Tavistock chief curbs M&A to hunt for advisers

Tavistock chief curbs M&A to hunt for advisers

The chief executive of advice network Tavistock has said he plans to focus on hiring more advisers and marketing its discretionary services, rather than continuing its shopping spree for firms.

The company's string of takeovers has caused many to view Tavistock as a consolidator, but Brian Raven told FTAdviser he has now turned his attention to recruiting more advisers into newly purchased business, Abacus Associates Financial Services.

The number of advisers working for Abacus now stands at 67, up from the 44 advisers the business had when Tavistock purchased it back in April.

This number is expected to grow, and Mr Raven pointed out that it is more cost-effective to recruit advisers than it was to buy an entire advice firm.

He said it was a coincidence that the company had completed two acquisitions in each of the past three years, describing Tavistock as “extremely fussy” when it comes to buying other businesses. 

“We will still look at acquisition opportunities and probably always will, but the main focus now is on organic growth,” he said, adding Tavistock has essentially been focused on building its distribution network up until now.

Mr Raven also said he would be open to taking on asset management firms, although he acknowledged this would be a “harder fit” with the current business and its investment strategy.

“It’s possible but there aren’t that many small asset management firms available.”

“It’s easier to manage quality in a smaller operation; it shouldn’t be but it is,” he said, adding he can be more comfortable with the due diligence on a company which has one or two principals overseeing everything.

The firm is also looking to offer Tavistock Wealth’s discretionary services to advice firms and is currently in talks with a number of businesses.

Mr Raven said Tavistock now had information on thousands of firms, adding it was likely he would end up doing business with half a dozen businesses a year.

Tavistock suffered an operational loss at the end of September last year, but at the time Mr Raven said he planned to improve the efficiency of the group’s existing businesses and cut costs where possible.

Losses during the firm's last financial year had been blamed on ‘restructuring’ costs associated with its £2.7m acquisition of Standard Financial, the parent of failed network Financial Ltd.

While he was unable to give a forecast, Brian Raven pointed to broker notes which expect Tavistock to make a profit in the next financial year.

Despite recent losses, the firm has seen funds under management balloon, helped partly by recent acquisitions.

While Mr Raven said it would be difficult to continue this pace, he admitted he would be disappointed if Tavistock does not show “considerable growth” over the next year.