A Scottish wealth manager has been acquired by a London-based investment business amid a shake-up in the sector.
Cornerstone Asset Management, which has offices in Glasgow and Edinburgh, has been bought by Waverton Investment Management for an undisclosed sum.
The deal will allow Waverton to increase its presence in the financial planning market and provide additional distribution capacity for its asset management products.
READ MORE: Wealth manager eyes acquisitions in Scotland
Cornerstone has around 1,000 clients and advises them on £500 million funds. It employs more than 20 people.
By becoming part of a bigger group Cornerstone will be able to broaden its service offering.
Cornerstone was founded in 2010 by a team led by Alan Reid, who spent 15 years at Lloyds TSB.
The business capitalised on the boom in demand for advice that followed the Retail Distribution Review.
This barred firms that provide investment products from paying commissions to advisers from the end of 2013, and ushered in fee-based advice.
READ MORE: Does sale of Standard Life brand bode ill for Scotland's once might pensions industry?
Pensions freedoms introduced in 2015 have also helped fuel demand for the services of advisors.
Waverton has provided asset management services for Cornerstone since 2012.
It had £6.9 billion of assets under management at 31 December. Clients include private investors, charities and institutions.
The group acquired the London-based financial planning and investment advisory business, Timothy James & Partners in 2019.
A spokesperson for Waverton said no changes were planned in respect of staffing at Cornerstone or the company’s office locations.
Acquisitions can allow investment management firms to bulk up in a sector in which scale can be an important factor. Larger groups may find it easier to fund the investment required in IT systems and regulatory compliance.
READ MORE: Edinburgh fintech that supports valuable jobs facing £145m takeover
A range of asset management businesses, including Standard Life Aberdeen, have used acquisitions to expand in the market to provide people with financial planning advice.
The 7IM (Seven Investment Management) business chaired by Scottish financial services sector heavyweight Adrian Grace recently underlined its appetite for deals in the wealth management sector in Scotland. “Distribution is important to us and we’ll clearly continue to look at distribution,” said Mr Grace.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here