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Transact's Taylor says IPO no tool to 'buy clients'

Transact's Taylor says IPO no tool to 'buy clients'

Transact chief executive Ian Taylor has distanced himself from rivals who have bought up customers in mergers and acquisitions, saying the decision to float his investment platform on the stock exchange is not a prelude to becoming a consolidator.

Transact's parent company Integrafin, essentially a holding company solely for the investment platform, was today (27 February) valued at £649m as it prepares to float on the London Stock Exchange on 2 March.

But speaking to FTAdviser after the market price was revealed, Mr Taylor said advisers' clients invested with Transact will be spared the rocky ride of heady expansion witnessed among its peers.

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“One of the ways I shall measure the success of the float is if our staff and clients do not notice any difference," he said.

"We have no current plans to be a consolidator.

"I have long taken the view that you can’t buy customers, we want to win customers who think our service is the best, not because they have a contract with a firm we have bought.”

Consolidation has been a feature of the platform industry in recent years, with Aegon acquiring giant Cofunds in 2016 to merge with its own Arc platform, and Standard Life buying Axa’s Elevate platform, also in 2016.

Since then, Aegon has confirmed the Cofunds brand will vanish, and its clients integrated fully into Aegon's existing platform. Aegon chief Adrian Grace told FTAdviser in August the combined assets of the two platforms were £107bn. 

Standard Life said it intends to keep its platform brands separate from Elevate''s. Their combined assets in November were £50bn.

Aegon paid £140m for Cofunds, with Mr Grace saying only the biggest platforms will be profitable in the future.  

But Mr Taylor emphasised Transact's initial public offering (IPO) was done to provide liquidity for existing shareholders, some of whom will sell shares, and no fresh capital has been raised.

Mr Taylor was tight-lipped on the specific future of the business.

However he revealed implementing the EU-wide Mifid rules has used up quite a lot of resource, “and not added a great deal for clients directly".

"Now we can use that resource to  improve client experience in other ways. I have some ideas for that, which we will reveal when the time is right.”  

David.Thorpe@ft.com