Edinburgh-headquartered Tweed Wealth Management has been active in the acquisitions space over the last few years and shows no sign of stopping.
In January 2022, the firm completed its fourth acquisition with the purchase of Inverness-based John Home Wealth Management for an undisclosed sum.
The firm has a staff headcount of 21, of which 10 financial advisers, including six chartered individuals, e based across the company’s three offices in Edinburgh, Inverness and London. But unconventionally, it is in Scotland where the firm sees acquisitive growth.
Chris Tweed, co-founder and chief executive at Tweed WM, told International Adviser: “There are acquisitions that we’re currently looking at and geographically those are currently more in the Scottish Highlands, which is a really big area of focus for us, as well as Edinburgh.
“We’ve put together a document and a framework to guide our strategy on what we feel works from an acquisition point of view.
“We’re only a small to medium firm ourselves. There is a limit to the size of firm that we can look at. But usually, we will limit it to family or small businesses with no more than three or four advisers and somewhere between £50m-£150m ($197m, €177m) assets under management.
“We don’t start the year saying we have to specifically complete a certain number. At the beginning of this year, we know that there’s one target that we’re working on and we have put a lot of work into it. It is 15 months in the making and we’re keen to conclude that.
“If that is the only deal that is concluded this year, we will be very happy.”
Competition
The St James’s Place partner firm is one of many companies active in the advice M&A merry-go-round.
Large advice giants and consolidators dominate the market – which means that smaller acquirers can be left to pick up the best of the rest.
But Tweed does not think that way about Tweed WM’s position in the acquisition space.
“I think there’s a pretty decent opportunity for smaller firms because there’s usually a vacuum left by the big players. The smaller, often family-run businesses are not big enough for them to be interested in and the bigger players usually focus on funds under management and whether the acquired firm is a standalone operation.
“Whereas, we usually look for something where we feel will add value. It is not about building number of funds under management, because we pride ourselves on operations that we have put together.”
Changing priorities
Tweed WM has an office in London – but the company does not want to grow out its operation down south and believes Scotland is the way forward.
Tweed said: “Our focus has changed. When we started, traditionally, our client base was half London and half Edinburgh.
“We thought we would grow in London despite being based in Edinburgh. For quite a few years, that was our thinking and our main focus. But now we’ve completely changed our strategy to be a national firm in Scotland.
“Where we used to look to London, we now looked at places like the Highlands, which is clearly completely the opposite. We still have lots of great clients in London, but as an area that we’re looking to grow, I don’t think that desire is there anymore. We enjoy having a presence there, but I think our growth will be in Scotland.
“We had good exposure in Glasgow, Edinburgh and Dundee. But we want to become a national Scottish firm, and we need to offer our services to the whole of Scotland not just to one concentrated part. This made us look in the Highlands. There is a great opportunity for us to build out there. Since tapping into the market, we’ve actually realised that it’s a massive untapped opportunity.
“There is less competition, but there’s also some great standalone opportunities. We actually think that the Highlands will be equal to our operations in Edinburgh in terms of future productivity, which completely surprised us because we didn’t set out with that in mind.”
Growth as an SJP partner
Not every small- and medium-sized company has the backing of an advice giant like SJP, but Tweed WM can get help from the wealth manager from compliance to due diligence on deals.
Tweed added: “I think in general, it’s positive. I think one of the big benefits to being an SJP partner is that it does give you access to capital and an ability to get access to financing opportunities that may be much more difficult if you were just an independent entity.
“There’s an awful lot of shared knowledge and resources for us, in terms of going through the acquisition processes, going through due diligence, dealing with legal and structuring deals, there’s such a history of that within SJP and you can draw on that resource whenever you need it.”
Alison Welsh, co-founder and managing director of Tweed WM, told IA: “We’re building on our personal Tweed Wealth Management brand, but it is obviously comforting from that we have the support of a FTSE 100 company behind us as well as the infrastructure, training and compliance system in place.”
Second careerists
Tweed WM are not solely focused on acquisitions – and have an organic growth plan too.
One of the key areas that the firm wants to build on is its intake of second careerists.
IA interviewed ex-professional rugby player Michael Allen, who is now a financial planner working for Tweed WM.
Tweed added: “Three of our 10 advisers are ex-professional rugby players. They didn’t have experience working as advisers, but we were able to see that they were they had all of the basic criteria that you look for in recruits, and they have been extremely successful since joining and gaining their qualifications.
“I see second careerists as a massive route for us for finding new advisers. I know other practices often deal with ex-military personnel and people with backgrounds like that. Again, I could see that being a great source. But I would be very surprised if we don’t see more ex-rugby players coming to us because we have that critical mass.”
Long-term aims
The company said that in its 10-year plan, it would like to double its assets under management and have in excess of 50 team members.
Tweed WM’s current AuM is around £380m ($518m, €456m).
Welsh added: “We want to bring a lot more new people into the industry. We want to be recognised as a place to go for people for enthusiastic career changers or graduates. We want people to think Tweed Wealth Management is where you can go to get the grounding you need to get into the industry.
“Also, we want to have a strong Scottish brand and have a presence throughout the whole of Scotland.”
