Moneygate in talks to buy 22 businesses

13 October 2011 | By Paul Thomas

Moneygate says it is in advanced acquisition talks with 22 IFA firms and has set aside £1.4m for buyouts, as it posts a loss of £1.3m.

The firm’s 2010 accounts, published last week, show Moneygate’s loss increased from £666,000 in 2009 to £1.3m last year.

However, Moneygate says it plans to acquire ” a large proportion” of the 22 firms over the coming 18 months. It says it will add a further £6m over the next six to nine months to raise a total acquisition war chest of £7.4m. The 22 businesses comprise more than 135 advisers, £37m in turnover and £3.2bn in client funds under management.

In July, Moneygate acquired Equus Independent Financial Management and, in August, it bought Results Financial. In June 2010, it bought Beacon Asset Management.

At the end of 2010, Newcastle-based Moneygate had 44 qualified IFAs under contract, up from 32 at the start of the year. Chief executive Lee Hartley says the results reflect heavy investment in staffing resources in order to build a foundation for further acquisitions in the coming 18 months. He adds that the firm is well placed to meet the requirements of the RDR.

Hartley says: “We have all our IFAs on track to gain the required diploma status ahead of the deadline and have developed a robust customer proposition that enables advisers to efficiently make the transition to a revenue model that is based towards fee and trail income.”

AWD Chase de Vere head of communications Patrick Connolly says: “In the run-up to the RDR, firms will have to look at their size and strength and whether they are in a viable long-term position. Many will decide they are not, so we will continue to see consolidation up to the end of 2012.”

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