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Advisers doubt Baker Tilly’s advice appetite

Graham Sellar-Abbey

Accountancy firm Baker Tilly may return to the IFA sector through the acquisition of RSM Tenon but advisers doubt the firm much appetite for it. 

Baker Tilly, which sold its financial services arm to Towry in 2007,  announced last week that it had begun due diligence on RSM Tenon and has until 22 August to bid for the accountancy and advice firm.

RSM Tenon had £80m of debt in December, according it its last accounts. Any deal could be “significantly below” its share price, which halved after the announcement, from 3.49p to 1.71p.

In 2011 RSM Tenon was involved in a dispute with its PI insurers over a £4.3m FSA settlement for missold Lehman-backed structured products and unsuitable pension switching advice.

FortyTwo Wealth Management owner Alan Dick says: “I struggle to see why Baker Tilly would be interested in the IFA arm. There are very few accountancy firms where an integrated financial advice practice has worked.”

Murphy Financial associate Adrian Murphy says: “I can understand the accountancy business is attractive with economies of scale but the potential advice liabilities may be hard to swallow and it is not Baker Tilly’s core business.” 

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Went to see one of my clients last night who has just sold his business. Tenon were involved in the sale and at some point they took their “adviser” to see him.

    I couldn’t believe that they told him that he shouldn’t pay off his oustanding £350,000 mortgage (interest rate of 5.36%), he’s also a higher rate taxpayer, as they could get him a better return if he invested the money with them into funds that IFA’s couldn’t access.

    And their charge for all of this? £15,000!!! My client told them where to get off and they said they could do it at a special rate of £10,000. He told them where to go.

    The point being is if that is the type of advice they’re offering then it’s no wonder the FCA has concerns. It will be no wonder when Baker Tilly fire them off either.

  2. Ex employee of Tenon 2nd August 2013 at 10:35 am

    You are missing the point, IFA business of Tenon is a small part, Baker Tilly will want the Recovery and audit arms of the business.

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