In a surprising move in the post-Hayne financial services environment, an advice practice and an asset manager will merge.
Ironbark Asset Management, a licensed responsible entity for managed funds, will merge with Invest Blue.
Upon completion of the merger, which is expected to be at the end of the month, the entity will have approximately $64 billion in funds under management, trusteeship and advice.
It will have more than 500 employees, and offices in more than 35 locations around Australia, but both businesses will continue to operate under their existing brands and management structures.
In separate statements to Professional Planner, both firms maintained they would remain independent.
Invest Blue managing director David Stephen said there will be no changes to the advice firm’s financial advice process.
“Invest Blue has systems and processes in place to manage potential conflicts of interest,” Stephen said.
“Ironbark also has a proven record of putting the client at its core and assisting advisers in their fiduciary obligations to clients, via its trustee and responsible entity services.”
Ironbark CEO Chris Larsen said Ironbark is not a product manufacturer or platform operator and does not package or distribute multi-manager products.
“We act a professional trustee for funds and managed account solutions, and partner with investment managers via our investment solutions business,” Larsen said.
“[Invest Blue] is a strong, profitable business in its own right and we have no plans to change how David and his leadership team run the business.”
Stephen said Ironbark has been a strategic investor in Invest Blue for around five years, so the merger is a natural progression of the partnership.
“There is a lot of alignment between both businesses in terms of values, culture and goals,” Stephen said.
“We both share a client-first philosophy and a common belief that high-quality, trusted financial advice can make an enormous difference in the lives of Australians. This merger increases our ability to enhance our value proposition to our clients, people and shareholders, as we strive to become Australia’s trusted home of great advice.”
Stephen said all Invest Blue advice must meet Best Interest Duty obligations to clients and must conform to the industry code of ethics.
“Invest blue will continue to operate under its existing brand and management structure,” he said.
“There will be no changes to our financial advice process. Invest Blue independently maintains its own, open architecture APSL [approved products and services list].”
In terms of portfolio construction and investment management, Invest Blue outsources its investment management to Russell Investments, via its outsource CIO function.
Russell Investments manages Invest Blue’s separately managed accounts portfolios and provides the role of asset consultant and model manager for in-house model portfolios.
“This function outsources all elements of portfolio construction and manager selection to Russell Investments,” Stephen said.
Invest Blue has no influence over the selection of managers within the SMAs created by Russell, and will continue to maintain its policy of outsourcing portfolio construction, asset allocation and manager selection.
“Ironbark has no ability to influence what the asset consultants put on their APSLs and in the portfolios,” Stephen said.
“Additionally, Ironbark is not a product manufacturer or platform operator. It does not have multi-manager products.”