Tilney and Smith & Williamson confirm merger talks
A merger between the two firms would form a £45bn group and one of the largest wealth managers in the UK, in terms of assets managed.
Competitors Tilney and Smith and Williamson (S&W) have both confirmed they are in talks over a possible merger following media speculation.
A merger between Tilney, a financial planning and investment firm and S&W, a professional services firm, would form a £45bn group and become one of the largest wealth managers in the UK, in terms of assets managed.
This is the latest sign that the industry is being forced to consolidate following regulatory pressure, with wealth managers across Europe having to adjust to tougher regulation stemming from the EU’s new Mifid II market rules. Introduced last year, the rules increased requirements on reporting and on communicating with clients.
An industry executive quoted in the Financial Times said that the potential merger would signal the death of the old-school stock broker, as firms prioritise scale and process over client relationships.
He said: “Compliance is driving this. Scale is absolutely essential. The cost of compliance is becoming an administrative cost.
“Most people want one organisation that can solve all of their various financial needs, so being able to tie that together is very compelling.”
Confirmation of Tilney’s approach to the S&W board came after an announcement made by AGF Management Ltd. to the Toronto Stock exchange on 18 August.
Tilney, who currently manage £24bn worth of assets, have been particularly focused on consolidation in a fragmented UK market, and have acquired a number of smaller rivals and independent advisory firms in recent years.
Two years ago Rathbone Brothers made a £2bn proposal to acquire S&W, who manage £21bn worth of assets, but Tilney made a late bid to hijack the deal, showing that they have had interest in merging with S&W for some time.
The deal between Rathbone Brothers and S&W fell through, and now, two years later, Tilney have reignited their interest. However, discussions are ongoing and there is currently no guarantee the deal will go through.
Tilney statement on merger talks:
Following recent media speculation, the Board of Tilney confirms that it is in exclusive discussions with Smith & Williamson about a potential combination of our businesses.
Resources & Whitepapers
Accounting Software The power of customisation in accounting systems
A merger of Tilney and Smith & Williamson would create a market-leading, integrated UK wealth management and professional services group with over £45 billion of assets under management.
These discussions are ongoing and there can be no certainty that a transaction will proceed. A further announcement will be made as and when appropriate.
Smith and Williamson statement:
“Further to the announcement by AGF Management Ltd to the Toronto Stock Exchange (18 August) regarding its shareholding in Smith & Williamson, the Board of Smith & Williamson confirms that it has received an approach and is in exclusive discussions about a combination of its business with Tilney Group.
“The respective Boards believe that a merger of Smith & Williamson and Tilney has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm.
“Discussions remain ongoing and at this stage there is no certainty that a transaction will proceed. A further announcement will be made in due course.”