Director Alex Shaw comments on M&As in the wealth management industry in Investment Week.
Mergers and acquisitions among wealth management firms, especially those with less than £5bn in AUM, are set to increase and could even beat the record number of transactions witnessed in 2015, as a tougher regulatory backdrop and Brexit uncertainty exert fresh pressures on the sector.
There were 124 M&A deals between wealth management firms in 2015, a fresh high during the eight years of tracking by Scorpio Partnership.
More than one-third of these deals – 41% – involved UK-based firms and activity has continued to be strong in 2016.
Deals have included Tilney Bestinvest’s £600m purchase of Towry, while Harwood Wealth Management and Rathbones have said they are eyeing future acquisitions…
…”There is now a need for increased diversification across asset classes, plus a greater need for currency hedging and management due to the movements caused by Brexit and the continued market uncertainty,” explained Alex Shaw, director of Progeny Wealth.
“There could be the possibility of some smaller players falling by the wayside if client investment activity dries up due to the uncertainty. Combined with a weaker sterling, this may make UK-based wealth managers even more attractive to foreign investment.”…