Bowmore Wealth Group, a new integrated wealth manager, is planning to make GBP10 million in acquisitions of smaller financial advisers and fund management businesses, as it looks to expand in the UK. The firm will be targeting advisers with up to GBP100 million assets under advice and fund managers with up to GBP200 million funds under management.
Bowmore Wealth Group launched in June 2020. The group has 25 staff working across financial planning and asset management and has over GBP350 million of assets under advice.
The group was formed through the combination of The Citimark Partnership, a Chartered Financial Planner, with over 450 high net worth clients, and Bowmore Asset Management, one of the UK’s fastest growing discretionary fund managers.
Bowmore Wealth Group says there are a large number of small financial advisers and fund managers that are facing rising costs and shrinking margins.
Mark Incledon, CEO at Bowmore Wealth Group explains that by merging with Bowmore smaller IFAs and fund managers will be able to reduce those costs that have been rising fastest in recent years: compliance, administration and Professional Indemnity insurance premiums.
Given this pressure on margins, a growing number of owner-manager teams at smaller firms are considering selling their businesses but find the idea of joining one of the large “consolidators” an unattractive prospect.
Bowmore explains that the sometimes “ruthless” pursuit of cost savings and economies of scale can make consolidators an unattractive place to work for those owner-managers that want to stay on with their business after they sell. The demand by some consolidators to rapidly assimilate acquisition, before moving on the next can create a bruising experience for the newly acquired business.
Mark Incledon, explains: “We are looking for high quality, independent businesses to grow with us.
“We have a family business ethic at our core which we think makes our business a much more comfortable place for former independents that join us. We are much more sensitive to their working practices and culture. We’re only going to acquire a firm that has a good cultural fit.
“Many consolidators just buy to build up assets under management with little regard for cultural fit.”
Bowmore Wealth Group points to its successful integration of Trigon Financial Planning in 2019, which added GBP60 million in assets under advice. Following the completion of the acquisition, all client facing staff at Trigon have stayed with Bowmore Wealth Group, with just one member of the support team leaving as part of a career change. 97% of Trigon’s clients also made the move.
Mark Incledon adds: “I know how difficult it can be for smaller advisers and fund managers to scale up to a level where margins and profits are a decent reward for all your work.
“What we are offering independents is a very professional platform from which they operate, maintain their client relationships and have a seat at the table.
“We pride ourselves on our bespoke, personalised offering – that is one of our key differentiators against larger firms.”