Home
Distressed Businesses
  • All Distressed Businessess
  • Administrations
  • Liquidations
  • Winding Up
  • Insolvency Advice  New
Buy a Business
  • All Businesses for Sale
  • Find a Business for Sale
  • Raising Business Finance
  • Buyer Acquisition Service   New
  • Escrow Service   New
Sell a Business
  • Sell Your Business
  • List your Business
  • Seller Accounts
  • Need Help Selling?
  • Help With Finance New
  • Corporate Services  New
  • Business Valuation
  • Business Wanted Adverts
Insights & News
  • View All News
  • View All Insights
  • Exclusive Insights New
  • Video Insights
Lens
  • Search all UK Companies  New
Log in
Join Now

Home / Insights / Wealth Management Firms and Small Lenders Turning to Acquisitions

Wealth Management Firms and Small Lenders Turning to Acquisitions

INDUSTRY INSIGHTS


UK wealth management firms are facing the challenge of achieving growth in a static market from Chris St Cartmail


Wealth management firms are discovering that the easiest way to grow their assets under management is to merge with or buy another firm. Meanwhile, smaller mortgage lenders may soon be turning to M&A in response to a lack of cheap funding from the Bank of England.


Wealth managers hit by pension reforms

Back in 2015, sweeping pension reforms came into play that gave the public more control over their own pension pots. As a result, the demand for financial advice has soared. Which may first seem like good news for wealth managers. However their fees are putting a lot of potential investors off - particularly following new regulations that require wealth managers to be more transparent about what they are charging for their services.

This has left wealth managers increasingly reliant on referrals from financial advisors and the sums they are being asked to manage are more ‘Middle England’ than ‘millionaire’. Therefore, growth has become somewhat hard to come by.


M&A as a pathway to growth

Unsurprisingly, wealth managers are now buying up advisory firms as a way to grow their assets under management. A recent example is the purchase of Ascot-based Fund Management Ltd by Harwood Wealth Management Group for GBP1.1m. Fund Management brings with it some GBP34m of assets under influence and will continue to run itself as a separate firm to Harwood.


It seems that wealth managers who can count financial advisors as operating under their ownership enjoy improved profits. Paul McGinnis, an analyst at Shore Capital told the Financial Times: “Many [wealth managers] are acquiring or buying their own financial adviser businesses instead … Companies are building up their financial planning [businesses]. But those who do risk treading on the toes of the advisers who refer them clients. It is a balance.”

He added that Brewin Dolphin had increased the number of in-house financial advisors as well as launching two specific financial advice services. This was partly possible due to its 2017 takeover of Duncan Lawrie Asset Management for GBP28m. Following its change of focus, the firm reported a 15 per cent rise in profits to GBP57.6m in 2017.

Consolidation is also a major theme within the wealth management sector in response to the changes in the market. After finding it difficult to attract new customers, Rathbone Brothers announced in April that it was looking to buy Speirs & Jeffrey, which would help it to reach its growth target of 5 per cent. Without the purchase it risks missing its target of having GBP40bn of assets under management by the end of the year.

Small lenders also driven to M&A by major policy shake-up
Meanwhile, changes to the way the Bank of England supports lenders has led some analysts to predict a surge in M&A within the sector. The news that Clydesdale and Yorkshire Bank’s parent firm CYBG is looking to take over Virgin Money for an estimated bid of GB1.6bn has prompted Cavendish’s head of financial services, Duncan Chandler, to predict a rush of deals.

He explains that smaller challenger banks are suffering as a result of the removal of the cheap funding offered by the Bank of England. A slowdown in economic growth has also left small operators feeling the pinch. Chandler stated: “We expect a fresh wave of consolidation among smaller lenders to arise as economic uncertainty continues and cost pressures rise and this should be a key trend in financial services M&A over the rest of this year.”


Conclusion

Financial services business owners looking to sell should be aware of these trends and can potentially cash in on the fact that M&A has become a popular means of growth for financial businesses of all sizes. For those looking to buy, on the other hand, now is obviously a great time to acquire a financial services business that can help boost your business at a time when organic growth is sheer hard slog.


Share this article



Latest Businesses for Sale

Supply Chain Specialist In The Oil, Gas & Industrial Sectors
UK Wide

Operates in the supply chain of spare parts and equipment, offering cost-effective solutions to clients operating within the international oil, gas and industrial sectors. Provides procurement support and a supply chain solution to engineering, const...

Asking Price: Offers Invited
Turnover: £9,400,000

FREEHOLD


Smart Meter Installer
North of England, UK Wide

Offers a first-class service in smart meter installations. Has completed over 500,000 meter installations at a completion rate of 85%, higher than the national average. Has the experience required to manage complex projects for clients and boasts a s...

Asking Price: Offers Invited
Turnover: £1,690,000

RELOCATABLE


Specialist In The Sale Of Machinery, Parts Sales & Heavy Haulage
UK Wide

A group of businesses which specialise in the sale and service of machinery, parts sales and heavy haulage. Established for over 45 years and highly respected within its sector. Benefits from strong client retention rates with some relationships last...

Asking Price: Offers Invited
Turnover: £2,300,000

LEASEHOLD



View more businesses for sale

Search Insights

Latest Insights

One-third of UK businesses close to running out of cash

DISTRESSED BUSINESSES

The outlook for SPACs in the UK

INDUSTRY INSIGHTS

Capital Gains Tax – The proposed changes and what they could mean for business sales

INDUSTRY INSIGHTS

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Insight Categories

  • - For Buyers
  • - For Sellers
  • - Distressed Businesses
  • - Industry Insights
  • - Sector Guides

View all insights

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources

Become a Member

About Us

Business Sale Report is the UK's leading independent business for sale & distressed business listing service. Established in 1995, the report offers an up-to-the-minute, comprehensive overview of businesses for sale, latest distressed business listings and daily acquisition news.

Our Services

Businesses for Sale
Distressed Companies
List a Business
Help with Finance
Buyer Acquisition Service
Daily Financial Alerts
Small Businesses for Sale

Company

About Us
Insights
News
FAQs
Reviews
Terms & Conditions
Privacy Policy

Get In Touch

020 8875 0200
[email protected]
167 Oakhill Road, London, SW15 2QW
Working hours: Mon-Fri, 9am - 5:30pm


Sign up to our free newsletter



© 1995-2021. Business Sale Report Ltd. All rights reserved. www.business-sale.com.