Financial Services Firm Tilney Targets Smith & Williamson for Merger

Tilney is a financial planning and investment firm with head offices in Mayfair, London. The company is part of the Tilney Group and offers financial planning, investment management and investment advisory services to private clients.

The board of Tilney has confirmed that it is in exclusive discussions with Smith & Williamson about a potential combination of the two businesses.

Smith & Williamson confirmed that talks are underway and that the accounting arm of the firm is part of the ongoing talks.

Smith & Williamson, founded in Glasgow in 1881, is ranked at number eight in the Accountancy Daily Top 75 Firms annual survey. The firm’s business model is based on a mix of financial and professional services, with a significant managed funds business.

Its financial results, released in July, showed operating income increased 4.3% year-on-year to £278.1m while adjusted operating profit increased by 4.8% to £48.4m.

Professional services income, including revenue from tax and business services was up 6.5% to £104.7m, although the firm changed its reporting lines this year.

The funds under management and advice service line increased by 6.5% year-on-year to £21.4bn.

The bid from Tilney, reported in the Sunday Times, comes two years after listed wealth manager Rathbones tried to buy Smith & Williamson. In August 2017 Rathbones, which manages over £32bn of client funds through Rathbone Investment Management proposed a merger, but talks were called off the following month.

At the time, Smith & Williamson said it intend to pursue a public listing and confirmed this view on publication of its latest results.

If the deal goes ahead, the combined business would have about 250 financial planners, 240 investment managers and more than 100 partners in professional services.

There has been a flurry of mergers and acquisitions among wealth management firms in recent years, driven partly by increased regulatory supervision and the need for economies of scale.