Close Asset Management has completed a £17 million deal to buy adviser firm Chartwell Group as it builds its private client financial planning offering.
New Model Adviser® revealed last month that Close AM was poised to buy the Bristol-based IFA, which has around £650 million of client assets, including some held on its execution-only platform proposition.
Close AM parent Close Brothers Group said in its results for the year ended 31 July 2010 that Chartwell had good links into the South West of England and its 60 members of staff would help the growth of its private client proposition.
It added that it still saw 'significant opportunity' to buy client banks from IFAs exiting the sector due to regulatory change, as part of its acquisition drive led by head of intermediary acquisitions Stuart Dyer (pictured).
Close estimated that it would spend up to £20 million on the proposition, which will include financial planning and discretionary services and a telephone-based service for self-directed clients. It spent £6 million on it in the year to the end of July, and said it anticipated spending a further 2011 in the next financial year.
Investment in the private client proposition led to Close reporting a subdued performance for the year. Adjusted operating profit fell to £3.3 million, down from £12 million in 2009.
'The division is in a period of transformation as it implements its wealth and asset management strategy,' the group said in its results. 'This initiative involves investment that negatively impacted the division's profit performance, particularly in the second half of the year.
Close said it expects a wait of up to 18 months for clients from a £50 million acquired client book to choose to move across to its private client service.