Aviva calls its £385m M&A in advisory a one-and-done deal; will go organic from here on out

Aviva has closed its M&A plans on what it considers to have been a one-and-done stab at the wealth advisory segment with its  just-announced purchase of Succession Wealth, officials insisted after revealing the deal.

“The one gap we had was scale in advisory and I think we filled that this morning,” Blanc said. Beyond the financial advisory, “we don’t really have any gaps in our offering” that would require plugging via M&A, she said.

“We really believe that our customers need this,” Blanc said of the new advisory capacity in the group. Allowing pension age savings clients to take their business elsewhere upon retirement has been a “strategic miss” for Aviva.

Future growth throughout the group is most likely organic. “This is largely going to be an organic strategy,” Blanc said. “There is always going to be a really high bar for M&A investment.”

The new unit, with its own track record of consolidating smaller advisories, will continue to sweep up minor players. But major M&A bills are not likely forthcoming.

“They will continue with their strategy of consolidation as that is an important part of what they do,” Aviva CEO Amanda Blanc (pictured) said. But such small deals will be immaterial to the larger Aviva group while any larger deals would “face a high bar.”

Succession Wealth is not immediately earnings accretive to Aviva, but CFO Jason Windsor claims integration, the move to the Aviva platform and the pending boost to AuM offer “opportunities through the value chain to improve margin further.” Addition of the new unit could push Aviva into a higher-margin end of the advisory business, CEO Blanc added.

Aviva is paying £385 million cash for the independent financial advisory in what is chiefly a bid to retain the c.£6 billion of pension and heritage assets that leave to be invested with competitors each year, Aviva said pre-session.

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