Today it was announced that Ascot Lloyd and PFP Group are merging, while only last week St James’s Place bought out Rowan Dartington for £34m.
Bellpenny is another standout case. The company has been on a long acquisition streak that shows no sign of abating.
Wealth management and financial advice as an industry lends itself very nicely to takeovers. Most of the firms are unlisted which means there are few shareholders to deal with.
Then there is the fact that by their nature, wealth management firms have plenty of corporate expertise within them, reducing the reliance of third party advisers when it comes to identifying targets and getting transactions over the line.
"In many cases takeovers can be a very effective shortcut to bumping up client numbers and assets under management"
In many cases takeovers can be a very effective shortcut to bumping up client numbers and assets under management. Even buying up a small peer with a few dozen clients can in one day lift a firm’s numbers to an extent that would take years organically.
Then there is the M&A banker’s favourite word; ‘synergies’. Pitched correctly, it can be made to seem that any takeover will ultimately pay for itself over time once the synergies have kicked in, i.e the cost savings resulting from the elimination of duplicated functions in the two companies.
