It's been too long since I last made it to a company presentation. So when I found out that Equity Development were putting together an evening with two of my recent holdings I was quick to book a place. Of course you don't go to these events just to meet management; half of the fun is catching up with other investors and throwing some ideas around. On that front it was a fun evening and it's great to see Equity Development being so active under new management.
Tatton Asset Management (LON:TAM)
To kick off the evening Paul Hogarth, CEO, bought everyone up to speed on the services that Tatton Asset Management provide and where they hope to grow. Despite them being listed for almost three years I had no prior knowledge of the company so this was a useful introduction. On one side of the business there is the Investment Management Division which offers discretionary fund management (DFM) to IFAs on UK platforms. This is attractive to IFAs because they don't want to manage client assets and Tatton offer a very low fee of just 15 basis points including VAT. This is substantially cheaper (by 50% or more) than competitors which probably explains why Tatton has by far the largest AUM (at last count ~£7bn) in the DFM space and is still growing rapidly. Another key point is that Tatton design portfolios to match a client's risk profile and this is critical given regulation in this area.
The other, complementary, arm to TAM is Paradigm - the IFA support services division. This provides back-office operations for IFAs along with compliance services (much like SimplyBiz) and a mortgage club (similar to Mortgage Advice Bureau). This is an attractive model for IFAs as it reduces paperwork, removes risk and allows them to focus their time on servicing clients. It's also uniquely beneficial for TAM as it allows them to gather feedback and understand the needs of IFAs. Contrary to popular belief the advice market remains very healthy, with plenty of customers to go round, but the number of IFA firms is pretty static. This is a double-edged sword in that TAM have around 10% of the 5000 directly authorised firms on their books, which suggests that good growth is possible, but these IFAs are also sticky and don't tend to move platform.…
