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WH Ireland targets acquisitions after cutting wealth management losses

WH Ireland targets acquisitions after cutting wealth management losses

WH Ireland's wealth management arm has sharply reduced its losses, allowing to set a renewed focus on buying firms. 

In the six months to the end of September 2021, the wealth management division lost £166,000 on an adjusted basis, down from £456,000 in the same period the previous year on a like for like basis.

As recently as the 2018/19 financial year, the division lost £6m, which is when Steve Ford was hired to turn it around. 

The firm’s executive director said it was now focused on buying firms which have assets under management of less than £1bn.

The division had a turnover of £7.8m, up from £6.1m the prior year, while its assets under management were £1.6bn.

But overall it was still a drag on the performance of the wider group, which posted a profit of £1.1m. 

Ford said the improved financial performance of his business unit was attributable to a “mixture” of revenue growth, including from the acquisition of Harpsden Wealth Management last year, and cost controls.

He noted that while the acquisition of Harpsden meant 17 new staff joining his business, the overall headcount last year rose by just 12. 

He has set a target for the wealth management business to hit assets under management of £3bn within 2.5 years, which he said would “have to” involve some acquisitions.

Ford said: “We are focused on the sub-£1bn area of the market, and probably on the £250m to £700m area, as we think pricing in that area is much more reasonable than in other areas.

"We were able to integrate Harpsden successfully during the lockdown, I mean, we didn’t meet those people for eight months. But one of the reasons for the better financial performance is that we retained the vast majority of the Harpsden clients even as we were moving them to another platform.”

While the firm has cash on its balance sheet of £8.4m Ford said some of this will be needed to pay the final two instalments of the Harpsden purchase price, the first of which is due this month.

Ford said the wealth management division attracted organic net inflows of £43m, which had "followed a few years of outflows because of the losses we were making and the negative headlines". 

The firm attained chartered financial planner status in 2020, and also launched AIM inheritance tax and AIM EIS products.  

Ford previously worked at Brewin Dolphin, and was on the board of that company.

He said, at its current size, WH Ireland “cannot compete with Brewin Dolphin and its buying power [when it comes to funds] so we have to compete in another way.

"And I hope the way we can compete is by buying smaller funds and investment trusts that the larger firms can’t do, and by seeding the launch of new funds.”

david.thorpe@ft.com