UK Financial Advice Consolidator To Float, Raise £28 Million

Tom Burroughes

8 July 2013

Perspective Financial Group, one of the largest consolidators in the UK and which is taking advantage of a new UK regulatory landscape, said today it intends to be quoted on London’s Alternative Investment Market exchange.

The initial public offering is intended to raise gross proceeds of £28 million ($41.7 million), Perspective said in a statement.

The firm was created in April 2008 to take advantage of the opportunities expected from the Retail Distribution Review programme of reforms, which took effect from this year. The RDR is designed to ban trail commissions and raise professional standards of financial advice – reforms which have forced thousands of independent financial advisors out of business or led them to sell up and merge into networks and with other businesses.

One of the biggest players in the field, Perspective advises around 84,000 private clients and around 500 corporate pension clients.

“Perspective’s acquisition strategy is complemented by organic growth through a focus on enhancing client service offering, powered by asset transformation of clients’ investments onto platforms, resulting in higher levels of recurring income for Perspective and typically a lower overall charge to the client,” the firm said in the statement.

The move is a sign of how the RDR is affecting the UK wealth management landscape. Already, it is estimated that at least 15 per cent of independent financial advisors have left the business. (To view an article exploring some of the issues stemming from the RDR, click here.)

The firm said it is among the top-15 financial advisory firms in the UK, with over £2.5 billion of assets under management; since it was set up, the firm has made 31 acquisitions.

“ RDR has seen a shift in the balance of power in the UK financial advice market away from the manufacturer of the financial product, with advisor remuneration now being determined by charging explicit agreed fees rather than commission paid by the provider. This provides Perspective with a significant opportunity to increase margin through an enhanced service offering, while delivering a reduction to client’s total annual management charge,” it said.

At present, Perspective has 12 businesses in its acquisition pipeline, for which terms are agreed for six acquisitions, and three expected to close during August this year. The remainder are in negotiation, it said.