Will Aust Unity’s self-employed advisers stick or drift?

ANALYSIS

One of the biggest challenges for the authors of the deal which has seen Fortnum and AZ-NGA’s Nestworth take the Australian Unity financial planning businesses will be retaining the 150 self-employed advisers.

A number of those advisers signalled to Financial Newswire shortly after the announcement of the details of the transaction that they were not particularly attracted to the changed arrangements, particularly in circumstances where there had been no discussion of retention incentives.

Notwithstanding a level of disgruntlement on the part of some Australian Unity aligned advice businesses, the transaction announced to the market yesterday represents one of the most significant to occur in 2024 and a reflection of the muscle now being wielded by AZ-NGA chief executive, Paul Barratt.

It had been known for some time that the Australian Unity financial planning business had been struggling to maintain an adequate return on investment meaning an approach of the nature of that on the part of Fortnum, AZ-NGA and Nestwealth welcome.

And the way the “alliance’ between Fortnum, AZ-NGA and Nestwealth is structured speaks volumes for the financial muscle which AZ-NGA brings to the party.

AZ-NGA has had a close association with Fortnum whilst owning Nestworth Financial Strategies while Nestworth is a corporate authorised representative of Fortnum.

Thus, Nestworth will acquire Australian Unity’s employed advice business made up of 18 advisers along with Australian Unity’s corporate superannuation services business whilst becoming one Australian Unity’s preferred advice providers.

At the same time, Fortnum will acquire the Australian Unity Personal Financial Services license under which 150 self-employed advisers are operating.

According to Fortnum chief executive, Neil Younger the deal will deliver immediate scale and synergy benefits, increasing the combined number of advisers across two AFS licences to around 400.

The transaction is interesting because it coincides with the current Count Limited acquisition of Diverger and the expressed intention of Centrepoint Alliance to seek to gain scale both organically and by acquisition.

For financial advisers, perhaps the most interesting element to the transaction is how broad the influence of AZ-NGA has become and without even needing to directly own an Australian Financial Services License.