Old Mutual Wealth  

Old Mutual flags holes in advice consolidators' takeovers

Old Mutual flags holes in advice consolidators' takeovers

Vertically integrated consolidators need to “do their research” to avoid dealing with unhappy advisers and clients when they buy independent businesses, Nigel Speirs has said.

The managing director of restricted adviser Old Mutual Wealth Private Client Advisers said he finds out what a firm’s “religions” are and, if they are firmly committed to independent advice or he doesn’t buy them.

He said instances of deals falling through because the advisers did not want to become restricted were evidence that a company “did not do their research properly”.

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In September Standard Life and Almary Green pulled the plug on a deal that would have seen the independent financial adviser become part of the provider's 1825 restricted advice business after they “mutually agreed” to end discussions.

In the months between the deal being announced and it being scrapped, four advisers are understood to have left Almary Green while two served their notice.

Mr Speirs said: “My first conversation with someone is to understand what their religions are.

“If they believe they add value by doing research on the whole of the market then one shouldn’t acquire them.

“We want our guys to differentiate themselves by the advice, not necessarily the solutions.

“I don’t think there is value in that because ever since we got platforms it is very difficult to differentiate at product level – the real differentiator is advice.”

In last month's paper on the asset management industry, the Financial Conduct Authority raised questions about the vertically integrated advice model, stating they had a commercial interest in distributing their own products.

Mr Speirs said since Old Mutual Wealth had been buying up advice firms, to his knowledge one client had left after their firm had been bought while no advisers or staff had handed in their notice.

Last month Old Mutual Wealth bought a Cheshire-based advice firm for an undisclosed sum, which followed two previous acquisitions.

Mr Speirs said this week his firm had gone past £1bn in assets and early next year would be buying a Birmingham-based hub for the business.

He said: “2017 will be an important year because that will be the year we prove the model. At the moment we have just acquired the firms.

“I am not really finding it competitive. We have probably got a lot more people that want to be part of our world than we can buy.

“The beauty of Old Mutual is we are building a business that should last for 100 years.”

damian.fantato@ft.com