Financial Services Newsletter - Friday 4th March 2022

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Financial Services News

National advice firm LEBC has returned to profitability after two years of losses, following its exit from the defined benefit advice market. In its annual accounts, LEBC recorded an operating profit of £799,061 for the year to September 2021, compared to a loss of £370,975 the previous year. The profit is still small compared to the £4.3mn operating profit it recorded back in 2018.

Abrdn narrowed net outflows in 2021 to £6.2bn to post a rise in Assets Under Management, and reported a 6% increase in revenue for the first time since its merger with Standard Life. AUM climbed 1% in 2021 to £542bn, from £535bn in 2020, which abrdn attributed to positive market movements, the impact of corporate actions and net flows. The Asset Manager announced fee-based revenue for the full-year 2021 of £1.5bn, up from £1.4bn in 2020, a 6% increase, while IFRS pre-tax profit rose to £1.1bn, up from £838m the previous year, in what abrdn CEO Stephen Bird called its "reset year".

FNZ has secured US$1.4bn (£1.03bn) in new equity funding from Canada Pension Plan Investment Board (CPP Investments) and Motive Partners (Motive). In an update the platform technology provider said the fund raising means FNZ is valued at more than $20bn. Among other things FNZ is known in the UK for its attempt to purchase rival technology firm GBST that fell foul of the Competition and Markets Authority (CMA).

Quilter Cheviot is proud to announce a partnership with the WealthiHer Network, alongside a new webinar series around International Women’s Day aimed at boosting female financial empowerment.

Paraplanning has become a profession in its own right, according to Carla Brown – Managing Director of Oakmere Wealth Management. Speaking at the fifth annual Chartered Symposium, hosted by St James’s Place (SJP), she said paraplanning was once seen as a steppingstone into financial planning. But this is no longer the case, with lots of people now remaining paraplanners for the duration of their careers. Brown said Paraplanners were a “crucial” part of the planning team. It is important that Paraplanners feel able to challenge the advice of the Financial Planners they work alongside, she added.

UBS, East Capital, Carnegie Fonder, Danske Invest and Liontrust have become the latest groups to shutter or temporarily freeze Russia, Eastern Europe or emerging Europe funds in light of the Ukrainian conflict. It is reported that JPM Asset Management was among the first to cease trading, with measures imposed on its Russia and Emerging Europe Equities funds in the morning of 28 February. Several more groups cited the closure of the Moscow Exchange to foreign investors as the primary driver for suspending dealing.

Lloyds Banking Group (LLOY)is planning to launch a new digital service combining banking, insurance, advice and investment products targeted at the mass affluent market. The tailored investment and advice proposition will be aimed at customers with wealth or annual income above £75,000, and will provide products such as higher-value mortgages.

Pre-tax profit at Rathbones nearly doubled last year to £95m from £48.3m, as the firm bounced back from the lows of 2020 and reaped the benefits of its recent acquisition strategy. The company said it would increase spending on an ongoing tech makeover to £40m over the next two years. This compares with its 2021 tech spend of £9.2m. Rathbones said it would keep its operating margin within the ‘mid-20s’ while the new investment was underway, and would aim to return to a margin of between 27%-30% from 2024.

Advice giant St James’s Place (SJP)has reported its profits soared by 50% last year, as the total spend on its Bluedoor platform project reached £610m. SJP’s underlying profits jumped to £401m in 2021, a 50% increase on 2020’s £264m. The firm has subsequently proposed a final dividend of 40.41 pence per share, making for a full-year dividend of 51.96 pence per share.

Walker Crips has opened a new branch in Fareham, Hampshire to serve clients in the south of England. The Solent office opened in early February 2022 with the aim of allowing the firm to expand its financial planning reach. 

Coutts’ spending on tech, staffing and marketing surged by more than a fifth in late 2021, lifting the full-year costs almost 8% higher to £38m. In full-year numbers released by parent group NatWest, the private banking division attributed the increase ‘principally due to investment in digital infrastructure and an increase in headcount related to the enhancement of AUMA [Assets Under Management and Advice] growth propositions.’

Octopus has become the second-largest shareholder in Mattioli Woods, displacing the firm’s Founder and Chief Executive Ian Mattioli. The Asset Manager spent around £6.5m purchasing almost 800,000 Mattioli shares late last week, lifting its stake in the firm from just over 6% to 7.3%. At Friday’s close, the stock was valued at 800p. Octopus now sits behind the largest shareholder Liontrust with a 7.7% interest and ahead of Mattioli on 7.05%.

David Ross, one of the Founders of Carphone Warehouse, has snapped up a 9.9% stake in WH Ireland. The stake was done through Ross’s investment vehicle Mountain Berg. The vehicle did not previously own a disclosable interest in the business. The transaction, which amounted to the purchase of 6,145,000 shares, took place on 9 February, according to a Stock Exchange announcement. Shares in the tightly held stock traded at 45.5p throughout the day, giving Ross’s purchase a value of £2.8m. Shares are currently sitting on 45.8p.

