Consolidation continues to reshape financial services

1. Lonsec

Earlier this year, Zurich announced the sale of the research and ratings house, Lonsec.

Zurich had been entertaining bids from interested parties in the months leading up to the announcement, with the researcher finally going into the arms of Financial Research Holdings (FRH).

FRH, led by private equity specialist Mark Carnegie, also owns SuperRatings, which was referenced in the Industry Super Network's controversial ‘compare the pair’ advertising campaigns.

Not long after the acquisition of Lonsec was announced, the then chief executive officer Grant Kennaway departed the research house for its rival Morningstar, while Amanda Gillespie filled Kennaway’s role.

2. Count Financial

As an independent dealer group with more than 700 financial advisers and a huge client base - but more importantly as a group delivering positive profit results over the years – Count Financial was an institution’s dream purchase.

The dealer group was certainly a highly sought-after acquisition, with net-profit after tax growing to $51.6 million, up 113 per cent over the year to 30 June 2011.

Count was courted by the Commonwealth Bank for more than a decade before it finally caved in for a price of $373 million.

Count founder Barry Lambert alluded to the uncertainty surrounding the Future of Financial Advice (FOFA) reforms as an important element for the top-down consolidation. Count itself has been quite vocal in its opposition to opt-in requirements.

3. DKN Financial Group

Another independent dealer group which was lost to the institutional market is DKN Financial Group. Following the approval of IOOF’s proposal to acquire the group for $115 million, chief executive officer Phil Butterworth left DKN.

With substantial changes in senior management and a fairly challenging year ($13.95 million loss in net profit after tax), it will be interesting to see what 2012 will bring for the group.

4. ING Investment Management

Another significant acquisition was that of ING Investment Management. In July this year, ING Group agreed to sell its investment management business to UBS Global Asset Management (UBSGAM).

The takeover (for an undisclosed amount) was finalised in October, which led to the redundancies of 36 of the 120 ING IM staff.

The acquisition, however, saw the doubling of UBSGAM’s funds under management, and has placed the Swiss bank in the top 10 largest investment managers in Australia.

5. Shadforth Financial Group

The Australian dealer group market was further consolidated when Snowball Group and Shadforth Financial Group decided to become one.

Snowball intended the new group to become ‘Australia’s leading dedicated non-aligned financial advice and wealth management group’.

In addition to an executive reshuffle, the group signalled its intention to integrate the Shadforth and Outlook advice businesses into a single-focused operating model concentrating on high-net worth and mass affluent clients.

The merged entity, under the proposed name SFG Australia, reported a net profit after tax of $25.4 million in August.