A new consolidator headed by ex-Openwork CEO Mary-Anne McIntrye has set its sights on building a 300 adviser-strong business over the next five years.
The Socium Group, a private equity backed national independent financial advice group which launched last year, is looking to partner with advice firms’ management teams by taking a majority stake in their business.
Its latest deal saw the network buy Beaufort Group, a financial services firm with both an adviser network and discretionary fund management arm, in a deal which brought £1.1bn of assets under management to Socium.
Socium plans to build 15 to 20 successful ‘regional hubs’ — with eight expected by the end of 2020 and a further five in discussion — to create a “strong national footprint” with the aim of the client always being “within 50 miles of an office”.
It has grown steadily since its launch last year to now boast £6.25bn assets under influence.
The venture is backed by private equity firm Penta Capital, which has provided an acquisitions warchest of £160m to acquire IFA businesses across the UK.
Penta Capital said it had invested in Ms McIntyre's firm to carry out a “buy and build” in the UK independent financial advice market which was the “least consolidated” of all financial services.
Its website says Penta’s aim, through Socium, was to create a “best in class advice business, providing superior service and value for money for the customer, with significant central support allowing the acquired businesses to focus on customer needs”.
Ms McIntyre headed up Openwork for five years — steering the business through the Retail Distribution Review — after time at Fidelity and Deloitte and later moving to Old Mutual Wealth.
Other industry stalwarts are also on board, such as former finance director of Openwork and Intrinsic Financial Services Simon Brunt and ex-Quilter Cheviot boss Martin Baines.
Ms McIntyre said: “The strategy for Socium has been to work with growing firms aiming to double their businesses over the next few years, becoming hubs at the heart of the group.
“Beaufort Group embodies this approach, as a successful, growing, client focused business.”
Derrick Dunne, chief executive of Beaufort Financial, said he was “extremely excited” about this deal, which enabled the firm to bring its growth strategy to fruition and offer succession and buy-out options to its existing partners.
He added: “Socium shares our belief in high-quality, adviser-led financial advice, so we are delighted to be working with Mary-Anne and her team on further enhancing what we have to offer and building one of the leading financial advice firms in the UK.”
Mergers and acquisition activity in the adviser industry, and broader UK wealth management, has increased over the past few years, primarily driven by regulation, an ageing demographic and increasing professional indemnity insurance costs.
Recent data showed funds spent on larger mergers and acquisitions in the IFA market jumped by more than 100 per cent last year to £249m, and the pattern of consolidation has shown no sign of abating since.
imogen.tew@ft.com
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