Merger puts Glasgow asset manager on growth trajectory

The deal complements Davidson’s strength in the corporate sector, where its clients include hotel groups Malmaison, Hotel du Vin, Radisson Blu and The Dorchester Hotel Collection, with Stewart Hastie’s expertise in the private wealth market.

And it reunites Davidson boss Russell Davidson with David Hastie, the managing director of Stewart Hastie, in a working capacity. The duo worked alongside each other at Scottish Amicable, prior to its acquisition by Prudential in the 1990s, with Mr Davidson later working with Mr Hastie under the Stewart Hastie “umbrella” when he began his career as an IFA (independent financial adviser) in 2000.

The two are close friends and began exploring the possibility of working together again several months ago. Mr Davidson said: “It’s actually a totally perfect marriage from the point of view of complementary skills.”

The merged business will have offices in Glasgow and London, where Davidson already operates, with David Hastie taking on the newly-created DAM Wealth Management.

Mr Davidson said the merger was driven by its aim to broaden the service it provides wealthy clients approaching retirement.

DAM, which grew turnover by 30 per cent to more than £1 million in the year ended March 31, has until now focused on advising corporate clients in areas such as auto-enrolment, pensions, employee benefits, mortgage advice and wealth management, trading as DAM Good Pensions.

With the wealth management side of his business steadily growing, he said the arrival of the Stewart Hastie expertise allows it to “raise the level of service we offer on the private side”. Stewart Hastie’s clients will also move across to DAM.

Mr Davidson, who is projecting a further leap in turnover to £1.5m in the firm’s current financial year, explained: “We wanted to provide more specialised investment services for our clients as they become older, have larger funds under management and are looking specifically to plan for retirement in that 50-plus age group.

“As a result of the merger we are now going to offer dedicated lifetime and cash flow planning software which will allow these clients to plan in a more comprehensive manner. DAM will also launch its own risk-graded portfolios which have a robust investment process behind fund manager selection and ongoing review for clients.”

Mr Davidson added: “There is no doubt that there will be economies of scale in the merger, however the fundamental driver was to deliver a better service to our clients that we can only see growing in the next five to ten years.”

Mr Hastie, who will be responsible for driving the private client side of the business, said the deal would build on the success it had with its previous partnership with independent financial planning company Johnston Gray & Wardrop in the last two years, under Fitzroy Wealth Management. He said that arrangement helped grow his clients’ wealth by delivering a “personal approach”.

“As a result of the expansion of my corporate business, a national presence is now required with offices in London and Glasgow to deliver that level of corporate expertise and high-quality financial advice,” Mr Hastie added.

“Russell will head up the corporate side of Davidson Asset Management under DAM and my focus will be on the personal wealth management division, with us being both well placed in our specialist roles to deliver high-quality financial service to our expanded client list.”

The deal comes amid what Mr Davidson describes as an “insatiable” appetite from savers for advice on their investments, notably among those aged 50 and over. Many have a range of pensions and investments products, including stakeholder pensions, which need to be organised as retirement age approaches.