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Skandia set to sell two 5% stakes in Bankhall

Skandia is selling two 5 per cent stakes in Bankhall to rival product providers while looking at other acquisitions in the IFA sector.

The life office is believed to have instructed a merchant bank to offer stakes in the IFA service company to other product providers.

It paid £150m for 86 per cent of Bankhall last December. Skandia says it will retain a 75 per cent holding.

Analysts believe that Skandia wants to dilute its stake before Misys soaks up market demand for IFA firms with the flotation of its IFA business which is planned to happen within the next two years.

Any sale would bring into question the strategy of product providers taking sole ownership of IFAs, which some industry commentators argue does not sit well with a successful IFA business model.

Bankhall has over 2,000 member firms comprising around 6,000 RIs with a total turnover of over £400m. Seventy-five per cent of its member firms are directly regulated.

Bell Lawrie analyst Ian Macarthur says: “When Misys comes to the market in 18 months to two years they will force down the price of all IFAs. If Skandia wants to divest their Bankhall stake they will want to do it before then.”

Skandia head of product marketing Peter Jordan says: “We have been approached by two product providers who want to invest in the Bankhall growth story. We only want to sell stakes of 5 per cent per investor.”

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