Wealth manager Bellpenny is targeting several more IFA acquisitions from solicitors and accountancy firms this year after buying the IFA arm of accountants Foot Davson.
Bellpenny bought Foot Davson Financial Services for an undisclosed fee gaining its 850 clients and £60m funds under management. It will continue to offer advice to all existing clients and continue to receive referrals from Foot Davson accountants for new customers.
Foot Davson says the balance of commercial risk now favours a partnership with a wealth manager and Bellpenny is the long-term solution.
Bellpenny chief executive Kevin Ronaldson says: “Now the dust has settled on the introduction of the RDR and the realities of a more onerous regulatory framework have sunk in, we expect more professional services firms to follow Foot Davson’s lead.
“For the majority of accountants and solicitors, the business case for operating their own financial planning operations has become far harder to make in the new environment.”
Bellpenny acquisitions and sales director Dominic Rose expects the firm to make several more acquisitions this year and says it is already negotiating with several other accountancy firms and would welcome more approaches.
IFA firm Frenkel Topping, which takes referrals from solicitors, says by partnering with wealth managers, professional services firms can mitigate risk but share in revenues.
Chief executive Richard Fraser says: “I cannot understand why any solicitor or accountant would want the risk of running an IFA arm in the current environment and I do not see how they can make it profitable.”
Informed Choice managing director Martin Bamford says: “Professional services firms will increasingly need to focus on their core competencies and we expect to see many jettison their financial services arms following the RDR.”