MyState's Craig Mowll (left) and Fiducian Group's Jai Singh

Fiducian Group’s $3.5 million purchase of MyState’s retail financial planning arm today comes amid a spate of similar acquisitions across the industry, with the willingness of mostly institutional providers to offload their advice businesses being matched by the appetite of opportunistic buyers.

The MyState purchase will see Fiducian, which currently licenses around 77 advisers across more than 50 practices, add another eight or so advisers from Devonport, Launceston and Hobart – as well as $340 million of funds under advice – to its network.

The deal comes in the middle of a congested ownership transfer period for advice businesses.

Last week saw the acquisition of Queensland-based Licensee Myplanner Professional Services and its managed discretionary account service, My Managed Portfolio, for $4.38 million by diversified US-based education and technology group, Anvia Holdings. MyPlanner was the 28th largest licensee in the country with 101 authorised representatives.

A day later, CountPlus purchased CBA-owned licensee Count Financial and its 359-strong adviser network for meagre $2.5 million.

Meanwhile, 300 advisers from Westpac licensees Securitor and Magnitude are swelling the numbers of Viridian Advisory, which entered into a sale agreement with the bank in March. An assortment of opportunistic licensees including Fortnum, Paragem, Madison, Total Financial Solutions Australia, Affinia and Centrepoint are reportedly picking up the Securitor and Magnitude advisers not joining Viridian.

Days after Westpac’s exit from wealth management was announced, Bendigo and Adelaide Bank sold its advice arm to IOOF for $3 million. IOOF itself became the second largest licensee in the country (behind AMP) a few months ago with the transition of 670 ANZ advisers to its network.

The Hayne royal commission, combined with new education standards, a likely end to grandfathered commissions and a sharper focus from the regulators are the main drivers behind the retreat from advice.

A lack of profitability was also flagged by Westpac, which stated at the time of the Viridian deal that they were “unlocking value by exiting a high-cost, loss making business.”

Keep the faith

According to Fiducian Group head of distributions and development, Jai Singh, a two-way referral agreement will also be in place that will give MyState’s banking and home lending clients access to Fiducian’s financial planning services and vice versa. “We’re really excited to work with MyState,” Singh said. “We respect them for what they do and, I presume, they respect us for what we offer.”

MyState bank’s general manager of wealth management, Craig Mowll, took a similar line to the larger banks when he explained to Professional Planner that the sale was a strategic move which allows them to simplify the business and invest in areas where it has a growth advantage. MyState will focus on its fund management business and trustee businesses, he said, which are both scalable and can be built out through digital platforms.

“The retail advice is a high-quality business,” Mowll continued. “It’s just one that we think – in a post-royal commission environment – will require a high amount of investment. We’re not a financial planning specialist; they’re a better acquirer than we are because they can invest more in the business and that’s best for the clients.”

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning.
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