IFAs putting firms up for sale to beat expected CGT changes

Advisers want to make sure they don’t ‘incur higher tax burdens’

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UK wealth management company Mattioli Woods is no stranger to financial advice acquisitions and it expects the rise in M&A activity will not change anytime soon.

During its interim results for the six months to the end of November 2020, the firm said it believes “consolidation within both wealth management and Sipp administration” will continue.

Mattioli Woods added in the London Stock Exchange statement: “We are seeing a number of opportunities arising from retirement sales and in advance of potential UK budget changes which could see sellers incurring higher tax burdens.”

This comes months after Giles Dunning, partner at Stephens Scown, urged advice and financial planning firms that wish to sell their businesses to do so before the Spring budget, as it is likely to bring tax hikes including a rise in capital gains tax (CGT).

Strategy

This rise in M&A activity has given Mattioli Woods incentive to continue its acquisition strategy.

The wealth firm said: “Following a restructure of our executive, non-executive and senior management teams, we will seek to build on our track record of successful acquisitions by continuing to assess opportunities that meet our strict criteria focussed on strategic and cultural fit, enhancing our client proposition and enhancing distribution, technology with the potential for synergies and integration to the group.

“The pipeline of strategic opportunities remains strong and of higher quality than that we have seen for several years.”

The firm has invested over £81m ($111.6m, €92.2m) in targeted acquisitions since its admission to the AIM Stock Exchange in 2005, bringing 26 businesses or client portfolios into the group.

It most recently bought Twickenham-based wealth management advice and administration firm Montagu in a deal worth up to £2.34m.