Your IndustrySep 21 2021

Fintel eyes businesses with adviser customers

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Fintel eyes businesses with adviser customers

Fintel joint chief executive officer Matt Timmins has said the business wants to buy more firms which have advisers as their customers as part of its growth strategy.

In its half year results today (September 21), Fintel, which recently rebranded from The SimplyBiz Group, reported a 10 per cent growth in revenue and a 12 per cent increase in adjusted Ebitda, which the firm put down to its acquisition of Defaqto last year.

Revenue stood at £31.7m for the six months to June 30, up from £28.9m last year. 

Speaking to FTAdviser this morning on the back of the results, Timmins said: “The combination of Simplybiz and Defaqto together is a really powerful force and has helped us grow.

“We've had a 52 per cent increase in the first half of the year in the usage of the Defaqto fintech system so more and more advisers are using the engaged platform to give advice to clients and growing that either incrementally through adviser firms or through big enterprise deals like the Tatton deal, is a key part of that.”

However, he explained that outside of that, M&A in the tech space remained an opportunity for the firm.

“It’s always an option given the strength of the balance sheet. We’ve had 14 transactions in the past that we are well used to buying and selling businesses, buying more than selling. There are some great businesses out there.

“At this moment in time, there isn’t anything on the agenda but we are well positioned to do it. We are looking at businesses in the tech space and we are looking at businesses where we can acquire a customer set of advisers, similar types of businesses to us.”

He added: “We've had two disposals this year already, a rebrand and a significant amount of work to do so I think we’ll take a breather for a few weeks.”

This comes as in its full year results for 2020, Fintel said it could take advantage of “selective and appropriate acquisition opportunities” following a successful year.

In the full year results for the 12 months to December 31, revenues of £61m were recorded. In comparison to the £62.8m received in 2019, this meant revenues dipped by a mere £1.8m during the pandemic.

During the pandemic bosses at the group took a pay cut as the company froze salaries and bonuses.

More partnerships ahead

Last week, Tatton Asset Management bought the Verbatim funds from Fintel, formerly known as Simplybiz, for £5.8m.

As part of the transaction, Tatton entered a five-year strategic distribution partnership with Fintel which will provide it with access to 3,800 financial intermediary firms and its 6,000 Defaqto users.

Speaking on the deal, Timmins said the deal was simply about “two businesses playing to their strengths”. 

“Tatton is a fund management business and we are a fintech and support services business so we came together and came to the conclusion that they would be the right the right owner and a great custodian of the Verbatim funds that would run the funds well for the benefit of advisers, which is what they do with their own model portfolios, and that they and their clients would benefit from our fintech put in right at the heart of the business.

“It's a real collaborative deal, the first major partnership we've done and partnerships are always more difficult to navigate than a simple buy or sell arrangement because you want to make sure that both parties are inextricably linked to each other's success.”

Timmins said while it was early days, the firm was already onboarding Tatton’s clients to its fintech and the asset manager was actively running the Verbatim funds.

The Fintel boss said the firm sees more of these partnerships coming in the future.

“The world of retail financial services has changed and in the past the old sort of network versus national versus partly authorised firms those days are gone. 

"We collaborate more than we compete at the moment and the important thing is to play to each other's strengths so where there are great businesses who are national network businesses who provide good services to customers, rather than try and compete with them on the support services side, we will look to partner with them and provide them with technology, data insights and regulatory services that help those businesses.

“I guess the list of people that we are talking to, engaging with, having partnership conversations are all the people that you would imagine, the larger businesses, those networks, consolidators.

“I think you're going to see real change over the course of the next six months and in the way that our part of the market operates."

sonia.rach@ft.com

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