CompaniesAug 16 2016

Embark chief pledges Rowanmoor capital and tech boost

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Embark chief pledges Rowanmoor capital and tech boost

Embark chief executive Phil Smith has promised cash injections into Rowanmoor, but pledged its business will not change following his group’s acquisition of the self-invested personal pension provider.

The takeover means Sipps Hornbuckle, Rowanmoor and Avalon all now fall under the Embark Group umbrella, following the deal last month.

Mr Smith has now spoken out about his plans for the business, with a pledge to maintain Rowanmoor as it is.

“Rowanmoor is a really established business it has a great franchise in the IFA space,” he stated.

“All we will do is improve the business through technology and capital.”

He claime Rowanmoor is “probably one of the best businesses in this sector for its technical expertise and its ability to look at complex assets”.

“We will invest in their technology, their reach and their brand and will keep on growing it.”

Mr Smith continued that Rowanmoor could have carried on itself, but was a complimentary fit with the scale of Hornbuckle, adding that the existing fee structure would also stay the same.

“The client proposition works - there’s no reason to change it - the fee structure for Rowanmoor is in the right space in the market, it has a nice margin and it is competitive - there’s absolutely no reason to go and disrupt any of that sort of thing.”

Alan Chan, director at IFS Wealth & Pensions, said that typically, consolidators do not immediately impose changes to newly acquired businesses in order to promote a period of stability and certainty.

“It’s noteworthy that Rowanmoor was recently given a C rating in terms of financial strength by Finalytiq. Having said this, it appears to have sufficient level of regulatory capital and liquidity to meet the FCA’s new capital adequacy requirements,” he said.

“Like most consolidators in the financial services, once they have acquired enough businesses, I think there will come to a point in the future when they will want to bring them all together under one unified identity; examples include Royal London, ReAssure and so on.

“In doing this, the fee structures and products of all its acquired businesses will invariably need to be realigned. But it’s probably still early days in its consolidation process, so it may be some way away before we begin see big changes.”

ruth.gillbe@ft.com