Investments  

Firing Line: Peter Hall

Firing Line: Peter Hall

Private equity has made its presence felt in financial adviser firms in the past few years as a number of private equity investors have bought financial planning businesses, built them up and sold them on.

Two companies this has happened to, at least in part, came together last year – Tilney Bestinvest and Towry. Now the dust has settled and the brand has changed to simply Tilney, Peter Hall, the company's chief executive, is looking for more acquisitions.

He said: "We are looking for a different type of acquisition. We're focused on acquiring smaller financial advisory businesses across the UK, that share our belief in high levels of professionalism."

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Tilney Bestinvest, as it was then, agreed to buy Towry for £600m last year, a deal that brought the company many more financial advisers. It now has 220 financial planners and 140 investment advisers, across 30 offices around the country.

Mr Hall is actively looking for more that could fill geographical gaps left after the deal, and is in talks with six other firms.

Mr Hall said: "In Towry, there were more financial planners than investment advisers, and in Tilney there were more investment advisers than financial planners. Put it together and you've got a really good fit with financial planners and investment advisers around the country."

Tilney operates a two-expert approach, which means that every financial planning client will have both an investment adviser and financial planner looking at their case.

Mr Hall said: "We want to be able to help clients who have anything from £50,000 to more than £5m. At the lower end we have the online investment service, for Bestinvest clients, setting up a Sipp, for example; we have a big and expanding telephone service looking after clients who have over £75,000; and we've got 360 advisers for all face-to-face relationships, for client with more than £150,000. We can help a very broad range of clients." 

Mr Hall was brought in by Bestinvest's former owner, 3i Group, another private equity company – which had already bought Bestinvest from its founder John Spiers – in 2010. Bestinvest then merged with Tilney in 2014 after Permira bought Tilney from Deutsche Bank in the previous autumn.

This approach to deal-making on the part of private equity firms, which often look for an exit with a substantial profit after three years, has led some to believe that this type of owner of financial advice businesses has a shorter time horizon than more conventional owners – be it public shareholders or owner managers – which could affect the strategic direction of the business.

Mr Hall said: "I don't believe this at all. We have a much longer time horizon, because we're able to invest for a much longer time frame. We've put lots of money into investing in systems, we have all the resources to make these acquisitions, and these are investments that really will build up the firm to be the best it can be over a five to 10-year timeframe. It's a long payback.