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Towergate Financial Services to be scaled back

Towergate Financial Services has scaled back plans to rapidly build a national network of IFAs and has been folded into a division of Towergate Partnership Limited.

TFS was established in Jan 2008 as a separate company to consolidate regional IFAs and in July last year the firm had raised £100m to make 20 acquisitions by the end of the year.

But the firm, which has made just ten acquisitions, has conducted a strategic review and says it must now change its approach due to tough market conditions.

A spokesman says: “The world has changed and we have had to recognise that the business model and the ambitious plans we had are not appropriate for the climate we’re in. The best approach is to run a scaled back model.

“We will continue to make controlled acquisitions, but not at the same pace as before.”

TFS will become a new division of TFL, reporting to chief executive Andy Homer. Patrick Snowball will step down from his position as chairman.

The review, which involved independent valuations of the business, also concluded that the best solution for stakeholders was for TFS to be brought into the TPL fold.

TPL chairman Peter Cullum says: “The original Towergate Financial Services concept, to replicate the Towergate model in the fragmented IFA market, remains as valid as ever but, given current economic conditions, we must scale back the rate of growth. The solution we have announced today safeguards the TFS business and provides the right structure for the future.”

Patrick Snowball adds: “I am sad to be leaving TFS but the time is now right to concentrate on my other business interests. Putting TFS into the TPL structure is the logical way forward, given the different market environment we now face”.

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