Wrap platform Novia has acquired a 2.5% stake in advisory group Tavistock Investments for £250,000.

The wrap with one of its significant shareholders, Cocoon Investments, which owns a 23.5% stake in Novia, have joined together to buy the shares in Tavistock.

Tavistock is an Alternative Investment Market-listed advice network with ambitions to become a national.

Novia and Cocoon have also provided Tavistock Investments with a £750,000 loan, of which any outstanding balance after three years can be converted into shares in Tavistock at a fixed price of 7.5p.

Out of the total £1 million paid to Tavistock, Novia contributed £750,000 and Cocoon £250,000. 

Under the deal Novia will be a preferred platform for Tavistock’s adviser network Tavistock Partners, and its discretionary fund management arm, Tavistock Wealth.

Tavistock Wealth will also launch six model portfolios on the Novia platform from 12 September.

The deal follows Tavistock Investment’s acquisition of East Midlands-based IFA Country Life Pensions and investment manager Blacksquare.

Country Life Pensions was rebranded as Tavistock Partners and Blacksquare to Tavistock Wealth.

Country Life Pensions owns Sterling McCall Wealth Management, one of Novia’s largest adviser firm users, which put on £70 million of assets onto the wrap in February 2013.

Tavistock Partners has £400 million in assets under advice, with £140 million on the Novia platform.

Bill Vasilieff (pictured), chief executive of Novia, said the wrap made the decision after realising there would be further consolidation in the advisory market, making a growing IFA business an attractive investment.

‘The trend for the consolidation of IFA firms has accelerated post-retail distribution review,’ he said. ‘We like the Tavistock proposition for advisers and anticipate making an excellent return from our stake in the business.’

Brian Raven, chief executive of Tavistock Investments, said the deal was mutually beneficial.

‘Novia is one of our platforms of choice,’ he said. ‘It has also demonstrated a willingness to work with us for the benefit of our retail clients. We anticipate introducing substantial assets onto the Novia platform as our business expands.’