IPS Partnership owner IFG Group could sell the James Hay wrap after it takes over the firm in February in a deal worth £35m.
The Sipp specialist revealed last week that it is set to buy the firm from Santander. IFG is proposing to raise £45.3m from shareholders.
IPS, which has 8,000 Sipp clients and 1,700 with SSASs, will take on James Hay’s 33,000 Sipp clients. IPS will eventually be rebranded James Hay.
But IPS managing director Tim Sargisson says the firm is undecided on whether the wrap business will be retained.
He says: “We are Sipp experts, not wrap experts, so we will have to look very closely at that. It is really too early to say whether we will keep that side of things.
“I am prepared to keep a completely open mind at this stage with regard to the other bits of the James Hay business but we will have to take a good, hard look at it when we get in.”
IPS and James Hay will be run on separate platforms. Sargisson says integrating the systems would be the “kiss of death” for both businesses.
He says he is confident that the firm can make a success of the takeover.
He says: “James Hay is a market leader that has lost its way and we feel we can make success of it. I would love to give Standard Life and AJ Bell a run for their money.”
There is a lot of loyalty within the IFA community for James Hay. It is a good brand but it as become tarnished over the past few years.
“The business has some very good systems and excellent people but it needs a bit of direction and strategy, which perhaps has not been forthcoming from its current owners.”
A Santander spokesman says: “Santander has reached an agreement to sell its Sipp and wrap provider. James Hay is not core to the bank’s long-term strategy. The sale is part of Santander’s ongoing focus on its retail and corporate banking operations.”
IFG will hold an extraordinary general meeting on January 4 to approve the deal.