Towergate has sold its financial planning arm, Towergate Financial, to Palatine Private Equity in a deal worth £8.64m.
Towergate says it has decided to offload the business the – which includes advice firm TF Financial Planning and mortgage broker John Charcol – because it has a different risk profile to the company’s core insurance broking operations.
The insurer also wants to remove risks associated with an FCA investigation into Towergate Financial from its balance sheet.
Towergate says: “Given the ongoing investigation in relation to past advice provided by the Towergate Financial business on enhanced transfer values and unregulated collective investment schemes it was determined that the group should seek to de-risk itself from any future potential issues that might arise in this sector.
“Under the terms of the agreement all risk on all business written post completion of the sale will be removed.”
Gross consideration paid by PPE has been agreed at £8.64m, with net proceeds of £6.4m after costs.
Towergate interim chief executive Scott Egan says: “The sale of TFG is further evidence of a commitment to our core strategic focus, which is to build on our market-leading positions and distribution capabilities in SME insurance and specialist personal lines.
“The provision of independent financial and mortgage advice sits outside these markets and has now found a more fitting home with Palatine Private Equity.”