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Skipton FS looks to grow in cash deals

Skipton Financial Services says it is lining up further IFA acquisitions as part of its aggressive growth strategy.

It recently acquired Parnell Fisher Child and believes consolidation is key to the survival of adviser firms after the retail distribution review.

Managing director Simon Holt says he believes Skipton is an attractive parent because of its acquisition strategy. It only pays cash and takes a 75 per cent stake, with the remaining 25 per cent held by the adviser firm’s management team.

Holt says: “We have a great acquisition model. We think that by ensuring the management team of the firm we buy keep 25 per cent, they have a vested interest. We think it is a supportive plan to help them grow value in their businesses.

“We only pay cash. We do not agree with paying part equity, share options or promising future value. We want to be financially strong and are not after future promises. I cannot see the sense in this unless providers want to put influence on the management team to use their wrap, for example.”

Holt says Skipton has 19 subsidiary companies in financial services and wants this figure to continue growing.

He says capital is vital and he is already moving the business away from a reliance on high initial commission towards a recurring income model.

Holt says: “We stopped taking high initial commission in January, seeing low initial as having a positive role. We have strong capital and want to see the potential for long-term gain.”

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