Intrinsic is to buy adviser business Positive Solutions from Aegon with the provider taking a 7 per cent stake in Intrinsic as part of the deal.
Money Marketing revealed the move online last week, which will see Positive Solutions retain its brand and senior management.
Intrinsic chief executive Richard Freeman says: “The acquisition of Positive Solutions marks a genuine step change for the Intrinsic Group and a significant milestone in our journey.”
Positive Solutions chief executive Peter Coleman says: “Now with the backing of Intrinsic we will continue to implement our strategic plan: to improve the appeal of our proposition to benefit our customers and help our partners make their businesses more profitable.”
Aegon bought a 60 per cent stake in PosSol in 2002 from chief executive David Harrison and bought out the remaining 40 per cent in 2005 from staff, directors and IFAs in a deal that valued the company at £163m. In 2005 the firm suffered £27.2m losses after paying out £47.5m through its Prophitshare incentive scheme.
The Aegon distribution arm, which includes Origen, Positive Solutions and a 20 per cent stake in Tenet, posted a combined loss of £2m for 2012. Pos Sol posted a £2.3m profit for the year.
Origen and PosSol made a combined loss of £6m in 2011 and lost £5m in 2010.
By taking on Positive Solutions 850 advisers Intrinsic increases its total adviser headcount to around 3,000.
The firm currently has 2,150 advisers in the UK made up of 600 advisers in its independent arm, Intrinsic Independent, around 500 advisers in its restricted arm, Intrinsic Financial Planning and around 1,050 mortgage and protection advisers.
Intrinsic posted a £5.2m profit for 2012, up 62 per cent from £3.2m in 2011. The network also set aside over £2m in relation to expected complaint settlements, compared to a provision of just over £1m in 2011.
Last July, Intrinsic went through a capital restructure which saw the firm’s management buy out shareholder Lloyds Banking Group. As part of the deal, other major shareholders Sanlam and Friends Life, as well as Intrinsic management, agreed to waive six years worth of dividend payouts thought to be worth around £20m.
EA Solutions director Minesh Patel says: ”I am not sure the network model can survive in the adviser charging world. To have 3,000 advisers means you have to commoditise advice and I am not convinced clients want to pay a fee for that.”