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AWD looks for buys after ‘phenomenal’ turn-round

Stephen Kavanagh

AWD chief executive Stephen Kavanagh says the firm is now in a position to acquire adviser firms in the run-up to the RDR, after posting improved results for the first nine months of this year.

Earlier this month, AWD Chase de Vere’s UK division reported earnings of £3.9m in the first nine months, a sharp increase from £500,000 in the same period in 2009.

Kavanagh says the firm’s German parent, AWD Holding, is now making noises about making capital available to the UK division to look at small acquisitions in 2011 and 2012.

He says 2010 has been “a phenomenal” year for the company.

Kavanagh took on the role of chief executive in December 2009 from Mike Kirsch, who left in March that year. Kavanagh had been national sales director at the firm since 2006.

The firm has had a difficult couple of years. In addition to Kirsch’s departure, the firm was also fined £1.12m for pension misselling and there were a lot of redundancies in 2008 after the company made a loss of £7m. It was forced to go back and repay customers who were missold but refuses to reveal how much was paid out.

Kavanagh says AWD is now in a good position to consider acquisition opportunities, particularly in the SME area.

He says: “We will be in the ball game and if the right opportunity appears, whether it is small, medium or large, we would want to be in that race. I would much rather pick off small four or five-person teams and we feel that will be a good hunting ground for potential acquisitions in the next couple of years as concerns over exams and capital adequacy take hold.”

AWD is also looking at organic growth of its adviser numbers with the launch of its own academy in the first half of next year. Kavanagh says the hope is it will bring through between 10 to 30 advisers.

He says: “We have recognised we need to grow our own and because we have a robust training and development arm we are quite confident that area could give us 10, 20 or 30 young bucks next year. If that proves to be the case, then the initiative will continue as a way to supplement our numbers and raise our level of service.”

AWD has recently seen a shake-up of its management team, with marketing director Martyn Laverick and operations director Robert Organ leaving the firm while five new executives have been appointed – Andy Papadopolous, Phil Andrews, Peter Russell, Param Basi and Daniel Baade.

Kavanagh says: “This was about having the right jockeys on the right horses. I knew we had a lot of strength in depth in the company and this was also a bit of drive to have my own team and infrastructure in place.”

He says the early signs are these appointments are proving successful for the firm, which is also looking to roll out both a client and investment proposition in the first half of 2011.

Exams remain a priority for the firm, with 60 per cent of its 183 advisers now at QCF level four, up from 47 per cent in April 2010. Kavanagh says the company also has a number of advisers that are only one or two exams away from level four. He says all AWD advisers have their own bespoke training programme to bring them up to level four and ideally the company would like to bring them up to chartered status, which helps them deal with lawyers and accountants.

He says: “The only issue facing us on the qualification front is the gap-filling requirement. Some of our most qualified people are looking at this and it is pretty stiff. Our average age at the firm is only 37 and I would be disappointed if we lost any of our people because of qualifications.”

The technology drive is continuing as the firm tries to free up more time for advisers to spend with clients.

The company appointed focus:360º to deliver a technology system to enable advisers to deliver financial planning and employee benefits advice across a full range of product areas.

Kavanagh says: “We just want to build on what we have done this year. Our turn-round has been significant and our profitability is going to be north of £5m in 2010. Next year, we want to consolidate on what we have achieved, add the academy and get the client and investment propositions off the ground.

“This year has been a phenomenal launchpad for profitable growth. Moving into 2011 and 2012, if we can bolt on the odd acquisition I think we are in really good nick.”


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