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James Hay eyes discount deals for larger advisers

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James Hay chief executive Alistair Conway

James Hay has said it is prepared to discuss pricing discounts for “substantial IFA businesses” as parent company IFG Group eyes further acquisitions in the platform space.

Speaking to Money Marketing as IFG announced its 2016 results this morning, James Hay chief executive officer Alastair Conway says: “Our general model is not to go in on a discount basis. We stand by the pricing; we think it remains highly competitive even after changes. Day in day out, that wins us business.

“But when you work with a distributor, if there are economies of scale to be had you can pass them back to the end investor because you are creating efficiencies with firms.

“As we form relationships with more substantial IFA businesses, it makes good economies for the end investor, and advisers become more closely integrated with that and the pricing they get.”

Platforms such as Aegon and Praemium are said to offer deals to advisers based on either business scale or the speed in which assets can be moved onto the platform. However, others in the market including Nucleus are understood not to cut pricing deals with advisers.

IFG also owns IFA business Saunderson House.

Saunderson House reported an increase in assets under advice of 15 per cent to £4.6bn at the end of 2016, while James Hay’s assets increased 13 per cent to £22.1bn.

IFG chief executive John Cotter says he is not concerned about any potential conflicts between the two businesses as the FCA has hinted it had concerns with vertical integrated business models over the past year, describing the businesses as “complementary.”

The results predict that new capital adequacy rules will drive further consolidation in the market this year.

They read: “While we did not conclude any acquisition of books in 2016, we believe the changes to regulatory capital requirements in September 2016, and ongoing consolidation in the platform market, will provide further opportunities for acquiring books of business in 2017. The pace of these opportunities may accelerate as the new capital rules begin to impact.”

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