"And the strategy we are pursuing is certainly not linked to timing. In all businesses you have to prepare a five to 10-year plan, and whenever the current owners exit, the new owners would want to see the plan – they are not going to throw everything away.”
He is also mindful of the risk of over-paying for advice businesses, saying he has noticed, across the 12 completed deals, an “incline” in the price paid.
Buying time
Woodhouse says one can track this by looking at the share price movements of listed wealth management first, such as Rathbones. He says the sellers of advice businesses tend to apply the multiples at which the listed businesses trade to the advice companies they are selling.
He says in such a market it requires “discipline” to not overpay for an acquisition.
Tilney, in common with many other financial services businesses, faces the threat of disruption to its business model from robo-advisers and also from the rise of equity trading platforms such as Robinhood.
Woodhouse is coy about what the relaunched version of the Bestinvest platform could look like, but implies he sees it as part of his company's solution to the issue of reaching younger investors.
He says Bestinvest must not be “just an execution-only investment service. It has to be part of our purpose to bring advice to more people – Bestinvest is about educating and coaching. And we think that as people’s affairs get more complex, they may move from Bestinvest into some of the other services we offer, though of course many will continue as Bestinvest clients.”
David Thorpe is special projects editor at FTAdviser
