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Standard Life Aberdeen eyes £30m IFA swoop on Grant Thornton

(c) Sky News 2019: <a href="">Standard Life Aberdeen eyes £30m IFA swoop on Grant Thornton</a>

Standard Life Aberdeen (SLA), one of Britain's biggest asset managers, is in talks to snap up a unit of Grant Thornton (GT), the accountancy firm, that advises affluent clients on their financial affairs.

Sky News has learnt that 1825, SLA's financial advice arm, has entered into exclusive negotiations to buy GT's wealth advisory business for approximately £30m.

If completed, the deal would add about 100 employees to 1825, including a handful of partners and roughly 30 individual financial advisers (IFAs).

It would be a more significant transaction than its modest financial outlay would suggest because of the implied consequences for the future of both 1825 and GT, the UK's sixth-largest audit firm.

One City source said that GT's management had decided to explore a sale of the IFA business in order to streamline its focus and distance itself from potential conflicts of interest at a time when the UK audit profession is under unprecedented scrutiny.

However, a number of the firm's financial advisers are said to have expressed reservations about a prospective takeover by 1825.

Standard Life acquired a string of regional IFA businesses including London-based Baigrie Davies, Jones Sheridan in Crewe and The Munro Partnership in Scotland, all of which were taken over in 2016 - prior to their new owner's £11bn merger with Aberdeen Asset Management.

Insiders said that some members of GT's national IFA network had raised private concerns that it would be broken up and apportioned to 1825's regional operations if the deal with SLA went through.

GT has been through a period of turmoil, even as its larger rival BDO has capitalised on uncertainty surrounding the business model of the 'big four' auditors amid a growing political clamour for reform of the profession.

Last year, its chief executive, Sacha Romanovitch, was effectively forced to quit after anonymous attacks on her leadership.

Her successor, David Dunckley, has faced criticism for remarks made to MPs probing the audit profession, and has yet to announce whether GT will seek to re-enter the market for new audit tenders undertaken by FTSE-350 companies.

For SLA, the acquisition of GT's IFA unit would bolster the size of 1825 at a time when analysts have raised questions about its future within the group.

The Edinburgh-based asset manager has had a torrid time since it was created from one of the UK financial sector's biggest post-crisis mergers in 2017.

It recently announced that it was scrapping its co-chief executive structure, with Keith Skeoch taking sole charge and Martin Gilbert, the industry veteran, becoming vice-chairman.

Shares in SLA have slumped by more than a third during the last 12 months.

SLA and GT both declined to comment on Wednesday.