Cavanagh chief executive Andrew Fay is looking to build on the professional focus of business after the group's takeover of Ernst& Young Financial Management.
Fay says he wants to exploit the synergies of the two companies. Cavanagh is strong in the legal sector in London and the South and is now targeting lawyers in EYFM's traditional territory.
EYFM, which will be branded Cavanagh, has focused on advising the accountancy profession in Scotland and the North of England and will be looking to move that expertise South.
Since announcing the deal last October, Fay's biggest task has been to extract EYFM from its parent, accountancy firm Ernst & Young.
He says: “There was a massive amount of work to extract the data. A lot of EYFM clients remain Ernst & Young clients as well so it was a painstaking process making sure that we had all the data we needed. We also had to set up new offices for the EYFM staff.”
Two former EYFM branches, now branded Cavanagh, remain in Ernst & Young's premises in Newcastle and Glasgow but new offices have been found for former EYFM advisers in Edinburgh, Aberdeen, Manchester, Leeds, Birmingham, Bristol and London.
The firm retains a preferred adviser arrangement with Ernst & Young for the referral of clients.
The cost of these new premises and the extraction of EYFM from its parent have accounted for a proportion of the difference between the £4.5m raised from the City and the £3m acquisition cost.
But Cavanagh believes it now has a national structure of well-motivated high-earning advisers working in a business that has weathered the difficult times better than many firms, posting a loss of £77,000 on turnover of £3.47m for the year to October 31, 2002.
Founded by Fay in 1996, Cavanagh's turnover has grown rapidly by aiming at solicitors and barristers.
Fay set up the firm with Simon Redgrave and Neil Millard, both coming from a direct-sales background at Royal Life. With the firm advising only a small proportion of the 44,000 lawyers working in London alone, Fay believes this targeted approach still has a lot of scope.
The EYFM deal gives the firm a foothold in the accountancy sector but Fay wants to expand to other professions. He says: “We are here to advise professions. At the moment, we are strong in the legal profession but we expect to expand into other professions as we get bigger.”
At the end of 2002,Cavanagh's turnover stood at £116,000 per adviser and has since grown to £139,000 while the 36 EYFM advisers average £175,000 each.
Fay says the company is unlikely to make further acquisitions in the foreseeable future, adding he feels he would have to go a long way to find another firm as good a fit as EYFM.
However, he is keen to expand beyond the current 94 RIs by recruiting staff. Fay says: “We are looking for advisers, particularly in the London area but also across the rest of the country, who are used to dealing with high-net-worth individuals.”
He sees fees as the future for the firm, not surprising when the majority of clients are themselves used to charging clients.
At present, the majority of turnover from EYFM advisers is through fees but Cavanagh still operates mainly on commission.
Fay predicts strong pension business across the firm but does not see any specific product area as important, with advice being the product the firm has to offer.
The firm sees a commitment to independence as a key part of its service. Fay says: “We shall be giving advice across the whole of the marketplace. We have a strong reputation for advice and it is important for us to remain independent. Our clients would expect it.”