Mergers and acquisitions: unexpectedly branded
In the space of just 18 months, the Australian financial services industry has been subjected to one of its most significant periods of consolidation, yet the Australian Competition and Consumer Commission (ACCC) has remained impassive.
Westpac has taken St George, IOOF and Australian Wealth Management have merged and then taken Skandia, NAB/MLC has taken Aviva Australia and, now, AMP has emerged with a bid for AXA Asia Pacific.
While some might argue this activity has not significantly altered the competitive dynamic of the nation’s financial services industry, it has certainly reduced the diversity of the underlying options available to financial planners.
Moreover, it is arguable that the mergers and acquisitions have reduced the sourcing of the products they might ultimately recommend to clients.
What needs to be closely examined by the ACCC is not so much the overarching ownership of particular companies, but how this filters down into the operations of their various market segments, subsidiaries and sub-brands.
A combined AMP/AXA Asia Pacific will represent a substantial force in the Australian financial services industry, particularly where wealth management and insurance is concerned. Indeed, such a combined entity might arguably act as a counterbalance to the likes of Westpac/St George and NAB/MLC/Aviva.
But what these mergers and acquisitions have also served to do is change the commercial and philosophical ecosystems of individual financial planners. People who consciously sought to avoid working under a major bank brand have found themselves doing so. Clearly there are planners working within the AXA framework who will be uncomfortable working under the AMP umbrella.
Is this a bad thing? Will it simply give rise to more independents and more boutiques?
These are questions that can and should be examined by the ACCC.
After examining the situation it may determine that it is not justified in acting. However, it owes it to the broader industry and consumers to ensure that the right questions are actually asked.
— Mike Taylor
Recommended for you
In this week’s special edition of Relative Return Insider, we bring you outgoing Financial Services Minister Stephen Jones’ keynote from Momentum Media’s Election 2025 event, followed by a Q&A focused on the Delivering Better Financial Outcomes reforms.
In this week’s episode of Relative Return Unplugged, Dr Vladimir Tyazhelnikov from the University of Sydney’s School of Economics joins the show to break down the shifting sands of global trade dynamics and attempt to understand the way US President Donald Trump is employing tariffs.
In this week’s special episode of Relative Return Unplugged, we present shadow treasurer Angus Taylor’s address at Momentum Media’s Election 2025 event, followed by a Q&A covering the Coalition’s plans for the financial services sector.
In this week’s episode of Relative Return Unplugged, AMP chief economist Shane Oliver joins the show to unravel the web of tariffs that US President Donald Trump launched on trading partners and take a look at the way global economies are likely to be impacted.