Towergate feels the squeeze and reels TFS back in

Tough market conditions have forced insurance broker Towergate to scale back the activities of its IFA consolidation business.

Towergate Financial Services is being folded into the group with the loss of 20 from 150 staff. It will become a new division reporting to chief executive Andy Homer.

Patrick Snowball (pictured), chairman of TFS and the former head of non-life insurance at Aviva, has also stepped down from his part-time role. Before taking on the role of chairman he held a non-executive position on the board of Towergate Partnership.

TFS was tasked with building a national adviser firm but, having bought M2 Financial last August, the company said it was no longer feasible to run a separate consolidation business in the current environment.

Following a strategic review, Towergate concluded that 'given the current adverse economic conditions, the scale of operation originally envisaged...is no longer appropriate in the short term.'

The report also suggested bringing TFS under the Towergate umbrella would be the best solution for stakeholders.

Peter Cullum, Towergate chairman, said: 'The original TFS concept - to replicate the Towergate model in the fragmented IFA market - remains as valid as ever but, given current economic conditions, we must scale back the rate of growth. The solution we have announced today safeguards the TFS business and provides the right structure for the future.

'As a result of the restructuring and modified business plan, we say farewell to Patrick Snowball. I thank him for all he has done for Towergate and wish him the best.'