Renato Mota

Insignia Financial CEO Renato Mota says he still maintains full ownership of Godfrey Pembroke and that the advisers that operate under its licence are not yet free to pursue other suitors.

Mota says Insignia still intends to sell the Godfrey Pembroke business it picked up in the acquisition of NAB’s MLC back to its 50 aligned advisers, while retaining a minority stake. That course of action was announced last month as part of a major shake-up of the wealth giant’s licensees.

“We don’t have any update on what we said last time, but from our perspective it’s pretty crystal clear,” Mota tells Professional Planner.

But the future of Godfrey Pembroke advisers has been the source of confusion and speculation in the market, after Clime Investment Management announced last week to the ASX a non-binding deal with Practice Development Group, which represents Godfrey Pembroke advisers, to merge with Madison and create a new company called Service Co that Clime would hold a minority stake in.

Analysis by Professional Planner showed Clime was making a de-factor claim on Godfrey Pembroke’s intellectual property, since it claimed the new entity would have around 130 advisers and $8 billion funds under advice. Sources close to the PDG camp suggested that entity was in control of the Godfrey Pembroke licence and client relationships, making them free to pursue a deal with Clime.

But Mota says Insignia maintains its 100 per cent ownership of Godfrey Pembroke and its assets until otherwise notified and there is currently no change to relationship.

The agreement between Clime and PDG has a stated deadline of 30 March 2024 and Insignia has expressed no issue with any deal post-divestment.

Closure of the Lonsdale licensee is almost complete while Millennium3 is still being shopped around the market.

“Cultural fit is always a priority with these businesses, and we know that they are relationship-oriented – there’s an aspect of trust which goes to culture so that is certainly a factor,” Mota says.

“We’re working through the process, but cultural fit would be one of the featuring attributes we would consider. It’s important to use that those advisers that whatever licensee they end up with, that is something that can support their business and continue to help them prosper.”

Moving on

Along with the Godfrey Pembroke announcement last month was the planned divestment from its main licensee business and the creation of Advice Services Co, which will comprise RI Advice Group, Consultum Financial Advisers and the amalgamation of MLC Wealth licensees known as TenFifty.

Insignia conducted a preliminary survey via CoreData Research in August which found out of 170 respondents that a “majority” agree the ASC will enable greater input into group strategy and decision making and that most advisers view the partnership model as having a long-term positive impact.

Only 2 per cent indicated they were unlikely to continue their partnership with the group over the next 12 months.