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Rathbones seals £104m deal to buy Scottish wealth manager

Rathbones seals £104m deal to buy Scottish wealth manager

Rathbones' financial planning division has been handed a boost after the company struck a £104 million deal to buy Scottish wealth manager Speirs & Jeffrey.

The move could give the growing financial planning business access to around 8,500 new clients as new services are offered to clients of Speirs & Jeffrey. 

'We expect aspects such as Rathbones’ specialist charities expertise, banking licence and financial planning capability to prove very relevant over the long term and wish to ensure our clients benefit from these,' a letter to clients said.

Ever since it bought network  Visions Independent in 2015 Rathbones has been looking to add to its financial planning arm. Financial results for 2017 revealed that planning accounts for £1.4 billion of assets at Rathbones, and the company pledged to grow its adviser numbers over 2018. 

The latest acquisition will give the financial planning arm the opportunity to secure clients from Speirs & Jeffrey. While the Scottish firm does offer some investment advice, according to its website it does not currently advise on pensions. 

Rathbones' acquisition will be part funded by a placing of 5% of Rathbones share capital with institutional investors. The shares have been priced at 2,500p each and will net the firm £60 million if demand is met.

The deal has been structured through a cash payment of £79 million and £25 million through the issue of new Rathbones shares, which will be locked up for three years from completion. 

Speirs & Jeffrey, which was formed over a century ago, is Scotland's largest independent wealth manager with funds under management of £6.7 billion and 38 investment professionals. It has 8,500 clients on its books with around 75% of them using the firm for over 10 years. 

All of Speirs & Jeffrey's current directors and investment managers will be joining Rathbones.

The firm's chief executive Russell Crichton will become head of Rathbones' Scottish business. Its Glasgow team will consolidate with Rathbones' existing presence in the city, which in the process becomes the firm's second largest office after London. 

Overall the deal increases Rathbones funds under management by 18% to £44.5 billion. 

In a stock exchange announcement, Rathbones said the strong cultural fit between the two business was a major factor behind the deal. 

Rathbones chief executive Philip Howell (pictured) said: 'From the outset of our engagement, both teams have recognised how compatible they are in culture, investment philosophy and dedication to client service.

'Speirs & Jeffrey represents an ideal strategic, professional and geographic fit with Rathbones and we look forward to working together both to develop our business in Scotland and deliver compelling returns for our shareholders.'

Crichton added: 'My colleagues and I have long admired Rathbones, and everything we experienced during our discussions has merely strengthened our conviction that it offers the very best fit for our clients and our people.

'With our client-facing staff members committed to and enthusiastic about the future, clients will continue to enjoy the high level of personal service which has become the hallmark of our firm, but with the additional significant benefits of Rathbones' scale, specialist expertise and deeper capabilities.

'The fact that our team will remain intact and that our clients will continue to receive the same exacting standards of personal service, whilst benefiting from the wider resources of Rathbones, fills me with great confidence for the future.'

Subject to regulatory approval, the deal with go through in the third quarter.

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