Your IndustryJun 29 2017

Ex-Bankhall chief on who will escape FCA action

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Ex-Bankhall chief on who will escape FCA action

Harwood Wealth Management will not be affected by the Financial Conduct Authority’s study into vertically integrated firms because it does not have its own platform, according to its chairman.

The Aim-listed consolidator today (29 June) posted gross profits up by 63 per cent to £4.9m for the first half of its year.

But yesterday (28 June) the FCA expressed concern about conflicts of interest at vertically integrated firms, such as Harwood, in its final report into the asset management market.

The regulator will investigate the issue further as part of its study into the platform market.

But Peter Mann, former chief executive of Bankhall and now chairman of consolidator Harwood, said while his new company has a discretionary fund manager and a range of multi-manager funds, it did not compare itself to some other vertically integrated firms.

He said: “People are free to choose amongst those options or they are free to choose none of those options.

“Whilst we offer the opportunity to vertically integrate, it is very different to institutionalised vertical integration because it is not one single offering.”

He also pointed out that Harwood does not operate a platform, which he said was one of the areas of concern the FCA had.

Mr Mann, the former chief executive of Skandia UK, added that Harwood does not currently intend to get into the platform market.

He said: “I ran the largest retail platform in the UK for a long time and the barriers to entry in that marketplace are high, as you can see from the replatforming costs.

“It is not currently in our strategic intent to become a platform services operator as a principle part of our business.

“There are perfectly good platform services operators whose services we use, including my old one.”

Mr Mann, who was also vice chairman of Old Mutual Wealth, said Harwood has made 57 acquisitions to date and declined to put a limit on how many more purchases it could make.

He said: “We don’t see any economic or regulatory imperatives that are anything other than a positive headwind for us.

“IFA firms are still looking to exit. In the early days we were aggressive hunters but it is very pleasing that as our listing and our brand has grown more and more people are coming to us.”

damian.fantato@ft.com