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Fairstone cuts £1.4m to honour bonuses

Fairstone cuts £1.4m to honour bonuses

National advice firm Fairstone is honouring all bonuses and pay rises amid the coronavirus lockdown after cutting £1.4m in costs from the business. 

Lee Hartley, chief executive at Fairstone, told FTAdviser the company was also not considering any redundancies as a result of the savings it had made through reducing non-essential spending across marketing, external consultancy and travel. 

Mr Hartley said: "We are seeing the real benefit of the decision to cut what is effectively peripheral spending and protect the core, so operationally we are doing very well.

"Interestingly some departments are working even more effectively, particularly around para-planning, software development and file checking - they are working unbelievably efficiently from home."

The advice boss said the company's performance during lockdown would "definitely dictate" how it uses office space in the future.  

Many firms in the financial services sector have been forced to reconsider bonuses and freeze salaries as a result of the coronavirus outbreak and national lockdown, with bosses at a number of advice firms taking voluntary pay cuts amid increasingly challenging commercial conditions. 

But despite the pandemic Mr Hartley said Fairstone remained firmly on the acquisition trail, with the consolidator on track to complete ten deals through its downstream buy-out model this year. 

In the first quarter of this year three companies were acquired using the model, which sees Fairstone take a stake in an advice firm before integrating and then purchasing it. 

Mr Hartley said: "We are not seeing any change in our acquisition programme nor our appetite to acquire the firms that are all scheduled for this year coming through our integration pipeline.

"Realistically speaking we are going to have a slight delay, so maybe some of the deals that we planned to do towards the back fo this year, might fall over into the early part of next year but really that’s the sum total of the impact we are envisioning.

"Every single acquisition we have scheduled for this year we are still planning on completing."

Deal activity in the advice industry has seen a split response to the pandemic, with some businesses pushing ahead with acquisitions and others taking a more cautious approach and pausing their pipeline. 

In March Ascot Lloyd confirmed new deals were still part of "business as usual" despite the market turmoil and last month new-entrant consolidator Independent Wealth Planners told FTAdviser it was eyeing a pipeline of 20 deals undeterred by the pandemic. 

But elsewhere in the market Tavistock Investments and Attivo Group have both put deals on hold. 

rachel.mortimer@ft.com

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