AFS secures a piece of TSG
Peter Daly
Financial planning dealer group Australian Financial Services (AFS) Group has signed a heads of agreement to acquire a strategic stake in The Salisbury Group (TSG) for an undisclosed amount.
TSG consists of 30 financial planning practices, and together the two groups will have funds under management (FUM) of $6 billion.
AFS chief executive Peter Daly said TSG was a natural fit, representing practices and individuals that valued their institutional independence and were seeking an adviser-driven focus.
“[The benefits] of working with each other is that together we represent FUM of $6 billion, so that gives us the opportunity to negotiate slightly improved terms with the various fund managers . . . and also marginally reduce some costs.
“But the real benefit is the future, because what I see in Salisbury is very much a like-minded group, and their practices appreciate institutional independence, and that is something we are also looking for.”
Both AFS and TSG will continue to operate separately under their own brands from their respective Melbourne and Sydney office locations, and will maintain their current management and staff.
“While the two dealer groups are very similar, they are also different, and I think it is important to maintain cultures. The AFS culture is exceptionally strong and I don’t want to disturb our culture and, equally, I don’t want to disturb their’s,” Daly said.
However, he added both groups would benefit from the collective buying power and economies of scale derived from merging several back-office functions.
“We will assume responsibility for compliance because we have an internal team, whereas Salisbury used to outsource their compliance,” he said.
The announcement follows AFS’ buyback of Zurich Australia’s 39.7 per cent shareholding in the dealer group last year.
“Institutional independence was critical to the future direction and expansion planned for AFS,” Daly said.
“The buy-back provided the catalyst for a company restructure, allowing AFS to potentially offer dealer-to-dealer services and consider alliances or acquisitions of like-minded organisations.”
The AFS/TSG transition will be effective from July 1, this year.
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