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Steinhardt strikes a bargain with $2m Madison acquisition

Mike Taylor28 May 2024
Hard bargaining


Assuming the sale of Madison Financial Group to Darren Steinhardt’s Infocus Wealth Management closes on schedule on 30 June, then the financial planning group will have been owned by Clime Investment Management for just on four years.

The headline purchase price of $2 million says much about Steinhardt’s approach to the transaction given that the amount will be paid in the form of convertible loan notes issued by Infocus.

It also says a great deal about the reality that while many individual financial planning businesses have rarely been busier or more profitable, owning a licensee is an expensive business which requires significant scale.

And it is worth remembering that Clime only picked up the Madison financial business after it had been acquired by the former OneVue which, in turn, acquired it from fintech, Sargon, after that company had been placed into receivership.

And it was not as though Clime had not sought to achieve the scale necessary for success given that, less than a year ago, the company outlined an arrangement which would have seen the Godfrey Pembroke Practice Development Group move into an alliance relationship with Madison to “build a peer-led community”.

At the time it was suggested that, once formed, the alliance would “consolidate the respective service offerings of each group into a single entity that will provide licensee services to their respect adviser networks”.

Sadly for Clime Investment Management and its chief executive, Annick Donat, the alliance never eventuated with Godfrey Pembroke’s advisers opting to go their own way.

Given what Infocus has paid for Madison and what it will bring to the Queensland-based business in terms of adviser numbers and funds under advice, Steinhardt has plenty of reason to feel pleased with the outcome.

For Clime, its announcement to the Australian Securities Exchange (ASX) said it all but noting that the transaction would “position the company for profit improvement in FY25”.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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