Malcolm Kerr: Proper due diligence is missing from adviser M&A

1 September 2021

Mergers and acquisitions in the advice space can suffer from poor due diligence and culture clashes.

I’ve always had a soft spot for M&G, not least because its invented unit trusts back in 1931, but also because when working for KPMG and EY, I was involved with a number of very enjoyable projects within its business. The environment seemed very collegiate, the people very high quality and, unlike some clients, the company was very open-minded.

Back in the 1970s, M&G was very adept in generating direct to consumer new business via “money off the page” – a strategy involving an advertisement in a publication like the Saturday Telegraph, for example, that promoted a fund. The consumer cut out the advert, filled in the form, and sent it to M&G with a cheque. Its only challenge was a similar advertisement from Hargreaves Lansdown (HL) on the following page that offered a 1% discount on the fund, which enabled HL to acquire a new customer and some commission.

It’s interesting to watch the development of M&G Wealth, which comprises Ascentric and Prudential Financial Planning, and very recently bought Sandringham FP, which plans to continue to acquire other advisers. On paper the strategy looks sensible, but the history of institutions acquiring IFAs is mixed to say the least. Why is this?

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