'1825-Grant Thornton deal would face culture challenge' - M&A specialist

Standard Life Aberdeen's (SLA) advice business 1825 was reported by Sky News last week to be in "exclusive negotiations" to acquire the wealth advisory business of accounting firm Grant Thornton.

Any potential deal was said to be worth approximately £30m and would see roughly 100 employees join 1825 upon completion, including "a handful" of partners and around 30 financial advisers. Both firms have declined to comment on the rumours.

Soprano Mergers and Acquisitions chairman Stuart Dyer said retaining Grant Thornton advisers who are used to a specific sort of culture would be the greatest challenge facing those overseeing the merger of the two firms.

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"In a situation where you have a group of advisers who have been attached to a professional services firm like Grant Thornton, there is a very specific culture that tends to attach to the advisers, and it can sometimes be difficult to find a home for them that replicates that culture," he explained.

"At first sight, you would not necessarily think of 1825 and Grant Thornton in the same breath. But what we don't know is the structure 1825 will put in place, the extent to which it will be designed to retain some of the characteristics of the [Grant Thornton] culture, or whether it is a genuine integration of those advisers into the 1825 business - and I think that is the critical factor with this deal."

Differing client profiles

Coming from a firm like Grant Thornton, said Dyer, the adviser arm of the business can feel like an extension of the accountancy firm, rather than a free-standing adviser business. He also suggested client profiles may be different, with those advised by Grant Thornton more likely to be have a higher net-worth.

Dyer continued: "Obviously advisers have to get comfortable with the new brand, but will they be as comfortable with 1825 as they were with Grant Thornton? These are material challenges and for any transaction of this nature to be successful, you have to be certain there is a buy-in from the adviser team. There is a long way to go before both sides can be sure they have the right deal and it fits."

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• Standard Life Aberdeen
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