Regulatory due diligence on mergers & acquisitions

We’ve advised on acquisition transactions worth over £2.5 billion in the wealth management sector alone, supporting regulated businesses in conducting due diligence for their acquisitions.

Our clients include some of the best known global private equity managers and the most prolific wealth management consolidators. We’re happy to work independently or as part of a team of advisers.

If you’re looking to acquire a regulated business, our regulatory acquisition due diligence service can be tailored to meet your needs. You can select the full service or, if you’re comfortable completing some elements yourself, you can just select the areas you require assistance with.

We’ll help you understand the regulatory risks and find solutions to mitigate them

Our team will undertake an initial ‘red flag’ analysis, looking at historic advice, professional indemnity insurance, and a suitability review using a sample of higher risk advice such as Defined Benefit transfers – why incur legal and financial due diligence costs if it’s clear from the outset the business doesn’t match your risk appetite?

We’ll also agree the scope with you, looking at:

• Governance
• Systems & controls
• Consumer Duty
• Senior manager & certification arrangements
• Assessing legacy risk
• Professional indemnity insurance
• Anti-money laundering
• Complaints
• Regulatory capital
• Regulator relationships

How our regulatory acquisition due diligence works

Our regulatory acquisition due diligence is delivered by our expert and experienced team, and can cover the following areas:

• Governance and systems and controls review against regulatory expectations
• Consumer Duty
• Standard and non-standard FCA correspondence
• Financial returns, including compliance with prudential requirements and group consolidation
• Advice suitability assessments, including pension transfer advice
• Analysis of historic business written and the potential liabilities contained within it
• Professional indemnity insurance, including exclusions and the geographical base of the insurer
• Client money and client assets
• Financial crime controls, framework, and processes
• Complaints
• Senior Managers and Certification Function roles, responsibilities, and contracts

Prudential consolidation

Where one regulated firm is acquiring or merging with another, the impact on capital and liquidity requirements can be significant. Our prudential experts advise on consolidation groups and the effect of merging firms with different prudential rules. We’ll carry out in-depth work on governance documents including ICAAPs, ILAAPs, ICARAs, and wind down plans to ensure you stay compliant.

Change in control applications and permissions

We’ll get your s178 Change of Controller application approved by the FCA before the transaction can be completed. Our team will liaise with the regulator prior to submission, draft and submit your application, handle questions or queries from the FCA, and attend any meetings as required.

If necessary, we can also assist you with a Variation of Permissions.

Action plans and reporting

The are likely to be some aspects of the target firm that could benefit from enhancement. Our due diligence report will provide an action plan for addressing these areas.

Integration support

We’ll build and implement a detailed integration plan from the commercial strategy laid out during the acquisition process. Our experts will also make sure your compliance systems and controls meet regulatory expectations and are sustainable, and scalable, as you continue to grow your new business.

Compliance systems and controls integration

When two firms are brought together, there can often be a mismatch with compliance integration. We’ll align your systems and controls to optimise your commercial integration strategy.

Updating policies and procedures

While updating your policies and procedures is a necessary step in the M&A process, merging your compliance systems and controls should be treated as an opportunity to review and refresh your existing policies. We have extensive experience of drafting and reviewing policy documents and will help you take a pragmatic approach to meeting current regulatory standards.

Culture and governance

Focusing on your firm’s culture and governance should be at the top of your post-merger to do list. We’ll use our regulatory expertise to review your governance structure and framework. This will help you embed the right culture into your firm, setting the tone from the top.

Systems and reporting

Compliance functions are using increasingly complex systems to deal with multiple reporting requirements. We’re familiar with technology used across the industry, clarifying what will help you meet regulatory standards while being cost effective.