Insurance broker Towergate has offloaded its financial planning business to private equity investors for £8.64 million.

Towergate Financial, which provides financial and mortgage advice, was first put up for sale in 2013 after the Maidstone firm’s board decided it was no longer a core part of the business.

Palatine Private Equity, a London-based company, has bought the firm in a deal which was initially due to be completed at the end of last year but was put on hold after the insurer began restructuring its £1 billion debt, which it completed in February.

Towergate said it does not plan to dispose of any other parts of the business.

The firm has also hired another former staff member of its US rival Arthur J Gallagher, appointing Sarah Dalgarno as chief risk officer.

Interim chief executive Scott Egan said: “I’m delighted to announce that another senior industry leader is joining Towergate, showing our ability to attract the very best talent.”

"This action further illustrates the momentum Towergate has gathered following its proposed restructuring...” - Scott Egan, Towergate

He added: “The sale of Towergate Financial is further evidence of a commitment to our core strategic focus, which is to build on our market-leading positions and distribution capabilities in SME insurance and specialist personal lines.

“The provision of independent financial and mortgage advice sits outside these markets and has now found a more fitting home with Palatine Private Equity.

"We look forward to an ongoing and mutually beneficial relationship with the business post sale, as a distributor of complementary products and advice.

"Towergate Group is absolutely focused on the opportunities as we continue to revitalize the group.

"This action further illustrates the momentum Towergate has gathered following its proposed restructuring.”