Jenna Brown talks to David Montgomery, managing director of newly formed M&G Wealth Management, about its shifting advice model and future growth strategies
M&G Wealth Management plans to triple the size of its self-employed adviser partnership business from its current roster of 70 and will transition its traditional Prudential Financial Planning (PFP) operation to a digital offering as part of its push into the wealth management space.
M&G Wealth Management - launched on 30 September - is the new division in which both advice businesses and the Ascentric platform sit.
Prudential Financial Planning currently employs 350 intermediaries while the firm's newer self-employed model The Advice Partnership (TAP) has 70 on its books.
Managing director of the business David Montgomery told Professional Adviser that balance would shift over time.
He said: "The balance of this is changing between traditional Prudential Financial Planning (employed) model to our new self-employed model The Advice Partnership. We are reducing the former to be a digital offering and tripling in size the latter and this is a model we feel we can continue to grow in the future."
Montgomery added that while expansion plans were on the cards M&G Wealth Management's "immediate focus is on executing the shift to a predominantly self-employed adviser model before we consider any further expansion".
He said as a manufacturer and adviser it would continue to specialise in retirement income/decumulation and capital preservation. However, he added: "Our focus is on adding model and discretionary portfolios to those segment offerings."
The managing director said the business had been building towards a wealth management operation for "some time" and its acquisition of Royal London's Ascentric platform brought an essential element.
The acquisition, which was first announced in May, is part of M&G's strategy to grow its business and expand its range of services for financial advisers and clients.
The move brought £15.5bn of assets under administration to M&G as well as relationships with more than 1,500 UK advisory firms acting on behalf of 90,000 individual customers.
"We have been in the advice and direct funds business for a long time and although we announced changes in our PFP business recently, we launched our TAP business a year ago. So rather than this being a 'launch' this is a reframing and bringing together of our model.
"There is a demand for high-quality advice and supporting wealth management and we are now well-positioned to be more active in this growing market," said Montgomery.
He admitted the coronavirus pandemic had proved a challenge, as it had been to all industries.
"We like others are having to adapt, however, we are adapting well and our ongoing investment in digitising our business and making it easier to engage with us will allow us to continue to continue to meet the needs of our clients".
Montgomery said M&G Wealth Management was different from most of its main competitors because the business "can call upon the unique mix of investment solutions and asset management capabilities derived from the merger between Prudential and M&G Investments in 2019, alongside the open architecture offering enabled through the Ascentric acquisition."
He also admitted there was "very little in this market that is truly unique" but pointed to the firm's successful smoothed multi-asset investment strategies. "We will utilise that capability within our wealth management business."
M&G said it had £339bn of assets under management and administration, about 5 million retail customers and more than 800 institutional clients.
Starting end of October
Failed in September
David Montgomery named MD
Eighth this year
'13% changed plans'
Starting end of October
Reportedly valued at £500m+
'We feel we can continue to grow in the future'