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  • Rachel Saunders

February 2019 Review

Updated: May 23, 2019

In one of our headline acquisitions for February, Harwood Wealth Management Group announced that they had exchanged contracts with Castleton Financial Planning with the completion date due to be early April. The purchase price is expected to be £1.6m paid 50:25:25 and this adds to the pipeline of acquisitions we are expecting to see from Harwood this year.

Progeny have had a very active month, completing on 3 acquisitions in quick succession. They have expanded into Scotland through their acquisition of Edinburgh based Innovate Financial Services. This is Progeny’s first venture beyond the border and shows their capacity and drive to increase their national presence going forward. Progeny also acquired Quest Financial Solutions in Buckinghamshire and Juno Wealth Management in Sussex, strengthening their presence in the South East. All three firms are retaining their members of staff doubling Progeny’s headcount to 125 in total.

It seems to be a month for expansion into different geographical areas, as DeVere also acquired UAE-based wealth advisers Prosperity. Prosperity will continue running as an independent firm and Andy Cole the CEO will continue to head up the business. This acquisition demonstrates an important advance in DeVere’s vertical and horizontal growth strategy for the future.

February saw Foster Denovo acquire Orchard Wealth based in Kent, Foster Denovo will retain Mike and Sally Wiggins as permanent employees. This acquisition was a natural fit, with the use of cash flow planning and very high levels of personal client service being at the centre of both businesses, the introduction was an obvious one to make and we hope that this deal proves to be a success throughout the integration period and into the future.

Perspective Financial Group Ltd have begun their second bout of acquisitions, they did 30 acquisitions initially, and have now integrated these firms and are actively engaging in talks again. In February, they acquired Investment Principles based in the North West, this acquisition comes less than a month after they announced they had purchased Galloway Whitfield (Life & Pensions) Ltd based in the North East, showing their drive to expand again.

One of the largest and most notable acquisitions this month, was the acquisition of Charles Derby by Quilter. Charles Derby have been acquiring in the space for the last year or so, so to see them sell to another acquirer has been an interesting addition to the advice space. The two firms have very similar propositions, both operating under the Intrinsic matrix, so there will be little disturbance for their advisers. Charles Derby have a large amount of less affluent clients, which should broaden the advice proposition and quantity of clients that Quilter are able to service, as historically they have been focussed on the upper affluent and HNW clients. 

Fairstone concluded the acquisitions for February with their purchase of Pensions Wealth Management Service. This deal will see Fairstone add £200m to their FUM and kicks off Fairstone’s acquisitions for 2019. PWMS have joined through Fairstone’s DBO programme that enables firms to integrate with Fairstone’s policies and procedures ahead of a final acquisition, Fairstone are willing to pay more for business that are happy to go through this process and it is a unique model in the space.

For a short month, February has seen a large amount of notable acquisitions, and it seems that regulatory pressures have not slowed down a lot of the major players. Having said this, we have started noticing a trend in the market that acquirers that are offering share deals are beginning to retract them post due diligence and offer an asset purchase instead. This trend is due to the regulatory pressure around DB transfers, and many firms are now unwilling to take on any liability for DBs, whether or not the process has been robust. We think this may be a movement that continues to affect vendors in the market over the next few months, so it may result in quicker deals, and also different structures being used to ensure that the vendor is still able to claim for Entrepreneur’s Relief. Watch this space!

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