Lighthouse has acquired a 5.3% stake in Tavistock Investments as part of a “strategic agreement” between the two firms.

Lighthouse bought the shares in Tavistock’s recent £1.25m fundraise.

In an announcement to the Stock Exchange, Tavistock revealed the funds would enable the company “to replace an existing, and relatively expensive, £2m debt facility with a new £2m five-year facility from NatWest Bank at a lower rate of interest.”

The statement added: “It is estimated that the company will save some £100,000 per annum in interest as a consequence of the change.

“The fundraising also strengthens the company's regulatory capital position as the business continues to grow.”

Lighthouse paid £1m for its stake in Tavistock and the two companies are set to establish a joint investment management service.

Malcolm Streatfield, chief executive of Lighthouse said: “Lighthouse is a successful financial advisory business with particular expertise in providing advice to members of its affinity group partners whose aggregate membership is in excess of six million individuals.

“In our announcement earlier today I gave details of the strategic agreement that we have entered into with Tavistock to develop further effective, risk-managed investment solutions for our customers utilising Tavistock's established in-house investment solutions within our Luceo Asset Management Range in October 2016.

“This investment will serve to further underpin what I believe will be a successful working relationship between Lighthouse and Tavistock.”

Brian Raven, Tavistock chief executive, said: “I am delighted to welcome Lighthouse as a shareholder and look forward to the development of a close working relationship between our two groups.”