M&G plans to pump investment into acquisitions to grow Sandringham Financial Partners and attract more advisers to the business.
Speaking to FTAdviser, David Montgomery, managing director of M&G Wealth, said as Sandringham’s parent company, M&G will provide financial backing to the firm to be able to make acquisitions and grow its independent advice business.
Montgomery said the firm had no plans to acquire any further standalone IFAs.
He said: “We see Sandringham as our growth opportunity to acquire and draw advisers into the network moving forward and Tim, the management team that is there, the brand etc will be the vehicle to do that.”
M&G announced yesterday (August 18) that it had bought Sandringham and confirmed the business will be kept independent with its chief executive Tim Sargisson continuing to lead the firm.
Once the deal is completed the firm will sit within M&G’s wealth division alongside its existing advice, platform and investment businesses.
M&G has plans to reach a target of 1,000 advisers under its wealth arm with an equal split across independent and restricted.
It also plans to launch a hybrid advice service later this year.
Currently, M&G Wealth has about 200 advisers in its restricted advice business and yesterday’s deal sees it add a further 180 independent advisers, nearly doubling its advice footprint.
“Our ambition is to grow both our restricted advice business and Sandringham through the investment we are going to make and push up to 1,000 advisers overall,” said Montgomery.
He added: “When we were out speaking to advisers in the market about whether they would join a restricted advice business we found it doesn’t fit everybody's desires as an adviser.
“They want to remain independent so we knew we then had to create that independent advice capability or network so we could attract advisers into that part of the network.”
Consolidation of the market
Sandringham's was not the only provider-adviser deal that has happened in recent months.
JP Morgan Chase acquired digital wealth manager Nutmeg, Rathbones bought Saunderson House in a £150m deal, and Clifton Asset Management completed the purchase of Southsea-based advice firm Leonard Gold Financial Management, as it eyes an additional four acquisitions this year.
Montgomery said the M&G deal should be welcomed by the market as they are not a private equity firm but instead a provider who will make a stable parent company.
“We want to play in this space,” he said. “We've been very clear about our ambitions to grow M&G Wealth, and we've got the financial capital to do that so we're going to continue to grow in this space.”
He acknowledged there was a push for vertical integration and that M&G was part of this through its advice model and platform offering.
But he said that was not the only thing the firm was focused on.
Montgomery said: “We are improving our platform for all advisers who want to use it, not just our own advisers.
“We want our platform to be available and we're investing heavily in the Ascentric platform that we purchased.”
He added: “With things like hybrid advice, if we build that tech out and it's successful, we will look to make it available for other advisers to use. So we're trying to create a capability that we can use right across the market.”
amy.austin@ft.com
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