Bellpenny, the newest adviser consolidator on the block, launched in a bullish manner last year, claiming it was poised to swoop on £400 million of assets; with a further £600 million in the pipeline.
The group is not yet four months old but, in a strong start to 2013, has already delivered on one half of that pledge, and chief executive Kevin Ronaldson (pictured) is confident the retail distribution review (RDR) will only hasten its growth.
Bellpenny completed on a flurry of deals this month, acquiring Tunbridge Wells-based Brunning Newman Houghton, Sussex-based Private Portfolio, Essex-based Solutions Financial Services and Nottingham-based Vermillion Wealth. It followed that with its largest deal, buying the IFA arm of Monmouthsire Building Society.
More acquisition activity
Ronaldson is eyeing up the acquisition of a further 20 firms over the next year, as the RDR continues to squeeze the IFA sector.
‘There will be more firms that realise that perhaps they can’t deliver to the standard they have set in their client’s mind and they’ll think: “Well, if I can’t deliver on it, maybe I should find another solution”,’ he said.
He is equally bullish about Bellpenny’s ability to cope with a large influx of assets. ‘There’s a really good chance we might do 15 of a much larger size or 25 of a smaller size, but collectively we will only do as many as we can competently deal with,’ he said.
‘Our systems, our own investment funds and our backers are such that we can scale up to any size. We are willing to get into discussions with any business of any size as long as they understand that we will only take the business if they operate in our way.’
Selective about targets
While the group is set for a year of aggressive acquisition, Ronaldson says it will maintain stringent criteria when assessing possible targets.
He said although firms’ income streams and the value of clients was important, so too was their ability to be absorbed by the wider group. A consistent offering for its target client base was vital, he said.
Ronaldson said Bellpenny was aimed at clients that valued ‘face-to-face advice and financial planning. We wouldn’t be talking to the types of clients or businesses [that want transactional advice].’
The consolidator’s main focus will be to acquire client banks, although it has not ruled out taking on advisers from the firms it buys, providing they are comfortable with its process. Of its 14-strong adviser team, around half joined from acquired firms. It also employs nine paraplanners.
‘One of our core values is that a client of Bellpenny has the right to expect a level of service that is constant and we will make sure they know when and how that is going to be delivered,’ said Ronaldson. ‘The key to that is having rigid processes that everyone follows and understands internally, so any client in any part of the country from whatever business they originally came from knows what to expect for what they pay for.’
Bellpenny charges a 1% ongoing advice fee, unless the client opts to be charged on an hourly basis.
It uses the Ascentric platform but keeps acquired clients on their existing platforms if it deems them appropriate for their circumstances. It is still working on its investment proposition, which could feature agreements with discretionary fund managers or the launch of distributor-influenced funds.
Although these aspects of the business are still being developed, Ronaldson said the group had from outset had a crucial selling point compared with some national and network rivals.
‘We don’t have any potential legacy issues that other businesses in this area might have,’ he said. The group is also highly conscious of the danger of taking on such problems via its acquisitions. ‘If they’ve done things we think are unacceptable, we will just walk away,’ he said.
2012- present Bellpenny, chief executive
2009- 2012 Intrinsic Financial Services, deputy chairman
2005- 2009 Intrinsic Financial Services, chief executive
1999 -2004 Allied Dunbar/Zurich Independent, chairman and strategic distribution director
1997-1999 Allied Dunbar, product and marketing director
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