A wealth management business founded in Plymouth has been bought by insurance giant Aviva in a £385m deal.
Succession Wealth was started in Plymouth in 2008 by founders Paul Morrish and the late Simon Chamberlain, and went on to become the UK’s largest independent wealth management and financial planning business.
Although it shifted its national HQ from Britain’s Ocean City to Birmingham in 2019 it retained its offices in the three-storey Drake building at Plymouth Science Park, where about 75 people work.
Aviva, which has just announced an underlying operating profits fall of 28% to £2.3bn as it sold off a raft of businesses, has nonetheless swooped for money-spinning Succession Wealth, which made a £4.6m pre-tax profit in 2020, saying the transaction significantly enhances Aviva’s presence in the fast-growing UK wealth market as more people seek advice for their retirement and savings options.
Aviva said the deal strengthens its wealth offering and accelerates its ability to offer high-quality financial advice to a significant number of its 6million pension and savings customers without an existing adviser.
The deal will also enable Aviva to retain more of the .£6bin of pension and heritage assets that leave to be invested with competitors each year. Aviva expects its scale and capabilities to support the expansion of Succession Wealth’s client and planning operations.
Amanda Blanc, group chief executive of Aviva, said: “The acquisition of Succession Wealth boosts Aviva's presence in the fast-growing UK wealth market; supports our strategy to grow sustainably; and expands Aviva's ability to offer high quality financial advice to millions of our customers."
Succession Wealth is a leading national independent financial advice firm with about 200 planners advising on £9.5bn of assets, delivering advice to about 19,000 clients throughout the UK.
It was started in Plymouth as Succession Advisory Services, a consultancy, and in 2018 rebranded from Succession Holdings to Succession Wealth, as it expanded from just a couple of people to a nationally-recognised near corporate.
The business began consolidating advice firms, acquiring nine businesses in 2017 alone, and has made 60 acquisitions to date. Mr Chamberlain died in 2017 and James Stevenson was brought in as group chief executive in January 2018. He said: “We are delighted to become part of Aviva and to offer our independent financial planning capability to Aviva customers who don’t have an adviser.
“The demand for financial advice across the entire wealth spectrum has never been greater, and the opportunity to combine Succession Wealth’s holistic financial planning expertise, with the capabilities and customer reach of Aviva is hugely exciting.
“The Succession Wealth brand and our core independent advice proposition is fundamental in providing ongoing stability and reassurance to our existing clients and our people as we embark on this new journey as part of Aviva.”
Succession Wealth now has offices in Aylesbury, Amersham, Bristol, Chester, Edinburgh, Glasgow, Harrogate, Rugby, Salisbury, Inverness, Stornoway, Gourock, Sheffield and London, in addition to Birmingham and Plymouth.
Succession Wealth will continue to operate as a separately regulated, independent, financial advice firm and will continue to use the Succession Wealth brand.
On a pro forma basis, including the benefit of four announced acquisitions, the estimated 2022 EBITDA (earnings before interest, taxes, depreciation and amortisation) for Succession Wealth is expected to be about £24m.
The transaction, funded by cash from Aviva’s capital, is expected to deliver a double digit return on invested capital in the medium term. The transaction is subject to FCA approval and is expected to complete in the second half of 2022.
The UK wealth market was worth an estimated £1.6tn in 2020 and is expected to grow by circa 7% per annum to £2.1tn by 20242. In addition, by 2039 it is expected that one in four people in the UK will be aged over 65, increasing the demand for financial advice. Through Succession Wealth, Aviva said it will have the capability to offer advice to about 4million of its workplace pension customers. The addition of an advice offering will allow Aviva to better support its customers as they go through critical life decisions, helping to retain more of the £6bn of pension and heritage assets that leave to be invested with competitors each year.
Doug Brown, chief executive of Aviva UK and Ireland Life, said: "We are excited to partner with the management team at Succession Wealth. They have built a great business over the years, and I am confident that Aviva’s scale, resources, capabilities and shared vision will enable Succession Wealth to further expand its leading client and planner proposition in the UK’s attractive wealth market. This acquisition will broaden our advice offering and will help our existing customers currently without an adviser to better secure their financial future.”
