Darren Steinhardt

Clime Investment Management has signed a $2 million exclusive, binding heads of agreement with Infocus to sell off its troubled licensee business Madison.

Announced to the ASX on Monday morning, Clime said the move would streamline operations to a focus on its $1.3 billion (in management and advice) funds management and private wealth business, while benefiting from cost efficiencies which will produce approximately $500,000 normalised operating profit improvement.

Sold along with platform WealthPortal, Infocus managing director Darren Steinhardt says a catalyst for the deal was the common licensee refrain of the need to gain scale to drive business efficiency.

“We are wanting to expand and if I look at the cultural fit that is there between the advisers that are within the Madison network and ourselves, it’s a good and strong fit,” Steinhardt tells Professional Planner.

“There’s a lot we can do with those advisers when welcome them into our network and make them feel at home.”

Clime CEO Annick Donat did not respond to request for comment by time of publication.

It’s the second attempt this financial year by Clime to offload the Madison advice business after signing a non-binding heads of agreement with Practice Development Group, which represents Godfrey Pembroke advisers, last year.

That deal would have created a co-operative ownership model between Madison and Godfrey Pembroke after the latter’s then-owner Insignia Financial announced the licensee would be sold back to its advisers. This was part of a broader plan announced by the institutional licensee owner to the market that it would divest most of its licensee businesses.

The potential deal with Madison and Godfrey Pembroke had a deadline of March 2024 and ultimately fell through because “it was apparent that both parties had stuff that they needed to deal with”, according to Godfrey Pembroke CEO Mark Fisher.

PDG and Godfrey Pembroke director Trevor Brandson tell Professional Planner that GPL was “more advanced in [our] thinking of what the future could look like” for an adviser-owned and adviser-led licensee than Clime.