Towergate Partnership, a European independent insurance broker, has launched a new financial advisory business to buy up regional independent financial advisors, the Sunday Telegraph reported.

It has raised £108 million ($215 million) through debt and equity from Royal Bank of Scotland, Lloyds TSB and management and plans to make 20 acquisitions by the year end. Lexicon Partners acted as financial advisor in the capital raising.

Patrick Snowball, a former executive chairman of Norwich Union who is chairing the new business, was quoted by the newspaper as saying he was looking to snap up advisors to high net worth and "mid net worth" individuals to compete with market leaders such as St James's Place. IFAs bought by Towergate Financial will provide advice on savings, protection and investment products to people earning at least £50,000 a year.

"There are 29,000 IFAs in the UK. No more than a handful are making in excess of £5 million profit a year," he said. "For a long time, people have looked at this market saying that from the customer's, regulator's and distributor's point of view, the current structure does not work. There are significant opportunities in the market.

"We have a target of acquiring 370-400 registered individuals in the first two to three years, to put us in the list of the top 10 IFA providers."

His move comes at a time when other UK and non-domestic firms have been snapping up IFAs or creating networks of financial advisory firms on a franchise model, especially those which focus on the more affluent segments of the client base.

Mr Snowball described Britain's personal financial services market as having "very attractive long-term growth prospects", despite fears that inflationary pressures are causing people to curb the amount of money they invest. "The savings habits of the top 15 per cent [of the population] are almost counter-cyclical," he said, adding that 67 per cent of the population still turned to IFAs for financial advice.

Peter Cullum, the entrepreneur who founded Towergate Partnership and earlier this year sold a slice of his company to Och-Ziff, the US hedge fund, will own more than half of the new venture. Management will have a 25 per cent holding in the business.