An estimated 30 advisers left Tavistock's network in the last financial year with the group continuing its recruitment drive for "quality not quantity", its chief executive has said.
In the group's financial results for year ended March 2019 published this morning (May 15), Tavistock said it "successfully encouraged" a number of "poorer performing" appointed representative companies to leave the group last year.
Speaking to FTAdviser, group chief executive Brian Raven said the group now has 185 IFAs within the network, with 30 leaving over the year while another 15 joined.
Mr Raven said: "I have always described us as 'fussy' in terms of the businesses we acquire, and we’re probably even fussier about the advisers we retain.
"So we went through a process over the last 12 months of reviewing firms on an individual basis within our Tavistock partnership, so that’s the network with third party appointed representative firms, and agreeing with those who we felt should move elsewhere that they would do that."
Tavistock acknowledged this selective process had contributed to gross revenues in its advisory business falling by 11 per cent, from £25.2m to £22.5m, in addition to the "added burden placed upon advisers by the introduction of Mifid II".
But the group stated it wanted to "appropriately match" the regulatory risk associated with its advisory business against "potential commercial reward".
Mr Raven said Tavistock was still looking to recruit, but with an emphasis on "quality rather than quantity".
He added: "From an operational perspective the nature of the advice business is higher risk and lower reward than the investment management operation and that's purely down to the weight of regulation post the Retail Distribution Review and Mifid II, so we just need to tread carefully, which we try very hard to do."
Mr Raven said he would like to take the company's funds under management from £1bn to £3-5bn over the next three to five years, with the current figure sat at £945m following a 9 per cent increase during the year.
He said: "I think we do that through a combination of factors. Building up our own advisory business is not what I see as the key driver of the asset management operation, it is partnership relationships such as the one we have with Lighthouse and the The Law Society.
"We are talking to other organisations of similar reputation, so big players who are interested in working with us either for a specific reason which might be they like our protected products or it might be they like the app and they want to use that to target a certain customer base."
Tavistock announced the official launch of its direct-to-consumer app this morning, which allows the client to open an Isa or a general investment account.
Mr Raven added: "There are various reasons why we're engaged with these conversations, so I'd hope every year we will announce a small number of new partnerships that exponentially increase our distribution capability."