View more on these topics

Is the price right?

The first month of this year became a time for the value of IFA businesses to be debated around water coolers and in wine bars.

The highly respected Keith Carby and top-producing IFAs of Foster Denovo are to buy out their company from Tenet, with the price unknown at the time of writing. We watched Towry Law being bought by John Scott & Partners for £37m in May last year and now we hear Hargreaves Lansdown has been put up for sale with a price tag of £600m.

Foster Denovo grew from a traditional IFA model, originally called Capital Planning and Finance.

Having worked with the guys, may I say they were a pleasure to work with and we had a laugh a minute. This time taught me that the provision of independent financial advice can be fun for clients while maintaining professional standards. Building on the success of the early days, the 130 Foster Denovo RIs now average over £200,000 turnover a year – no mean feat as this is way above the national average.

With the merger of John Scott & Partners and Towry Law near completion, JS&P Towry has just imposed a minimum of £100,000 of assets available to be invested before it will give independent advice.

This will lose hundreds of clients who will be obliged to find alternative advisers and I hope they will find other IFA firms that will provide comparable service and advice.

This is one reason why the services of IFA Promotion are so important in finding IFAs who match the needs of the individual or corporate client.

Hargreaves Lansdown is respected by commentators for many different reasons. For me, it is the firm’s activity back in the 1980s when it was the first IFA (yes, I know it is execution-only) to understand the importance of direct marketing to clients in a language they understood.

It provided the general public with information about products while politely nudging them towards its preferred funds. I worked hard and long hours in the advertising agency which handled its marketing activity and the results are obvious. It now has more than 500,000 clients, with 325,000 being active.

In my mind, another reason why Hargreaves Lansdown has such an impressive price tag is its early vision on wrap platforms. Having looked around at what was available, Peter and Stephen decided to build their own platform – Vantage. Yes, it can be criticised that it does not have all funds and wrappers but it does have a whopping £7.6 bn in assets on the platform – more than American Express achieved and more than the new wraps on the block.

My good friend Brett Davidson of FP Advance tells me that there are over 50 wrap platforms in Australia but the top five wraps are dominant, with many white-labelled versions tagged on to the front of IFA firms.

Many IFAs Down Under believe that because they have a wrap offering and are moving towards trail-based remuneration, the value of their businesses will be worth around 10 times profitability. The reality is that if these firms put themselves up for sale, they may be disappointed by their valuation price.

If wrap offerings are to be done properly, there needs to be simple due diligence undertaken by IFAs. The back office, middle office and client segmentation needs to be right before a wrap front end is attached to the business. No point owning a Porsche if you cannot drive.

Kim North ( is director of Technology and Technical.


Dunstan Thomas to provide systems to Friends Prov

Technology provider Dunstan Thomas will be providing systems to Friends Provident to give its new generation policyholders access to a range of income drawdown options as an alternative to standard annuity settlements at maturity.The work will also include building Dunstan Thomas’ own systems into Friends Provident’s existing new generation pensions administration platform enabling it to […]

Growing concerns

Continued consideration of the appropriate wrappers for a growth investment.

Rooftop hit by Fitch’s latest predictions

Fitch Ratings has piled on more pressure on lender Rooftop by stating it expects its already-troubled second portfolio of securitised mortgages to continue drawing on its reserves.The agency predicts that Farringdon 2 is likely to continue to seek help from its reserve fund in the coming months. The news comes three weeks after it plugged […]

Auto-enrolment: tips for employers

The Pensions Regulator (TPR) has released advice on communications for employers, including three tips to help you with your auto-enrolment duties. 1. Allow enough time to select your pension schemeIt’s recommended that you start to prepare for auto-enrolment at least 12 months in advance of your staging date; additionally, give yourself time to choose the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm