Tony Delaney, who racked up 11 county hurling medals with Toomevara club in north Tipperary as a young man, has taken his knack for spotting openings far beyond the pitch. <\/p>\n
More than a decade after leaving a career with Bank of Ireland<\/a>\u2019s New Ireland<\/a> life and pensions unit to set up SYS Financial, a firm targeting employers and private wealth clients, Delaney is seizing an opportunity to grow the business at its fastest rate yet. <\/p>\n In the past year, SYS has agreed deals to buy 11 smaller financial brokerages around the country, leaving it on track to increase its assets under advice from \u20ac400 million to about \u20ac1.1 billion by the end of 2025. <\/p>\n \u201cConsolidation in the broker market is only starting to gain momentum,\u201d Delaney says. \u201cAnd we\u2019ve become a go-to for brokers looking to find a partner in recent years.\u201d <\/p>\n The number of deals in the pipeline for SYS means the 54-year-old is now talking about having \u20ac4 billion to \u20ac5 billion of assets under advice by the end of the decade. <\/p>\n To get to the next level, however, SYS is considering taking on a financial investor.<\/p>\n Delaney told The Irish Times this week he was in talks with a number of parties and said the process was \u201cat an advanced stage\u201d. <\/p>\n [\u00a0Tony Delaney\u2019s SYS Financial in talks with potential investors to fund deals<\/a>\u00a0]<\/p>\n While he hasn\u2019t ruled out handing over a majority equity stake, he\u2019s clear that his team will continue to be in the driving seat. <\/p>\n \u201cThe new investors will have to buy into our culture and not interfere with how the business is run on a day-to-day basis,\u201d he says. <\/p>\n \u201cThis industry is based on trust. When we are talking to firms considering selling to us, the big concern for people at the top of the firms is where their clients are going. They have to ask themselves, \u2018Can I walk down the street of my town and look former clients in the eye?\u2019.\u201d <\/p>\n While the general insurance broking sector has been the subject of a flurry of mergers and acquisitions over the past decade, consolidation in the financial advisory space \u2013 below the likes of the country\u2019s two largest banks\u2019 private banking arms and their stockbroking units, Davy<\/a> and Goodbody<\/a> \u2013 is in its infancy. <\/p>\n And way behind the curve compared to the UK or US.<\/p>\n But there are a few early leaders \u2013 typically backed by private equity firms, even if recurring fees, beloved by such investors, are less of a feature in the financial advisory industry than in insurance broking. <\/p>\n These include UK-owned and private equity backed Howden Ireland, and Fairstone Ireland; the Irish unit of Aon\u2019s NFP; and Irish family-owned companies such as LHK Group and Gallivan Financial. <\/p>\n [\u00a0How the Irish income tax system hits middle earners<\/a>\u00a0]<\/p>\n The market potential has also ballooned. Total net Irish household wealth has grown by 120 per cent to \u20ac1.25 trillion between the start of 2009, immediately after the financial crash, and the first quarter of this year, Central Bank of Ireland<\/a> data shows. <\/p>\n The wealthiest 10 per cent are behind almost half of the total.<\/p>\n But it\u2019s the expanding mass affluent, those with \u20ac100,000 to \u20ac1 million to invest, who are the prime focus of the most active consolidators. <\/p>\n Financial assets \u2013 which strip out money tied up in family homes \u2013 have almost doubled to \u20ac555 billion over the 16 years. <\/p>\n While about \u20ac253 billion was tied up in life insurance and pension entitlements at the start of this year, \u20ac212 billion was made up of deposits and currencies, the bank\u2019s latest quarterly household wealth report said. Other investments account for the rest of the \u20ac555 billion.<\/p>\n Irish households had a record of almost \u20ac169 billion on deposit with domestic financial institutions at the end of August, a separate Central Bank report has said. <\/p>\n About 85 per cent of this money was in current or on-demand deposit accounts, earning average interest of just 0.13 per cent a year \u2013 and seeing its value being eroded by inflation. <\/p>\n Irish households have grown their wealth by an average of 8 per cent a year over the past 11 years, faster than any other country in Europe \u2013 yet they remain significantly underinvested in traditional financial investments, at only 5.5 per cent of total assets, said a report published earlier this year by Fordel, a high-net-worth wealth management firm led by former Davy director Stephen Felle. <\/p>\n Meanwhile, some \u20ac295 billion in wealth accumulated by \u201cretired households\u201d in the State is set to be transferred to family and others over the next couple of decades, Goodbody estimated in a report earlier this year. <\/p>\n The growing number of buyers of brokers in the market is tempting many owners of smaller firms as they deal with their own succession planning, rising cost of regulation and compliance, and technology, as well as fierce competition for good advisers, sector participants say. <\/p>\n Having taken a large share of the estimated \u20ac100 million-plus proceeds from the sale of Gallivan Murphy Insurance Brokers (GMIB) to US financial services group Assured Partners three years ago, the Gallivan family of Killarney, Co Kerry, are committing a chunk of the proceeds to playing a role in driving tie-ups in the financial brokerage sector. <\/p>\n The family\u2019s majority-owned Gallivan Financial has completed four deals since 2023 and is preparing to announce two more in the coming weeks, said managing director Fergal Smith, who sees assets under advice reaching \u20ac1 billion by the year-end. <\/p>\n \u201cOver the next three to five years there\u2019s going to be a lot of movement in this space. We see the number of brokers declining from about 1,200 to 700-800 over that period. We have ambitious plans to grow to a national footprint,\u201d Smith said.<\/p>\n [\u00a0Should you still buy gold? The \u2018insane\u2019 rush may have some way to go<\/a>\u00a0]<\/p>\n \u201cWe want to build scale and provide back office and other supports to the financial planners in firms we are acquiring. The beauty for the principals of firms we have acquired is that they now have the freedom to do what they really want to do: work with their clients, while we\u2019ve taken away their main headaches.<\/p>\n \u201cThe big thing in our industry is that a lot of financial planners are of a certain age \u2013 without a succession plan for their business. Small operators are finding it hard to scale up and attract talent. <\/p>\n \u201cIf they join forces with a bigger business they can attract much more talent, who will be exposed to career progression and opportunities.\u201d <\/p>\n Irish Life<\/a>, the country\u2019s largest life and pensions group, was one of the early players out with the cheque book. <\/p>\n In 2018, the group bought Invesco, the Republic\u2019s largest independent corporate pensions and investments consultancy, and followed in quick succession by buying a number of other intermediaries, including Acumen & Trust, APT financial advice companies and Harvest Financial Services. Irish Life ultimately rolled these into a stand-alone wealth management business in 2023 called Unio. <\/p>\n Ian Brady, chief executive of Unio, which oversees more than \u20ac15 billion of assets, says that the almost \u20ac170 billion of deposits sitting idle in bank accounts \u2013 at a time when domestic inflation is running at close to 2 per cent \u2013 tells its own story. <\/p>\n \u201cThe Irish market is relatively underserved, with low levels of financial literacy,\u201d he said. \u201cWhile we\u2019re fairly good on pensions in Ireland, there is a low level of investment adoption and there is still a ferocious amount of money on deposit.\u201d <\/p>\n The hope in the sector is that Minister for Finance Paschal Donohoe<\/a> will make good on a signal in his Budget 2026<\/a> speech that he would look at establishing a tax-efficient savings and investment accounts regime as part of a roadmap to be published early next year to encourage investment among individuals.<\/p>\n Donohoe said the roadmap to \u201csimplify and adapt the tax framework\u201d to encourage retail investment would take into account the European Commission\u2019s recommendation last week that Governments establish savings and investment accounts regimes.<\/p>\n