Tavistock has conditionally raised £2.7 million through a placing of new shares at 1p and 2p each in the company.
In an announcement, Tavistock said that they wanted to increase the scale of the group’s operations, "specifically increasing the size and geographic spread of the advisory business and thereby offer the group’s investment management services to asignificantly larger audience. The acquisition of Financial is designed to achieve both of these aims fora comparatively modest cost."
Financial Ltd announced last week that they were seeking investment after their latest accounts revealed post-tax losses of over £120,000 for the 2013/14 financial year.
The losses come following news in July that FCA has used its suspension power for the first time to ban Financial Ltd from recruiting new Appointed Representatives and individual advisers for a period of four and a half months.
Tavistock announced:
"Having had its compliance processes scrutinised by both independent professional advisers and the regulator over an extended period, the Directors believe that Financial now has robust, effective and compliant systems in place across its business and it is the ambition of its management team is to set industry leading standards for the supervision of advisers.
"The directors of Tavistock are confident that adequate provision has been made in Financial’s audited accounts for those matters that have yet to be fully resolved (the remaining past business reviews for pension switches and UCIS) and acceptance of all cases by the company’s PI insurers further secures the financial position of the business.
"However, the commercial legacy of past difficulties has left Financial short of working capital for both regulatory and operational requirements. This situation has enabled the Company to negotiate favourable terms for the acquisition."
The reverse takeover deal will create a group of 324 advisers and increase funds under advice by the group to an estimated £3 billion.
