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Bestinvest’s Hall targets £6 million in cost synergies from Tilney deal

by Eleanor Lawrie on Jun 16, 2014 at 14:33

Bestinvest’s Hall targets £6 million in cost synergies from Tilney deal

Bestinvest’s chief executive Peter Hall (pictured) is targeting £6 million of cost synergies when the firm’s merger with Tilney completes.

In light of the merger, instigated by parent Permira, Hall is looking to double the number of financial planners in its wealth management arm.

Hall noted the average client size for both Tilney and Bestinvest is currently more than £1 million, and said the large-scale hiring of financial planners ‘will be targeted at that client segment’.

The merger of Bestinvest with Tilney, Deutsche Asset & Wealth Management’s UK regional wealth management business, is expected to complete this month. The firm is set to be rebranded Tilney Bestinvest and the management team will seek to take advantage of their new-found scale and implement cost synergies, Hall said.

The combined group will run £9.2 billion in assets and the deal will give Bestinvest a greater discretionary focus with 63% of its client base falling into this category.

‘With this combined scale, we will be able to use it to negotiate better terms with our providers. We are targeting £6 million of cost synergies by the end of 2015,’ Hall said.

He added that he does not foresee redundancies. ‘At the moment we do not envisage redundancies as part of the merger. A lot of the support services are provided by Deutsche Bank and we can take on this with a relatively small number of additional staff, so we can achieve economies of scale without the need to make redundancies to get there,’ he said.

One of the attractions of the deal, he said, is that the geographical fit is ‘excellent’ as Bestinvest can expand its reach through the regions from Tilney’s office network in Birmingham, Edinburgh, Glasgow and Liverpool.

He said Bestinvest’s wealth management arm had received a recent boost from liquidity events where entrepreneurs have sold their business, alongside strong growth among professional clients.

‘We are looking to double our team of financial planners in the next few years, so that will be the main driver on the hiring side,’ Hall said.

The firm is looking to hire more investment managers in Glasgow, Edinburgh, Liverpool and London over the coming year. Hall said it would consider opening offices in Cambridge and Aberdeen. ‘At the moment we have 15 offices which have pretty broad national coverage and the main focus will be growing with those offices,’ he added.

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