WH Ireland has acquired an 8,000-strong private client book from beleaguered Pritchard Stockbrokers.
The wealth manager paid £500,000 for the book, which was valued at around £400 million based on the non-cash assets under management relating to the 8,000 clients. The acquired assets generated a loss of around £6,000 for Pritchard.
WH Ireland said the transaction will increase its number of private-client stockbroking clients by approximately 50% and total assets under management by approximately 25%.
The purchase comes after the Financial Services Authority issued a First Supervisory Notice to Pritchard, preventing it from undertaking any further regulated activities. The financial watchdog said Pritchard had used client money for its own expenses, thereby putting client money at risk’. It also froze the firm's asset and told the Bournemouth-based firm to inform clients that it had been barred for working for them.
Following the transaction WH Ireland said will be in a position to undertake regulated activities for the 8,000 clients transferring to its books.
WH Ireland chief executive Paul Compton (pictured) said: ‘The transaction increases our regionally based private client business and moves our nominee funds total forward. It provides an immediate resolution to what had become a worrisome situation for Prichard Stockbroker's clients.
‘We welcome them to WH Ireland and look forward to meeting their financial needs. We fully expect this transaction to be earnings enhancing in the first full year following completion.’