2plan to snap up Park Row advisers in £1m deal

The FSA is expected to this week sanction the bulk transfer of around 200 Park Row advisers to up-and-coming national IFA 2plan Wealth Management in a deal worth a possible £1m.

2plan chief executive Chris Smallwood and managing director Chris Davies met with the regulator on Tuesday morning to discuss the move, a meeting which IFAonline has been told "was very positive". The FSA will make its decision on Friday.

Park Row will be subject to a solvent wind-down of the business and CEO Peter Sprung will retire.

It is understood 2plan will pay up to £5,000 per adviser but the amounts will depend on each adviser's earnings potential and figures will be agreed between the companies.

A 'bulk' transfer is the preferred option for all parties, as it involves the FSA simply switching advisers' authorisation details on its records.

The deal, if completed, will take the number of advisers at 2plan toward 400 in just two years of operation.

Park Row was impressed by 2plan's business strategy and the two companies are both based in Leeds, meaning many of Park Row's advisers can simply switch to nearby premises.

Royal Liver received 12 approaches for the Park Row business, including from Sesame, Tenet and Positive Solutions. In the end only two firms were in the frame but 2plan agreed a first refusal option.

The future of Park Row has been the subject of speculation for months. Royal Liver bought the distribution business in 2003.

Earlier this month, Royal Liver announced it was "considering carefully" the future of its investment in Park Row after the IFA posted a bigger-than-expected £2.17m loss for the first six months of the year.

The company posted a turnover of £4.3m to the end of June, less than 70% of its anticipated budget.

Royal Liver said it intends to focus its efforts on its manufacturing propositions, Progress and Caledonian Life.

2plan chief executive Chris Smallwood says improving business at the IFA means it is becoming less reliant on investment from its major shareholder Standard Life, which owns 15% of the business.

The company initially received £4m from Standard Life at launch and drew down an extra £1.75m late last year.

Smallwood says the company may require an extra £700,000 from the asset manager this year followed by another £1m next year.