got to be right for the client.
“We have got a lot of advisers in our business who are independent and if they believe a solution which isn’t offered in-house is right for the client then absolutely, they should offer that.”
The businesses within Harwood, such as Compass and Wellian, have retained their original names and Mr Durrant ruled out bringing the whole company under one brand.
He said: “The businesses that our clients have been used to dealing with will retain their names, so if you are a Compass client you will remain a Compass client.
“These are the brands people are comfortable with and if clients say they are unfamiliar with the business we can say we are Wellian Investment Solutions which is are of Harwood Wealth Management Group which is a quoted business.
“That gives people comfort that there is a much more substantial company which sits behind each business they are dealing with.”
