Challenger denies it overpaid for APFS

ChallengerFinancial Service Group has hit back at industry suggestions it is paying over the odds for adviser firm AssociatedPlanners Financial Services (APFS).

Challenger deputy executive director wealth management Rob Adams says the rationale for buying APFS is to build a “household name” financial advice group.

“We think there is a real opportunity to build a trusted advice brand, to enter the space and own the planning brand in Australia,” Adams says.

Adams says the most asked question in the industry at the moment is why Challenger is prepared to pay such a high price for APFS — expected to be around $97 million.

An independent report by APFS-appointed PKF Corporate Advisers had priced the dealer group at between $76 million and $84 million and thereby concluded the Challenger offer of close to $100 million to be fair and reasonable.

However, Adams says that by employing technology to create an integrated advice and wealth management business, the group is also anticipating strong efficiency gains from merging it with Challenger-owned dealer firm, Garrisons.

“It shows what we think of the size of the opportunity and we’re happy to be judged on it in two or three years when we start to see the profitability of the dealer, which we will,” Adams says.