The boss of Standard Life-owned advice business 1825 is confident about the business’s future following the completion of the Standard Life Aberdeen merger.
The merger, which completed on Monday, has led to questions in the industry about how 1825 will fit into the combined business.
Speaking to Money Marketing, 1825 chief executive Steve Murray says he is not concerned about the future of the business and met with Standard Life Aberdeen co-chief executives Keith Skeoch and Martin Gilbert this week.
He says: “When [Skeoch and Gilbert] talk about the broader dynamics in the market and the democratisation of wealth they played back to me their belief in the need for advice. We see the merger as a net positive. We are part of a parent that will do interesting things and should ultimately be a stronger business.”
In its first 16 months of business, 1825 Financial Planning reported a £5.5m loss. Total revenue was £1.1m and total expenses were £8.1m Pre-tax losses were £7m.
Murray says the company’s financial performance is in line with forecasts.
He says: “When you are investing to grow a business quite quickly there is an amount of money you can spend. When we are looking over the next few months we are still positive about opportunities in the market and we are positive on the acquisition side of our strategy.”
Murray adds: “We are pleased with the quality of the pipeline. Looking at the results over that period that is a sign of the investment we are putting in and the commitment we are making to the business and 1825 is a major part of the wider Standard Life strategy we are trying to deliver.”
The restricted firm did not make any acquisitions in the first half of the financial year but Standard Life has said it expects to announce deals in the second half of the year. It previously acquired Pearson Jones, Baigrie Davis, Jones Sheridan and Munro Partnership while a deal with Norwich adviser Almary Green fell through last year.
Asked how many potential acquisition targets do not progress after conducting due diligence, Murray would not give specific figures.
He says: “What ideally we have tried to do is early on try to understand if there is anything that will mean for either side the partnership is not going to work. You will still from time to time find things in due diligence that mean you can’t proceed. I wouldn’t want to give specifics on that.”
Murray adds: “We have had lots of good conversations in the market and we have seen lots of interest in what we are doing. We have been really pleased whenever we sit down with businesses and teams and talk about what we are trying to do we get positive feedback on that. We are not giving specifics on the number of initial conversations.”
According to the results statement, 1825 Financial Planning employed around 94 staff in the 16-month period to 31 December 2016. Those staff include marketing, IT, commercial teams pitching for new business, and due diligence teams. It also includes the 10 to 15 people going through the 1825 academy.
There has also been speculation in the market about Murray’s future with 1825 but he emphasises his commitment to the business.
He says: “I have been incredibly fortunate to be given the chance to lead the start of 1825 and it has been an exciting experience for me. There are great opportunities for us going forward and I am fully committed. I am a huge believer in what we are doing at 1825.”