Suncorp’s sale of its wealth business, Suncorp Portfolio Services, completes the Queensland financial institution’s exit from wealth which began in 2015 with the sale of Guardian Advice and Suncorp Financial Planning.

LGIA Super bought Suncorp Portfolio Services for a total consideration of $45 million including a 26.6 million fixed amount plus regulatory capital, Suncorp announced via the ASX on Wednesday.

Suncorp’s wealth business had $6.4 billion in funds under administration and 137,000 members at the end of December last year, according to public disclosures.

The deal was funded by the profit-for-member fund through general capital reserves, LGIA CEO Kate Farrar told Investment Magazine on Wednesday.

Following the completion of the sale Suncorp will enter into an agreement with LGIA to distribute Suncorp superannuation products to Suncorp customers for 18 months, according to the public announcement.

LGIA plans to mutualise the Suncorp super trustee and consolidate three trustees into one – following LGIA’s merger also this month with Energy Super – to enable the reserves to be returned to members following a successor fund transfer into LGIA, Farrar explained.

The sale of Suncorp’s remaining wealth business was the outcome of a strategic review which began last February, Suncorp Group’s CEO Steve Johnston told the ASX. This review considered a range of options including the potential impact on super members, the group’s employees and shareholders, he said.

Energy Super and Suncorp Portfolio Services were the two funds at the top of LGIA’s list of preferred merger partners, Farrar said on Wednesday.

“In 2019 we sat down and made a list of funds we believed would be the best merger partners based on geographic reach, size of member accounts among other factors and Energy and Suncorp [Portfolio Services] were number one and two on that list,” Farrar described.

“We wanted to be a sustainable boutique mid-sized fund. We want to be broad eventually, but we want to continue to deliver personalised boutique services to members with balance sizes larger than the industry average,” she said.

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