Challenger sells Synergy to ING

A cultural mismatch has prompted Challenger Financial Services to sell-off its lower cost, lower service dealer group Synergy Advisory Services to ING, according to Genesys Wealth Advisers managing director Ray Miles.

Miles confirmed last night that Challenger, which owns Genesys, sold Synergy with its 57 planners to ING-owned dealer group Millennium 3 over two weeks ago.

Miles would not disclose how much ING paid Challenger for Synergy.

He said by selling Synergy, the Kerry Packer-backed Challenger would now be able to focus on Genesys, formed earlier this year when Challenger bought Associated Planners and merged it with its Garrison’s business.

“Synergy is a better fit for Millennium 3 than it was for Genesys,” Miles said.

“Our focus is on Genesys and we weren’t adding any value to Synergy,” he added.

Millennium 3 currently has 380 financial planners, most of whom have a risk advice focus.

If all 57 Synergy planners are comfortable with the terms of the sale, Millennium 3 will have close to 440 financial planners and will receive an extra $700 million in funds under management.

The boost in numbers will make Millennium 3 Australia’s eighth largest dealer group.

“This acquisition supports our desire to grow by increasing our aligned adviser numbers, as well as providing operational and cost synergies to Millennium 3, which is now a leading player in its market segment,” said ING executive director of advice Colin Morgan in a statement released today.

Advisers from Synergy contacted by Money Management said they were prevented by ING management from talking about what they thought of the deal.

When the merger between Garrisons and Associated Planners was flagged in April, current Genesys deputy managing director Andrew Creaser said joining Synergy would be an option for Garrisons planners who were unable to pay the $55,000 annual dealer group fee required to join Genesys.

He said less than 10 Garrisons advisers had chosen not to join Genesys.