US investment firm ploughs money into Towry Law

Why an undisclosed sum then?

Do Towry Law need the money?

What for?

Surely they have enough unserviced trail income for cahflow?

Sounds Fishy to me (sorry but I couldn't resist)..........

With £6m flowing into Towry Law's coffers every year and TL doing bugger all in return, it's hardly surprising that AMF perceives it to be an attractive cash cow. It's money for less even than old rope. A nice business model if you can get away with it. Not very ethical, mind, but in pure, cold, hard, amoral commercial terms, pretty good.

Come to think of it, not a million miles away from how the FSA ran its mortgage regulation division for the first four years of its existence ~ until, of course, the brown stuff hit the fan in a rather seriously major way. Must have been good whilst it lasted, though. I wonder if they got paid bonuses as well?

Mezzanine finance is only generally used if a firm can't borrow the money from a bank and doesn't want to dilute it's shareholders. It is high risk and can turn very expensive!

reply to Ouch

Some equity given up but according to Mr Fisher it is not "significant". It seems what is significant to him may not be significant to others and vice versa. Perhaps this is another case in point. I suggest staff check value of shareholdings (as it is perhaps a significant reason for remaining on side)

Sounds like a capital adequacy issue to me - surely you would take senior debt first to fund expansion? Even mezz will have an attaching equity warrant (and attractive coupon)!

I'm sure they would rather move the legacy clients on to their 1% 'fee' model instead of 0.5% along with the Edward Jones clients and provide an excellent ongoing service as I would assume they do.

Major Sceptic

I reckon that TL would love to get their legacy business including that of Edward Jones on to their 1% 'fee' model and provide the clients with an excellent ongoing service.

They just need to have enough advisers to service the increased client base (rather than get rid of EJ advisers) and have no targets for new business,or increase adviser numbers.

Major Cynic.

Oops double entry re IT problems

Mr. Fisher’s CV bespeaks of a ‘cut and run’ career. I imagine he has a healthy chunk of shares or options and it has always appeared (taking the past into consideration) that TL was being run with practically one exclusive purpose – the enrichment of Mr. Fisher.

This is probably just another (effective) step in this path.

Should one be critical of this? Don’t others do pretty much the same to a greater or lesser extent if they have the power so to do?

I guess there will be those who have more of a social conscience, but then those who are most successful (as measured by their bank balance) and invariably the most ruthless. That’s life. Not a lot of point in bellyaching about it really – I guess it’s just capitalism.

Where spectators get brassed off is when those in the frame try to pretend they are something other and that what they are doing is exclusively for soft and cuddly reasons – such as being lovely to their clients and staff.

One of the partners at Spofforths invested "an undisclosed sum" in Spofforths Financial Planning today. The money has been invested as an unsecured loan.

The partner said "this represents our continued commitment to financial planning as part of our long term strategy. Our clients will surely benefit from this. The unsecured nature of the loan demonstrates our confidence in the financial planning business"

Managing Director, Philip Wise, said "I've just spent the money on a kitkat and a new biro. I think the biro will help clients, but I;ve eaten the kitkat now. I reckon I'll repay the loan when I get to the cashpoint. You can get your name in the paper for anything nowadays."

Who really cares what TL does as long as it does not go pop and fall on the FSCS for claims.

We spend to long in our industry worrying about what everyone else is doing it is non productive and earns nothing so why waste time on things you have no control over?

Probably got something to do with getting money out of the USA and being sweet to President Obama, in case he stamps on US Bank bonus culture.

Quite why AMF has chosen Towry Law for cash investment i do not hazard a guess, but perhaps a US plastic cheese manufacturer might have been a better bed partner. Kraft know very little about chocolate and i suspect even less about Towry Law.

You said 'With £6m flowing into Towry Law's coffers every year and TL doing bugger all in return,..........'

The insurance companies pay that money, not clients. The 'clients' are not TL's. They are clients of the insurance companies. Some people have even apologized for pushing that misconception :-)

http://www.moneymarketing.co.uk/towry-law-apology/1004907.article

Hey my moonshine buddy, come add some comments. The last 13 days have been some of the most stressful of my life for entirely non-IFA reasons so am back here just enjoying the view and comments. It's cheaper than therapy. I enjoyed Mr. Wise's humorous missive.

How's it going for you Anon?

Julian Stevens ... you really need to get over it.

I suspect at the heart of the matter lies some huge inferiority complex. Perhaps you have a small business?

Hey all & moonshine buddy!

I've been high in the sky of towry towers meeting my new big scary manager.... I keep hear how nasty & horrible they all are I really haven't seen that when I was sent before for my shin kicking & hair pulling I got fluffy nice and lots of candy floss!!

Can someone please expand on this rumour of tough man management - I just can't see it!

Anyway word on the street is that the investment from the Americans is a really positive thing..... We were just all praying it wasn't Edward jones investment oops sorry forgot their 35m in debt!! And as has been discovered by the jones investment so far TL have struggled to sell those assets - not much for staff on eBay these days!! Which is why so many are still in transition hindering the process!

Parting thought........ What if TL use the money & other finance to buy SJP - how funny would that be for all the ex TL & EJ advisors who jumped ship their due to their hatred of TL! Where would they go then?? Running out of options then one would think.

Just think ellie mae if that happened we would have years of entertainment over a few glasses of moonshine...

Sorry to hear you have been stressed hope it eases soon.

Mr wise excellent post - love it are you a relation of ernie?

What a surprise, Julian Stevens feels the need to comment, in his usual schoolboy style, on Towry Law.

Nobody is interested Julian. Perhaps you maybe more creditable once you are running a national operation, have 800 staff, acquired umpteen businesses, dealt with the legacy issues that brings, received investment from a New York investor, manage circa £4bn on behalf of clients, migrate from commission to fees and become RDR compliant. Oh yes, and turn in a substancial profit while you're at it. Sound like any Firms you know?

Once you've done that, you might be taken slightly more seriously.

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Stress: tiny relative in Haiti who is safe now, we are lucky.

Back to topic at hand, damn no big time fights in the comments section, where's the fun in that? Go on someone throw a few insults about.

Mr. Comedy Man: Do love your suggestion that TL buy SJP, have you considered mentioning it to Fisher? I am pretty certain he would find the prospect very amusing.

Mr. Wise, brilliant post. Though I have spent the whole day hearing Boom Oo Yata-ta-ta in my head.....