Interactive Investor has bought Alliance Trust Savings in a deal worth around £40 million.
The deal represents the latest step in II’s drive to expand and follows its acquisition of Trustnet Direct last year and TD Direct Investing in 2016. It comes after months of speculation about the destination of Alliance’s struggling savings platform which lost £19.3 million in 2017.
The acquisition will boost II’s customer base by around 100,000 to more than 400,000 and follows a series of other mergers including Aegon’s purchase of CoFunds for £140million and Standard Life’s purchase of Elevate in 2016. The wealth management space is converging with groups looking to solidify their positions.
“The completion of the ATS acquisition is an important milestone,” said Richard Wilson, Chief Executive Officer at Interactive Investor. It cements our position as the market challenger in the UK direct-to-consumer marketplace and adds essential scale to support the on-going technology and talent investment needed to drive our customers’ service experience ever higher.”
Business as usual for Alliance Trust Savings?
For most customers, business will continue much as usual. It brings together two organisations which charge a flat fee model which means customers are charged for what they do on the platform rather than how much they are worth.
The deal includes ADT’s head office in Dundee where it has been based since 1888. It will continue to be its headquarters and the combined group will maintain its presence in Scotland.
“When it comes to the advised and partnership part of the ATS business, we have been talking and listening. With the keys to the door, we can start to lay down plans. Meanwhile, advisers and partners should expect business as usual,” Wilson continued.
II says Alliance customers will benefit from their larger scale, Netflix style monthly fee and access to 40,000 UK and global securities on 17 global exchanges. They will also get access to II’s award winning original content from leading journalists.
Global expansion for Interactive Investors?
For Interactive Investors this deal represents another stage in its goal for wider expansion to deliver the best investment platform out there. Alliance, meanwhile, is using this deal to refocus on its global equity platform. Already it has sold its in-house investment arm to Lion Trust Investment Management. It will use the proceeds of this sale to invest in its global equity portfolio to be overseen by Willis Towers Watson.
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Tom Cropper is a financial journalist with work which has appeared in titles such as the Guardian, Euromoney and many others.