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  • Patrick Isaacss

Half Yearly Review 2018

What an exciting year we have had so far! We have seen a high level of competition between wealth management firms across the nation in terms of their appetite for acquisition regardless of the regulatory and statutory changes such as Mifid II and GDPR.

Mifid II took place early on this year improving on the directive of financial markets and strengthening investor protection. Almost 6 months on, it is remarkable to see how well firms have implemented the appropriate changes to their organisations.

Robo-advice is something that was set out to be the ‘next big thing’ in the wealth management space, however, whether or not this has come to fruition is another matter. Having said this, M&A offers the best opportunity to achieve access to cutting-edge innovation – talent as well as technology, aside from internal investment and organic growth. Whether you acquire a FinTech startup as a whole or take a minority or majority stake, there are multiple opportunities (target acquisitions) available currently in the UK.

However, recently the FCA struggled with the level of disclosure and suitability these online businesses have been operating with. Reviewing 7 firms offering online advice, the FCA found that there were inadequate processes in place, in establishing a client’s appropriateness to invest. Alongside this, there were a number of additional points the regulator deemed inadequate when providing clients with financial advice. 

Nevertheless, London based international professional services firm, Capita recently took a minority stake in robo-advice firm Munnypot. Ex-owners of Cavanagh Group, Simon Redgrove and Andrew Fay, who were taken over by Close Brothers’ wealth management arm alongside Simon Chisholm set up Munnypot, after Andrew and Simon’s exit from Close a few years ago. They vow to offer a “best in breed robo-advice solution” to clients.  

In conclusion, the first half of the year has been eventful with strong M&A activity throughout the Wealth Management sector. In the search of prospective firms, you may not have considered some of the strategies mentioned above and given the buoyant market we have today, it might be worthwhile considering them to strengthen your position in the market and perhaps enhance the offerings you are providing your clients.

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