The FCA has confirmed it is cutting discretionary bonuses for all staff from next year but new measures will ensure staff who meet performance targets will receive a 5% pay rise in April. The regulator also announced there will be no base salary rises for CEO Nikhil Rathi and the Executive Directors this year.

Tilney Smith & Williamson will rebrand to Evelyn Partners in a move to reflect that the Wealth Manager is now one firm off the back of the business’ integration. The move will see two of the oldest brands in wealth management vanish. Smith & Williamson was founded in Glasgow in 1881, while Tilney was founded 180 years ago. The name Evelyn Partners was inspired by Evelyn Gardens, the London address where one of the firm’s Founders developed plans to expand the business in 1893. 

Julius Baer International has opened a new office space in London to accommodate future growth and to reduce its carbon footprint. The Swiss private bank’s UK division will relocate to Greville Street in Farringdon, London, from its current base in St Martin’s Le Grand at the start of 2023.

Mergers & Acquisitions

Financial Planning and professional services firm Progeny is to acquire Chartered Financial Planning firm RU Group. The deal will boost Progeny’s Assets Under Management to over £3bn and is subject to FCA approval. RU Group are wealth management and retirement specialists. The firm has a team of 48 employees based in offices in Nottingham, Derby and Sheffield. The cost of the deal has not been disclosed.

Aviva has acquired national advice firm Succession Wealth for £385m. The company said the acquisition, announced in its financial statements, ‘enhances our position in the fast-growing UK wealth market and accelerates our ability to offer high-quality financial advice to six million of our workplace and individual pension and savings customer.’ Following the deal, which is subject to FCA approval, Succession’s CEO James Stevenson will continue to lead the business.

Kingswood has acquired Hampshire-based Aim Independent, taking the group’s total Assets Under Administration (AUA) to £9.1bn. The consolidator will take on £217m in AUA from Aim, as well as five Advisers and six other staff.  The business will be acquired for a total consideration of £3.6m, with £1.8m paid on completion of the acquisition and the remainder payable over two years.

In further news...Kingswood has bought Essex-based IFA Joseph Lamb for £15.3m, as it seeks to establish a hub in the region. The consolidator will take on £393m in Assets Under Advice overseen by the Adviser, which was established in 1970. The deal will see £7.65m paid on completion of the acquisition and the remainder paid on a deferred basis subject to the business meeting performance targets.

Movers & Shakers

Sanlam has confirmed that Penny Lovell, Chief Executive Officer of Sanlam Private Wealth, has stepped down from the role and is leaving the firm. Her departure follows the sale of Sanlam Wealth last year to private equity firm Oaktree Capital Management for £140mn.

Wealth Manager Tilney Smith & Williamson has appointed veteran wealth management professional Richard Stanwell as Investment Director. Stanwell joins the company from EFG Private Bank, where he has been Senior Director since 2018.

Abrdn has turned to Schroders Personal Wealth for its new Head of Financial Planning, Sarah Deaves, a former Coutts Chief Executive Officer. Deaves joined Abrdn from SPW where she was Managing Director of Client Relationships and Wealth Advice.

UK-based advisory firm Wren Sterling has appointed James Twining as its new CEO. Twining joins the firm from specialist insurance Broker Kingsbridge Group, where he was CEO for the past four and a half years.

Fintech business Wealth Wizards has appointed two new members to its executive team, to help drive the company’s growth plans. Mark Kiddell joins as Chief Commercial Officer from Mercer, and Ben Hampton joins from Abrdn as Chief Product Officer.

Schroders Personal Wealth, the Financial Planning joint venture run by Schroders and Lloyds Bank, has made a series of senior appointments to bolster its marketing team. Sean Ingram has been appointed as Chief Marketing Officer with Ed Colyer joining as Head of Product and Propositions and Dougy Watt as Head of Client Insights and Client Experience. Mr Ingram previously managed his own consultancy working with clients such as JP Morgan, Visa Europe, Coutts and most recently Openwork where he worked as its Marketing Strategy Director focusing on revenue generation. Mr Colyer was recently a Consultant for Scottish Widows and prior to this he was Head of Proposition and Business Development at Close Brothers Asset Management. He has also led the proposition teams at Towry and Coutts. Mr Watt was previously Head of Insight and Planning at Openwork. He has also held roles at Bank of Scotland, Royal Bank of Scotland and was a Lecturer at The University of Glasgow.

In further news...Schroders Personal Wealth (SPW)has bolstered its board with the appointment of ex-Barclays Stockbrokers’ boss Rupert Dickinson. Dickinson, who spent almost two decades with Barclays until his retirement in 2018, has taken up a Non-Executive role with SPW.

Clarion Wealth Planning has a newly expanded team to strengthen its commitment to true lifelong financial planning for clients. The Alderley Edge firm has improved its financial planning power by 20% with four new appointments; Chartered Financial Planner Ella Davies, Associate Financial Planner Jebun Kazi, Robin Townsend, Clarion’s first Compliance Director and joining the Adviser Client Support team, Isabelle Spencer.

