Australian Unity membership votes mutual
After six months of deliberations, Australian Unity (AU) has decided to remain a mutual society.
The AU board took the decision to keep the mutual structure after 52 per cent of its membership said in a questionnaire that they wanted no change.
Only 30 per cent of members said they wanted to demutualise, while 18 per cent expressed no opinion either way.
More than 16,500 members responded to the questionnaire, which was sent out with an explanatory booklet.
AU group managing director Rohan Mead said 69 per cent of those who responded said they had read the entire report.
“It is extremely reassuring that such a high number of members took the time to read the report,” he said.
“I am encouraged by the degree of member involvement in the discussions and response to the report.”
In a letter sent to AU members, chairman Alan Castleman said the process had also been useful in providing members with more information about their company.
“The board considers that the issue is clear for the immediate future,” he said in the letter.
“Obviously, we will continue to keep members informed on the progress of AU as a mutual company and advise members should circumstances arise that suggest this issue should be re-visited.”
One argument that has been used before for demutualising by other mutuals was the ability to borrow capital for expansion.
Mead said keeping the company as a mutual would have no impact on the future direction of the organisation.
“There are many innovative ways to raise capital today, such as the way we securitised our retirement villages,” he said.
“We will continue to provide a mix of business strategies for the future.”
Remaining a mutual may also open doors to mergers and acquisitions of other mutuals, as the former friendly society movement is close knit.
“The current space where mutuals operate, especially in health funds, is fluid and we see there will be some opportunities there in the future,” Mead said.
He declined to name any funds AU was in discussion with at present.
AUTHOR
Recommended for you
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
With a growing number of advisers now running their own business, they need to pivot their career identity to being a business owner rather than just as a financial adviser if they want to futureproof their business.
Zenith Investment Partners has launched a range of new managed account portfolios over the past quarter, including on Insignia Financial’s Expand platform.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
