Wealth manager Tilney spent £1.7m in 2018 on assessing potential targets it wanted to buy.
Tilney has been heavily acquisitive in recent years, and in 2018 acquired the wealth management business of Moore Stephens and also Index Wealth Management.
On Monday (August 20) it confirmed that it is in negotiations with Smith and Williamson about a possible merger.
In its annual accounts for 2018, published on August 16, Tilney chief executive Chris Woodhouse, wrote: “Costs of £1.7m were incurred in assessing potential transactions including the successful acquisitions of Index Wealth Management and the wealth management business of Moore Stephens.”
He added: “We continue to explore opportunities to augment existing growth with acquisitions. The UK wealth management profession remains highly fragmented and we see the burden of regulation on small to medium sized firms as a key driver of further consolidation.”
The £1.7m figure was much higher than the £400,000 spent on the same activities in 2017.
In the year before that, 2016, Tilney acquired rival firm Towry for £600m.
Tilney spent £6.8m in 2018 on the cost of integrating previous acquisitions, including the cost of sourcing them.
In total, the company had one-off costs of £7.2m, with the cost of complying with new regulations introduced during the year also contributing to this figure.
Those one-off costs were sufficient to push the firm into a steeper loss for the year. The company lost £14.3m during the year, up from £10m the previous year.
Tilney made an operating profit of £22m before the one-off items and other items took affect.
It had net inflows of £549m during the year and total assets under administration of £23bn in December.
The company said 90 per cent of its new business was from organic sources, that is, excluding the assets that came into the business from acquisitions.