A regulatory crackdown on inducements has raised questions about the viability of the most common way in which IFA practices are bought and sold, according to consultants Harrison Spence Partnership.
Under many historical merger and acquisitions (M&A) deals, one IFA business or consolidator buying another advisory firm paid a multiple of fund-based renewal. Part or all of the payout is often conditional on the IFA moving its assets onto the consolidator's platform, or into their investment proposition. However, Harrison Spence Partnership said this perceived incentive to transfer assets, particularly into the acquirer's own investment proposition, is something the FCA views as an inducement which encourages churning. Strategic partnership models will have the same dilemma, it a...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes