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Wealth managers respond to merger talks

Wealth managers respond to merger talks

Wealth managers Tilney and Smith & Williamson have confirmed they are in "exclusive" talks to merge and manage a combined £45bn in assets between the two companies. 

Yesterday (August 18) FTAdviser's sister publication the Financial Times reported Tilney was in talks to acquire its rival, following a failed bid for the top ten accountancy firm in 2017. 

Both companies have now confirmed the talks, claiming a merger would create a "market-leading" wealth management and professional services firm. 

A Tilney spokesperson said: "Following recent media speculation, the board of Tilney confirms that it is in exclusive discussions with Smith & Williamson about a potential combination of our businesses.

"A merger of Tilney and Smith & Williamson would create a market-leading, integrated UK wealth management and professional services group with over £45 billion of assets under management."

The spokesperson said a further announcement would be made "as and when appropriate".  

In this year's annual accounts Smith & Williamson, which provides investment management, tax, financial advice and accountancy services, reported a pre-tax profit of £40.3m and funds under management of £21.4bn. 

As of March 2019 Tilney reported assets under management of £24.4bn, which would see a mammoth total of £45bn in assets under management if the two wealth managers merged. 

A Smith & Williamson spokesperson said: "Further to the announcement by AGF Management Ltd to the Toronto Stock Exchange yesterday (18 August) regarding its shareholding in Smith & Williamson, the board of Smith & Williamson confirms that it has received an approach and is in exclusive discussions about a combination of its business with Tilney Group.  

"The respective boards believe that a merger of Smith & Williamson and Tilney has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm."

The spokesperson said discussions between the two companies remain ongoing and there was "no certainty that a transaction will proceed" at this stage.

At the end of last year Smith & Williamson announced its stock market listing would likely be delayed until 2020 after a review of the company's progress.

It had previously stated the plans would not materialise until it had completed its "major investment" in new technology platforms.  

The plan to list the wealth manager came after the company held unsuccessful negotiations with Rathbones about a merger in 2017, which Tilney attempted to join with a rival bid. 

In 2016 Tilney bought rival advice group Towry at a cost of £600m, in a bid to extend its network of financial advisers around the country and for Towry's predominant financial planners to complement the large number of investment advisers at Tilney.

The deal came just two months after Tilney, then known as Tilney Bestinvest, claimed rumours it was lining up a £700m deal for Towry were “pure speculation”.

rachel.mortimer@ft.com 

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