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Transact owner fires starter gun for platform float

Transact owner fires starter gun for platform float

The long awaited float of adviser platform Transact has arrived, after its owner Integrafin announced this morning it will list at least 25% of equity in the business on the main market of the London Stock Exchange

Transact administers £29.7 billion on behalf of 150,000 end clients and 5,100 financial advisers. Integrafin did not offer a guide price for the sale.

Transact has long said that it was interested in going public in 2018.

IntegraFin said Transact, which launched in 1999 as Britain’s first adviser platform, had recorded 17 years of continuous growth and had been profitable since 2003.

Chief executive Ian Taylor (pictured) said: ‘We have developed a clearly differentiated business of scale with impressive returns and strong margins that operates in a growing market.

‘Supported by a growing demand for financial advice, an increasingly complex investment landscape, pension freedoms and strong growth drivers in the UK wealth management market, we believe that we are well-positioned to continue to achieve long-term sustainable growth, returning value to our shareholders, customers and staff alike.’

Windfall for Transact shareholders

Advisers with shares in Transact will already enjoy a dividend payout of up to £27 per share this month.

Transact recently informed investors the dividend for 2017, which dictates this month’s payout, is £17.18.

The company told New Model Adviser® it would be paying this in the next few days and would also be paying a special dividend of £10 per share in the coming weeks.

Last year the dividend pay out was £12 per share.

Many of the advisers that use the Transact platform are also shareholders and have been for over 10 years.

Transact has a policy to pay out distributing 65% of pre-tax earnings. This year that equates to paying £19.4 million to shareholders this month.

At the same time Transact announced its dividend price in January 2017 it announced its intention to launch and initial public offering in the first half of 2018.

The company paid this earlier this month and will also be paying a special dividend of £10 per share.

Last year the dividend pay out was £12 per share.

Charges overhaul

In December 2017 Transact announced it was revamping its charges ahead of the planned float.

Under the system due to come into place in April, investment and cash accounts will now be charged at the same rate. This change will slightly increase some charges for cash holdings, but Transact said it will calculate rates under both the current and new rates and will charge clients the lower of the two. 

Alongside this move, Transact has lowered the portfolio size required to access discounted charges from £120,000 to £100,000. The change means clients with between £100,000 and £600,000 will be charged 0.29% on their entire portfolio. Currently those with less than £120,000 must pay 0.5% on the first £60,000 for investment accounts, and 0.45% for cash accounts.

Transact has also launched a new 0.05% rate for holdings above £5 million. 

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