Wealth Management firm Frenkel Topping has announced it will be putting itself up for sale, in part of its strategy to ‘enhance’ their competitive positioning, following the Lord Chancellor’s announcement to slash discount rates for personal injury payouts on 27 February.
Frenkel Topping is a highly specialist Asset Manager, providing Independent Financial Advice, Wealth Management and Litigation Support Services to support the long-term well-being and financial goals of vulnerable individuals across England and Wales.
The business announced a formal sale process, saying it wants to combine with a larger strategic partner, in order to best take advantage of the opportunity made by the Lord Chancellor’s announcement concerning the changes to serious injury payouts.
The move to sell follows the Lord Chancellor’s announcement to slash the discount rate used to calculate compensation awards for serious personal injuries.
In a statement to the market it said: ‘The board is of the opinion that the scale of the opportunity presenting itself is sufficiently large that in order for Frenkel Topping to capture it fully and make the best use of its potential, it may require the group to combine with a larger, strategic partner.’
‘This would enable the group to take advantage of its competitive positioning more effectively and more quickly than it could be prudently expected to do on its own.’
The firm detailed that in order to ‘investigate’ the opportunity fully, they believe it is necessary to enter a formal sale process, in order to fully implement their strategy.’
Arguably the foremost reason for the move was the recent boost to revenue made through the by a change in the rules governing personal injury payouts.
Due to the nature of the policy change, the firm saw an increase in asset growth expectation for 2018 and 2019 by £80 million. It was a surprise move, with many insurers only expecting it to be cut to 1%.
Jason Granite, executive chairman today said: ‘While the competitive positioning and potential of the firm has been further enhanced by the Ogden discount rate review, the Board recognises that a strategic partner has the capability to maximise the group’s potential, to the benefit of our clients, shareholders, and employees.’
The advice service has said it has not received any approaches as of yet. Spencer House Partners will handle any approaches.
According to its most recent financial data, for the 12 months preceding 31 December 2016, the firm had £745 million of assets under advice, up from £666 million at the same point in 2015.
However, Pre-tax (operating) profit had fallen to £900,000, down from £1.3 million in 2015. The company stated this reduction in profit was a result of an accounting charge over issuing share options to members of the company.