Plan B's Andrew Black finds himself being followed by IOOF
Plan B's Andrew Black could be forgiven for thinking he is being followed by IOOF in the wake of its acquisition of the dealer group. Black is The Top Five List’s one to watch for 2012.
1. Andrew Black
Plan B chief executive officer Andrew Black seems to be followed by IOOF everywhere he goes, particularly in the last few years.
Black used to be the managing director of investment platform Skandia until 2009, when the business was acquired by IOOF and he – along with a few other key executives – was made redundant.
After spending a couple of years outside of the financial services industry, Black landed a gig with Perth-based dealer group Plan B in 2011, becoming the group’s chief executive officer.
However, it was announced earlier this year that Plan B and its subsidiaries would be acquired by IOOF for $0.60 per share – an acquisition which would add an extra $2.2 billion in funds under administration to the institution.
Given that DKN’s key executives left the group once that dealer group was acquired by IOOF, and in view of Black’s past experience with the Skandia acquisition, it will be interesting to see who will stay at Plan B and who will go over the next 12 months.
2. AMP SMSF
In its half-yearly report in August this year, AMP signalled it would create new capabilities and repackage existing ones to appeal to the growing self-managed super fund (SMSF) market.
Little did the industry know that only a few months later the insto would open a separate business unit called AMP SMSF and appoint former ANZ-owned Super Concepts managing director Craig Jameson to head the division.
The unit was announced on the same day AMP announced the acquisition of the largest SMSF administrator in the country – Cavendish Group.
Cavendish and other AMP-owned firms such as Multiport and Super IQ (partially owned by AMP) would be put under one umbrella to provide administration services to SMSFs while offering AMP Financial Planning advice services.
The Commonwealth Bank’s acquisition of Count and AMP’s move represent two of the most aggressive pushes into the SMSF space so far.
Given that the two institutions had two completely different approaches to tapping into this market, the industry is yet to see whether these strategies will pay off in the long run.
3. ASIC
The Australian Securities and Investments Commission (ASIC) has long been criticised by the financial planning industry for lack of involvement and proactive efforts.
Some have even claimed the regulator had catered to the Labor Government by advocating some of the more controversial Future of Financial Advice (FOFA) reform proposals.
However, the industry had been singing a different song this year.
ASIC officials have become regular guests at industry conferences, while more key financial planning figures have been called to participate on different committees set up by the regulator.
At the Association of Financial Advisers (AFA) national conference this year, ASIC Commissioner Peter Kell communicated to the industry the regulator’s plan for the next year and what advisers could expect in 2013.
Key associations such as the Financial Planning Association and the AFA have praised ASIC this year for its increased efforts to understand and consult with the financial planning industry, licensees and practitioners.
It will be interesting to see if this love affair is built to last.
4. IFAs
Ever since FOFA was first mentioned more than three years ago, industry experts have predicted the mid-tier sector would suffer.
Sure enough, the increased compliance costs, additional administrative requirements and the banning of commissions definitely placed a strain on non-aligned and boutique licensees, with many finding safety under institutional umbrellas – notably Count and DKN – with Matrix Planning Services still seeking a buyer.
These acquisitions have seen only a handful of non bank-owned financial planning businesses remain in the 50 largest licensees.
The mid-tier financial planning space is under threat, with many experts arguing dealer groups will need to change or enhance their value proposition by way of specialising in particular areas or targeting specific client segments.
The next 12 months will prove to be crucial for the diminishing independent sector in financial planning.
5. The Big Four
Regulatory change in financial services has created another trend – the so-called distribution land grab.
Mergers and acquisitions have created a win-win situation for both dealer groups and the institutions which acquire them.
Practices receive institutional backing, compliance and technical teams at their disposal and an efficient back office, while banks receive an enhanced distribution channel.
However, not every acquisition goes without its hurdles, which was evident during the AMP/AXA merger during 2011 and the Count Financial’s transition to CBA this year.
MLC tried to poach as many AXA Financial Planning practices as it could during the transition, while BT Financial Group had its eye on Count’s planners, offering them so-called “sign-on fees” for joining.
Given the predicted increase in mergers and acquisitions in financial services over the next couple of years, the industry is set to witness similar turf wars.
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