Financial Planning and wealth management firms Smith & Williamson and Tilney have agreed to combine the two firms.

The merged business will be named Tilney Smith & Williamson and, according to the two companies, will be the UK’s leading integrated wealth management and professional services group. 

The combination of Tilney and Smith & Williamson brings together two established wealth management and professional services businesses, founded respectively in 1836 and 1881.

Smith & Williamson shareholders will receive £625m, to be paid through a combination of cash and shares in the enlarged group.

Smith & Williamson management shareholders will be rolling the majority of their investment into the equity of the enlarged group.

The transaction values the combined business at £1.8bn with combined revenues of around £500m and EBITDA of £150m. The transaction is expected to be completed in early 2020, subject to regulatory approvals.

The boards of both firms believe that the merger will deliver “long-term benefits for clients, employees and investors”.

In a joint statement they said the combined group will:

• Create a unique and differentiated client proposition, covering professional services, Financial Planning and investment management;

• Share a fundamental commitment to client-centric values;

• Benefit from an expanded office network across 36 towns and cities in the UK, Ireland and the Channel Islands;

• Deliver investment services that can cater to the full range of clients’ investment needs, including execution-only investing, investment advisory services,
centrally-managed and bespoke discretionary investment management;

• Have a powerful, multi-channel capability in its investment and Financial Planning business, allowing clients to interact in a way that best suits them,
including face-to-face, an online platform and over the phone;

• Provide clients with continuity in the relationship with their investment manager, Financial Planner or professional services team; and

• Through increased scale, enable enhanced investment in technology for the benefit of its clients.

The board of Tilney Smith & Williamson will comprise representatives from both firms. 

The chairman of the merged business will be Will Samuel and Chris Woodhouse will be group chief executive. Kevin Stopps and David Cobb, joint-CEOs of Smith & Williamson, will join the board of the enlarged group.

Chris Woodhouse, chief executive of Tilney, said: “The merger of Tilney and Smith & Williamson represents a compelling combination and together we will look to build on the considerable and complementary strengths of both firms.

“Like Tilney, Smith & Williamson has an excellent reputation for looking after its clients over many years and we recognise the value its culture and expertise will bring to the combined group.

“Tilney Smith & Williamson will be responsible for over £45bn of client assets, of which 80% is in discretionary mandates or funds. It will have a significant number of trusted advisers, including approximately 280 investment managers, 260 Financial Planners and a professional services business with circa 150 partners and directors."  

A statement from David Cobb and Kevin Stopps, co-chief executives of Smith & Williamson, read: “We are delighted to be merging with Tilney, a business that we believe is an excellent partner for Smith & Williamson.

“The combination of our two businesses creates real scale, broader capabilities and complementary service offerings, enabling the merged group to enhance existing client relationships and win a higher share of new business opportunities."