Pete Matthew: The importance of selling up without selling out


I read with great interest Carl Lamb’s recent piece about the sale of his firm Almary Green to Standard Life’s advice arm 1825. In it, he eloquently explains the rationale for the decision to sell and argues the old distinction between restricted and independent advisers is changing. He even goes so far as to say he believes “the vast majority of firms will follow down the restricted route”.

Like many successful firms we are approached regularly by prospective buyers and, while we have no intention of selling up in the immediate future, these approaches do get you thinking.

Some firms local to us have been sold to national consolidators recently. We have picked up clients from these firms, who tell us service was declining while costs were being raised and that investments placed only recently were being switched (read: churned) onto the consolidator’s preferred platforms.

We all know what is going on here. The consolidators have one eye on a flotation in the not-too distant future; a nice exit for the bosses and a nice-enough exit for the small practice owner in the short term.The problem is the client becomes a pawn.

If I ever do sell my practice to a larger company I would like to continue living in West Cornwall  and not have to move away to avoid bumping into the clients we have sold out.

“If I do sell I would like to continue living in West Cornwall and not have to move away to avoid bumping into the clients we have sold out”

We have agreed we would only consider a sale to a firm that was truly aligned to our way of doing things and which would honour the relationships we have built over 42 years. It looks like this is what Almary Green has found in 1825, so I hope the integration proceeds well for all concerned.

I have also been mulling the benefits of independence versus restricted advice in the new world and I agree with Lamb entirely, even though we have no current plans to take this route ourselves.

For years, advisers believed their worth was in broking products to meet clients’ needs but, mercifully, that is old news now. Indeed, I once threw a Standard Life rep out of my office for repeatedly referring to us as brokers despite me asking him not to. In this age of the internet, with infinite information just a mouse-click away, there is little value in being brokers of products. There will always be a website or app that will do a more complete job at a fraction of the cost it would take me to do the same thing.

At the same time, products have become increasingly homogenised and commoditised, so there is not actually that much to choose between them. It comes down to costs, usually, and that information is freely available to anyone with the will to look.

I am convinced the vast majority of clients just need an Isa and a pension, with a passive, multi asset portfolio. Where is the broking to be done there? Instead they need coaching, planning, hand-holding, educating and sense-checking. I can do all of this equally as well as a restricted adviser, which is why I would not rule out this route if it ever became the best thing for us and our clients. I think Mr Lamb might just be right in his prediction. What about you?

Pete Matthew is managing director of Jacksons Wealth Management