Credit unions merge planning arms
WesternAustralian credit unions, State West and Health Credit, will merge their financial planning arms as part of a wider merger of the two groups.
The merged group will carry the State West name and have a total of eight financial planners operating out of 12 branches after the board and members of both credit unions agreed to the merger last week.
The merger will be effective from August 1, after getting the go-ahead by the major regulators, including the Australian Prudential Regulation Authority (APRA), as the two groups both hold an approved deposit taking institution (ADI) licence.
State West chief executive Greg Wall says the new planning group has also set itself an ambitious three year target to expand the number of planners, credit union branches and wealth management services on offer through the group.
He says the group hopes to leverage off its place as the second largest non-banking advice provider in the state and hopes to be a major force in wealth management at the end of the three years.
“We see a gap in the market between banks and small independent planners. We are also independent but have an institutional backing, so we can target a wider market and there is a demand for an alternative to banks in the area of wealth management,” Wall says.
Wall says State West will not seek business outside the state of Western Australia but will purely focus on the 65,000 existing members of the combined credit unions.
Health Credit financial planning manager John Kenworthy says the merger of the two credit unions was driven by issues of economies of scale, with both groups having a similar focus on the Western Australian market only.
After the merger, the group will have $560 million in assets across its membership and Wall says this will be a driver to recruit further staff in the planning side of the business.
He says at present the group is looking at financial planners who are struggling to comply with the new Financial Services Reform Act and has already been approached by a number of planners seeking to work with a non-bank institution.
Wall says the credit union would not badge any planners who approached to join the group but would most likely buy the practices of those planners, which is in keeping with the group’s growth plans.
AUTHOR
Jason Spits
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
