Consolidation in the financial advice industry is expected, but firms must make sure the end client is not put at a disadvantage, according to chief distribution officer for Old Mutual Wealth.
Richard Freeman told FTAdviser if a consolidator does not feel that buying a firm is the right thing for the clients, then the consolidator should step away.
"What the regulator has been getting at is that you should not shoehorn clients into unsuitable investment products and you should not be moving clients into different solutions unless it is demonstrably better for them."
According to Mr Freeman, Old Mutual Wealth has a process when doing due diligence on an adviser business, whereby it does not just look at the business but also at the clients and whether the clients "are appropriate for our solutions".
"If we cannot have solutions appropriate for that client bank, then we will not touch the business", Mr Freeman said.
"We are comfortable that we are doing this the right way. We came into this space late and have taken learnings from others and we are satisfied that what we do for clients is good for them."
According to FTAdviser's metrics, Old Mutual Wealth is the third largest financial advice firm in the UK, but Mr Freeman believes there is still room to grow.
"Our scale allows us to invest in the business", he said. "Intrinsic has traditionally built the business through business as usual recruitment, so we a team of people who go out and recruit, but also along the journey we have acquired firms that have given us scale, such as Mint and Positive Soltuions, to the financial planning arm of Sesame Bankhall Group, as well as Caerus."
The Caerus deal has not yet completed, there are "few opportunities" around and, moreover, there will soon be a listing process with the separation of Old Mutual, so Mr Freeman said it was unlikely that Old Mutual Wealth would be continuing to target acquisitions actively over the coming months.
"It will be mainly organic growth" now, he said, although he added the firm would continue to keep a look-out for opportunities should the "right business" come onto the market.
One such opportunity was Shropshire-based Infiniti Financial Planning, the purchase of which Old Mutual Wealth announced on 6 April.
simoney.kyriakou@ft.com
