Improving scale and business efficiency in the post-Hayne royal commission world is the catalyst for the Akambo Financial Group and First Financial merger, with further expansion a possibility.
The wealth management firms will combine 110 staff and 3,000 clients across Australia covering $3 billion in funds under management with services that cover self-managed superannuation funds, not for profits, high net wealth individuals, and pre- and post retirees.
The two brands will remain client facing with both having access to back-office specialists covering investments, legal support, client services, SMSF administration and paraplanning support.
Akambo managing director Anthony Kapetanovic tells Professional Planner the royal commission was the fundamental motivator driving the merger.
“There are so many issues we need to deal with around the industry. Expenses and costs have gone up and the only way we can solve this is and make sure we’re focusing on the client experience is to get scale.”
Demand for advice groups is the highest it’s been in decades as businesses aim to scale up, but supply hasn’t maintained the same pace.
It is a “no brainer”, Kapetanovic says, for the two businesses of similar size to come together.
“Both businesses are successful in their own right so there is a lot of scope to go down the path and get further scale.”
It has been expected that businesses will need to merge to gain the benefits of scale, particularly when it comes to the fight for attracting talent.
“That’s the objective of the group, to get more scale and try to make it a destination for talent,” Kapetanovic says. “Both balance sheets are unencumbered so it’s my role to go out and source other parties that are like-minded.”
While ubiquitous M&A players AZ NGA and Countplus have seen dozens of bolt-on acquisitions in the last few years, Kapetanovic says this was not the direction either firm was interested pursuing.
“Our view is to merge or acquire another business not dissimilar in size to Akambo. Going down the path of taking stakes in lots of small business is not something we’ll pursue.”
Kapetanovic described the merger process as “unbelievable”, despite feeling trepidation during the process.
“The last six months of dealing with principals there has been great. I’d do 100 mergers if they were all like this.”
