The UK financial advice and wealth sector has become a very attractive market for players around the globe, with a steady flux of private equity money increasingly taking over firms in Britain.
Over the last few years such activity has increased so much that not a single week goes by where International Adviser doesn’t report on at least a handful of M&A deals.
But among the sheer volume of acquisitions in the UK, we have noticed an interesting trend, as advice and wealth firms, big or small, have all been expanding or entering Yorkshire recently, with IA reporting on at least over a dozen acquisitions in the region in the past six months.
Most recent examples include: Progeny’s takeover of RU Group and J M Glendinning Financial Services; Kingswood’s acquisitions of Allots Financial Services, Joseph R Lamb IFA and Aim Independent; IWP’s purchase of Acuity Wealth Management; and Tenet’s acquisition of Astute Financial Advisers.
This clearly shows that Yorkshire is very attractive to the wealth sector, so IA spoke with Progeny, Acuity Wealth Management and Tenet to understand why so much M&A activity has taken place in the region.
Tradition of saving
Neil Moles, chief executive of Progeny, said: “If there’s one thing Yorkshire people are famous for, it’s knowing how to look after their money, and the region has a long heritage within the financial and banking sector.”
Janet Comrie, chief executive of Acuity Wealth Management, agrees with Moles as she said that people in Yorkshire have a somewhat innate aptitude for saving money.
“Yorkshire has a mixture of inherited wealth and new wealth, as more businesses reap the rewards of their success. I do feel that, generally, clients are pretty careful over how they spend money, we are a county of great savers, and many clients have to be encouraged to spend money, or give it away.
“This gives consistent rising funds under management, which makes a Yorkshire advice firm an attractive purchase.”
In addition to this, Comrie added, it does help that people in the region are more likely to deal with Yorkshire people, which explains the race at securing advice and/or wealth firms with an already existing footprint there.
“There is a lot of wealth in Yorkshire, with farming communities, busy cities such as Leeds, a leading financial centre in itself, and intergenerational wealth also seems to follow financial advisers as they look to continue looking after the next generations,” she said. “This creates close relationships that are valued for service and trust, a key factor in financial planning.”
But this also makes businesses with local clients that much more attractive to potential acquirers, Comrie believes.
Changing demographic
One of the aspects to keep in mind, according to Mark Scanlon, chief executive of Leeds-based Tenet Group, is that Yorkshire has kept up with the changes in financial services, society, and technology, which have turned it into somewhat of a wealth centre away from the more obvious hub that is London.
“Tenet has been based in the region for nearly 40 years, and in that time, we’ve seen significant change. Yorkshire is now rightfully considered an important financial services hub, in part driven by the growth we are seeing in Leeds city centre,” he said.
“There’s a growing population of high net worth individuals, better connectivity and easy access to skilled financial workers. Estimates suggest around 66% of jobs in Leeds in financial services are considered ‘highly skilled’. The local demographic is also changing, with a growing population of educated, skilled workers increasingly demanding professional financial advice.
“Such factors have combined to create the rich climate for financial firms and advisers we now see in Yorkshire. Of course, such local advantages have not gone unnoticed, as witnessed by the growing number of M&A deals being seen. This is a clear indication of the confidence we have in the region’s economy and the skills and expertise of the advisers operating here.”
