UK-based Progeny has completed the acquisition of international wealth management company The Fry Group for an undisclosed sum, International Adviser can exclusively reveal.
The deal, which was first announced in June 2022, expands Progeny’s advice reach to Europe, Middle East and Asia, and also increases its total assets under management to more than £7.5bn ($9.35bn, €8.47bn).
The Fry Group is a wealth management firm which offers tax, estate and financial planning services. It has a team of 191 employees across four offices in the UK – London, Worthing, Cheltenham and Exeter – and four international offices in the UAE, Singapore, Hong Kong and Belgium.
Progeny chief executive Neil Moles spoke to IA about why the group is looking to enter the UK expat market.
He said: “I went to Australia met lots of financial planning firms out there, and recognised that a lot of expats over in Australia aren’t served in any way shape or form by any British financial planning firms. That became the start for me to do a lot more research and spend a lot more time in Australia and other countries just working out what the market looks like.
“I realised that Brits in overseas territories were really underserved because the model of financial planning in those territories was one we have long since moved on from in the UK. It was a commission sales-led environment. I sat down with my investors and said ‘I think there’s a strategy here with the millions of British people around the world that I believe are not being served as well as they could be’.
“The UK exports one thing amazingly well, and that’s regulation. We want to go into international markets and serve British people to the same level and standard as they would get in the UK, with a fee-based chartered financial planning proposition.
“It’s really hard to compete in the marketplace, where you’re honest about what you do, and actually tell people what you’re charging, but it is important that we do that.
“A lawyer working in a major firm in London could be transferred to Singapore for five years because that’s part of their career, and might have fantastic fee-based financial planning in London that they have to give up when they go to Singapore. I do believe there is a huge need and desire to replicate abroad what we have in the UK. ”
The Fry Group attraction
The Progeny chief executive also told IA about why The Fry Group gained his attention of all the offshore advice firms.
“First of all, I liked the territories it occupies, how long the company has been going and their deep understanding of the regulations in those territories was also hugely appealing,” he said. “I think when you’re entering into a new market, you need to know it well and they do.
“When you look at the Fry Group in detail, they deliver fee-based chartered financial planning overseas and it was one of the only businesses that we researched that did so.”
Moles also said that eventually The Fry Group brand will merge into Progeny.
He added: “I think you have to be careful and sensitive about this because this is a 120-year-old business which will have been through many stages in its evolution.
“We’ve taken a lot of guidance from external branding agencies. But I think ultimately, over time, Progeny will be the brand in those territories but we need to be mindful about how we get there.”
‘Lack of choice’
The international market has very few players – and it is refreshing to see a new entrant into the UK expat advice industry.
But Moles bemoaned the “complete lack of choice when it comes to providers”.
He said: “You look at the depth and quality across that, there is a very narrow number of people you could go to if you wanted the type of advice Progeny offers. I think when it comes to product and proposition, it’s even worse.
“A lot of that is tax-led, but investment propositions are just not stood up at all. You end up with people in Singapore having to invest in sterling funds because there’s no dollar denomination funds they want to buy. Then, they get caught in the tax treatment of that, which is not great.
“As part of our expansion into Asia and UAE, we will be launching a range of funds that are not only sterling denominated, but there’ll also be dollar and euro denominated.
“They would be only for Progeny financial advisers and clients. We believe to get access to our specialisms you have to be in the ecosystem. There will be a range of multi-asset funds, which are set up and structured in the right way in the right jurisdictions.
“We will make sure the tax treatment is dealt with correctly, and clients get access to the professional standard that we can hold ourselves to in the UK.”
One stop shop
Progeny offers a range of services – including financial planning, tax planning, legal services and asset management.
This is very different to the majority of players in the UK expat market.
“I think you have to look at the types of clients that you would attract in these territories, typically, what you will find in Singapore, Hong Kong and Dubai is that these are clients that are still accumulating,” Moles said. “These are not typically territories where British people would go and retire, actually it’s really hard to do that because of immigration laws.
“These people need a different proposition to those that are retiring on a decumulation strategy.
“If you look at what Progeny has created, we are horizontally integrated. What we take into these territories is the ability to do all the heavy lifting around someone’s professional and legal financial affairs.
“When you start to build a global proposition, and Fry have done this on a smaller scale, you find that these people will come back to the UK because they haven’t retired or emigrated.
“Therefore, if you can build a solid tax-led proposition – you can manage someone’s tax affairs in Singapore and in London, for example, and help them to move back in the most tax efficient way. It gives you a steady stream of clients coming back into the UK.
“I think this is a differentiator. But I don’t think it is a disruptor. We’re not really in that space. But it’s a huge proposition and a differentiator. We attract a lot of clients because we can do everything. When someone moves to a new territory, they don’t know what to do.
“Everyone these days is time poor. I think it’s really helpful to go to one source of truth, and know that it’s delivered in the same way as it is in the UK.”
Gap in the Europe market
One area that Moles sees an area of growth is in Europe – as he believes Progeny have spotted a gap in the expat advice market across the continent.
He said: “I think it’s a different type of market. In the main, it’s more of a retired and decumulation market. We’re all chasing the sun at some point as we get older. But actually, there’s a growing number of Brits that now work or have to work abroad because of Brexit.
“I think that’s a huge opportunity. I think what Brexit has created, and I can talk through my experience of acquiring UK financial planning firms, is historically people in Europe were looked after by British firms passporting into the EU. But now that’s not allowed.
“So, where are all these people going? I can tell you with certainty that every single business that we bought in the UK have had clients that were in Europe.
“We were trying to look after them but you can’t. I think there’s a huge opportunity in Europe to be the provider of choice for those people that now need to appoint a financial adviser in territory.
“I also think there’s an even bigger market – which I don’t think people have seen because everyone seems to be focused on the retired market – for Brits working in Europe.
“I think if you look at the big financial centres like Madrid and Paris, they will be full of British people now because anyone who had to create separation as part of Brexit, have had to pull people over to do so.”
Progeny has been synonymous with M&A deals in the UK financial planning market.
So, is this something we should expect of the firm in the expat advice industry?
“I think researching in the marketplace in those territories, I think deals will be very few and far between, if any,” he said. “The Fry Group is amazing as a business, what we bring is a different level of capital to allow us to grow organically in those territories.
“We have to establish the proposition and perhaps reset because we’ve got additional services that Fry Group didn’t have.
“We want to double and treble the size of each of those offices in the next three to four years. We’re approaching the £10bn mark, and we’ve done that in a relatively short period. We will aim to double to treble that over time as well.”
The UAE, Hong Kong, Singapore and Belgium will not be the end of Progeny’s growth.
The firm has global ambitions to offer services in the future to expats in Australia and Canada.
Moles said: “We commissioned a report about 10 weeks ago and we’ve got the first draft of it. We used some management consultants to look at where British people are going.
“It identified that there were two key regions. One was Canada and the other one was Australia. Specifically, Vancouver, and Sydney were the two places listed as growing faster than Dubai for UK expats.
“Certainly, they’re the two areas where we see good expansion opportunities. We would need to get licences and acquire in those areas. You need to go and buy something that gives you the regulatory framework and everything else, and then you can grow organically off the back of it.
“In five years’ time, I want people to see us as the go to firm in the UK expat market. We want to become the global platform for British people, wherever you live in the world. I would also like to prove the theory around opening up into new territories and successfully establish ourselves in new markets. I think that would be an amazing thing to do because not many people managed to do that in the last 10 years.”