Is the planned sale of Barry Lambert’s business to a major institution a sign of things to come for the independent planning sector? Simon Hoyle reports.
Barry Lambert admitted to being quite emotional as he drove into the Sydney CBD on August 30 to address a briefing on the proposed sale of Count Financial Group to the Commonwealth Bank of Australia.
It was the end of an era as Lambert, chairman and founder of Count, announced that the business he had built up over a period of 30 years was to be sold for a bit more than $370 million.
As if any more evidence were needed, Count’s absorption into the institutional fold confirms that a restructuring of the financial planning industry is well underway.
It’s not only the Future of Financial Advice (FoFA) reforms driving change, although they may be viewed as a catalyst – a line dividing financial planning into pre-FoFA and post-FoFA eras, in much the same way that superannuation was once characterised as being divided into pre-’83 and post-’83 periods.
Restructuring has long been necessary in an industry set on achieving professional status. The question arising from the current consolidation, however, is whether restructuring necessarily means far greater institutional ownership of the financial planning community in the long term, or whether we’re seeing what amounts to a clean-out of the “old guard”, opening the way for a generation of newer, professional, client-focused businesses to emerge.
There is a range of factors at work in reshaping the industry. Some of these might be characterised as “push” factors – those driving financial planning businesses to merge or be acquired; some might be characterised as “pull” factors – those that drive institutions (and other organisations) to acquire planning firms.
Whatever the true drivers of this round of consolidation, few expected Count, of all firms, to be acquired. It was considered big enough, robust enough and independent enough to vertically integrate successfully, and become a beneficiary of the changes. If Count sees institutional ownership as its best option, it speaks volumes about the future for other players in the middle ground.
Lambert acknowledged the misapprehension over Count’s ability to withstand the winds of change. Count, he said, had considered becoming an acquirer itself, but was “not in a position to act without more certainty about the legislation”.
“In some ways it’s a sad day,” Lambert said. “In fact, I choked up a bit, driving across the bridge this morning, knowing this was going to happen.”
Lambert says Count has “always championed accountants, and I should point out that all our franchisees own their own businesses, so we’re only a service provider”.
“Nothing changes at the franchisee level, except the question is whether they’ve got more confidence in us, in terms of our ability to continue to support them and help them prosper than by us remaining a relatively small company, you might say, compared to what’s happening in the marketplace,” he says.
(Cont’d)
To read the full story, get the October edition of Professional Planner magazine.
The possibility of increasing professional independent advice is fading away, and this is an example of the net aggregation of product and advice, the opposite outcome to the reasons made for FOFA by the Industry Super Network. Many professional accountants have now become unprofessional product representatives of Commonwealth Bank.