Aust Unity advice seizes Grand prospect
Australian Unity will accelerate its campaign to build its financial planning business in New South Wales after announcing merger plans with Grand United Friendly Society.
The deal is being pitched as a move to allow Australian Unity to tap into the lucrative retirement living and healthcare client base of Grand United — one of Australia’s oldest companies.
Grand United does not have any pre-existing ties with any financial planning dealership, making it an attractive proposition for the largely Victorian based Australian Unity, which has in recent months declared its intent to push north of the border into the lucrative New South Wales market.
But Australian Unity chairman Alan Castleman has quashed any rumours of the merged group becoming a listed company.
“The question of mutuality is often raised, and we made a decision a long time ago to stay that way,” Castleman said.
The two groups, which announced the merger last week, have been in talks since March. The merged entity will operate under the Australian Unity banner.
The current group managing director of Australian Unity, Rohan Mead, will assume the position of chief executive of the merged entity.
At present there is only one retail financial planner working under Australian Unity in New South Wales, but Mead said this will change post-merger.
“It’s certainly an area we will be looking to grow,” he said.
The merger, which is subject to member and regulatory approval, will see a mutual company emerge with $500 million in revenues and 200,000 members nationwide.
For Grand United managing director Warren Stretton, the merger will signal his retirement.
Stretton has been in the job since 1992, and had indicated his intent to retire prior to talks commencing with Australian Unity.
Stretton said the merger will boost the career path for Grand United staff who may want to diversify their skills from purely health and retirement living administration.
“It gives Grand United staff an increased opportunity, whereas under the old structure they could only go so far in the organisation,” Stretton said.
The merged entity will include a 180,000 member health insurance business, as well as a retirement living operation in both Victoria and New South Wales.
“This merger is about the growth opportunities, there will be some staff adjustments over the longer term, but I anticipate an additional management structure will be needed,” Mead said.
The merged financial services businesses will comprise some $2.3 billion in funds under management.
Grand United chairman Warren French said the merged group would achieve the expansion goals of both organisations.
“The merger will especially strengthen the health insurance and retirement living services offered. It will allow members and customers from both groups to access a broad range of services from a wide set of businesses,” French said.
If approved, the merger is expected to be completed by early next year.
Recommended for you
Professional services group AZ NGA has made its first acquisition since announcing a $240 million strategic partnership with US manager Oaktree Capital Management in September.
As Insignia Financial looks to bolster its two financial advice businesses, Shadforth and Bridges, CEO Scott Hartley describes to Money Management how the firm will achieve these strategic growth plans.
Centrepoint Alliance says it is “just getting started” as it looks to drive growth via expanding all three streams of advisers within the business.
AFCA’s latest statistics have shed light on which of the major licensees recorded the most consumer complaints in the last financial year.
