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'A terrific day': joy for shareholders as Transact sets up float

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'A terrific day': joy for shareholders as Transact sets up float

Shareholders in platform Transact have welcomed plans announced this morning for the business to float in the first half of 2018.

A Transact floatation has long been on the cards, but was finally announced this morning by parent company Integrafin, which said it will list at least 25% of equity in the business on the main market of the London Stock Exchange.

Shareholders in the business have welcomed the move. Malcolm Murray (pictured), who was head of sales and marketing at Transact between 2003 and 2013, said that the floatation would allow it to keep its independence.

'There's no question that it enhances the business's reputation,' he said.

'First of all, it's based upon a reputation gained over 18 years. Secondly, the thing that most IFAs who expressed any opinion at all were concerned about was it being sold to somebody, particularly a life company . Well, Transact has always made it clear there wasn't a cat in hell's chance of it being sold to a life company.'

'My view is that there isn't a life company silly enough to do that anyway, because most of the IFAs were rather tired of the poor service from life companies so why would they be happy? The very fact it's floating, it retains its independence because virtually 75% of the shares will be retained by the people who are already shareholders.'

'A terrific day'

One adviser shareholder who has used Transact since 2002 told us he had been aware of the floatation plans for 'over a year', but that the question of 'when?' had purely been down to market timing. 

Phil Melville, who directs Hertfordshire-based Argyle Financial Planning with wife Jean, holds 4,000 shares in the business. He said it was a 'terrific day' for Transact.

'It's a really terrific day,' he said. 'For Transact I'm not sure it's going to make an awful lot of difference [to their day-to-day operations] because I spoke to [chief executive] Ian Taylor just a few weeks ago and I knew he wasn't going to sell any shares because he doesn't want to sell any shares.

'The idea that it's going to expose [Transact] to a takeover - I don't think that's got legs at the moment. [Taylor] loves his baby that he's spent a large part of his adult life making, as does [former chair] Mike Howard. So I don't see it making a material difference to Transact.'

Melville added that any benefit to IFAs would depend on what IFAs were actually doing, but he did say the Transact platform had been 'transformational' for his own client proposition.

'Is it a good thing for IFAs? That really depends on what IFAs are doing,' he said.

'In sixteen years it's been the best thing we've been able to give our clients, our business and ourselves. We've had a more solid foundation than we could have ever dreamed of because of Transact. It's made our clients understanding of their finances so much better.'

Agnostic shareholders

Another adviser shareholder welcomed the news, but added he was 'quite agnostic' about the float.

David Gow, director of Aberdeen-based Acumen Financial Planning your, said that Transact had helped the firm deliver a good service to clients, but that they would 'watch and review' the platform's progress to make sure it was still a good fit with their processes.

'I'm quite agnostic really,' he said.

'We believe that Transact have helped us give our clients a great level of service, and I would really like to hope that continues even after partial floatation.'

'What Transact do as a business in my opinion is a little bit down to them. We have to look after our clients and ensure that nothing harms them. Transact has stated that they don't believe that will be the case and therefore we're okay with it. We will watch it and review it and just ensure that our clients are not suffering any lower level of service because of it.'

Heather Hopkins (pictured above), managing director of platform consultancy NextWealth, said the IPO 'could be very good' for the business but that the platform still had future questions to answer.

'My view is that the IPO could be very good for Transact and its shareholders,' she said.

'Hargreaves Lansdown’s listing gave the firm a massive boost in credibility and name recognition with end customers. Transact, being an intermediated business relies less on brand strength among end investors but  this can be a factor when advisers recommend a platform.'

'The question will be whether shareholders will continue to support an expensive service model particularly as pressure increases on platform charges.' 

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