Brown Shipley has made a raft of hires from Barclays Wealth & Investment to boost its eastern regional presence. The team will be led by Simon Smith, who has 34 years’ experience, most recently as Regional Director for the eastern region at Barclays Wealth & Investment Management. He will be joined by eight of his former Barclays Wealth & Investment colleagues: Kevin Nevard, Paul Marshall, Mark Turner, David Vernon, Luke Caraccio, Warren George, Mark Harrod and James Haynes. They all join as Client Advisers. 

Close Brothers Asset Management (CBAM)has appointed a former Head of Standard Life Aberdeen’s (SLA) platforms business as its new Chief Executive. Eddy Reynolds will take up the position at Close Brothers’ investment management arm from 7 March, succeeding Martin Andrew.

7IMhas hired Brooks Macdonald’s Head of Group Risk Jana Sivananthan. The hire follows news that Brooks Macdonald made a £300m bid for 7IM, which was rejected at the end of last year. The firm has been tipped to renew its interest at some point this year. Sivananthan joins 7IM as Chief Risk Officer after four years at Brooks, where his role covered all areas of risk management, including credit risk, operational risk and ICAAP.

National advice group True Potential has hired around 150 former Quilter Financial Planning (QFP) Advisers over the last 12 months. In the 18 months between January 2020 and 30 June last year, approximately 280 restricted and independent Advisers left the QFP network as a result of internal reviews into advisers’ productivity, which Quilter CEO Paul Feeney previously called ‘normal adviser attrition’. In the six months between December 2020 and June 2021, 141 left the Quilter network.

Phoenix Group has appointed Alastair Barbour, currently the group’s Senior Independent Director, as Interim Chairman from 1 September. He will stand in for a one-year term while current Group Chairman Nicholas Lyons takes up the role of Lord Mayor of the City of London for 12 months, beginning in November.

Abrdn has made two senior hires to its core infrastructure business. Based in London ,Will Cunneen and Priya Nair have joined the team as an Investment Director and Business Development and Strategy Director respectively. Cunneen moved to the firm in December from Macquire Group, where he was a Senior Vice President in the infrastructure M&A advisory team. Nair worked for 13 years at Royal Bank of Canada, where she was most recently Head of Origination and Product Management, leaving the firm in 2020.

River and Mercantile has appointed Matt Hudson as its Lead Manager of the ES River and Mercantile UK Equity Income fund as a replacement for Dan Hanbury, who resigned last week. Hudson previously worked at Schroders, where he spent seven years as a Fund Manager and Head of Business Cycle. He joined the firm via its acquisition of Cazenove Capital, where he was Director of Pan-European equities. 

Saltus has hired Handelsbanken’s Head of Wealth as Director of Financial Planning, as it seeks to expand its advice service. Alex Spreckley spent almost a decade at Handelsbanken, rising to head a team of 65 divisional wealth management staff. He previously worked at Killik and Origen. He is a Chartered Wealth Manager, in addition to being a Chartered and Certified Financial Planner.

Claire Trott, a Divisional Director at St James’s Place (SJP), has stepped down as Chair of the Association of Member-Directed Pension Schemes (AMPS).Martin Tilley, Director of WestBridge SSAS, has been appointed Interim Chair. Trott steps down from AMPS, the industry body representing Sipp operators and small self-administered Pension Schemes (SSAS) Practitioners, after three years in the role. She will not remain on the committee of the industry body.

Prudential Group Chief Executive Mike Wells will retire at the end of March and the group has said it will locate its next boss in Asia as it pivots to growth markets. Shriti Vadera, Chair of Prudential, said: ‘I would like to thank Mike for his outstanding contribution to Prudential over the last 26 years, and particularly as CEO for the last seven years.'

Anderson Strathern has hired veteran Adam & Co Banker Ken Davidson to open an office for the firm in Glasgow, joining his former colleague and now Anderson Strathern Chief Executive Graham Clark at the firm. Davidson joins following seven years at Adam & Co, which last year sold its wealth management division to Canaccord Genuity in a £54m deal.

Former Seven Investment Management Edinburgh Head Dennis McGrath has joined Brewin Dolphin. McGrath left 7IM in October, according to his LinkedIn profile. He had joined the business following its acquisition of Tcam in 2018.  He takes up the role of Investment Manager in Brewin’s Edinburgh office as the firm looks to extend its reach north of the border.

Rothschild & Co has appointed Alison Probert as a Director of its UK wealth management business to head the launch of a new regional office in Leeds. Probert joins from Barclays Wealth where she spent 11 years working across the north of England, most recently in Leeds and the surrounding Yorkshire area. 

St James's Place (SJP)has appointed Claire Blackwell to the newly-created role of Chief Client and Reputation Officer. Blackwell has been Marketing Director at SJP for the past three years, recently overseeing the brand's "refresh".

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All information provided in this Market Digest has been gathered from multiple Financial Services Media sources and individual company press releases.