Defence is the name of the game

YOU would think Barry Lambert has flown the flag of independence boldly and proudly enough over the past few years to well and truly bury any question he might consider selling Count Financial, particularly to one of the institutions.

So why did Lambert once again need to face up to questions about the group’s future ownership during the presentation of its half-year results last week?

The answer, strangely enough, had less to do with Count than it did with rival dealer group Professional Investment Services (PIS), which sold a 20 per cent stake to UK-based insurer Aviva last month.

Given the buying power of institutions, and their insatiable desire for distribution, Aviva taking only a minority stake in PIS might have seemed wholly unremarkable in the bigger scheme of things.

Except, of course, that Aviva’s move was about something more crucial than distribution; it was about defence.

In particular, a defence against the possibility that the $2 billion that PIS invests through Aviva’s Navigator platform might find its way into a rival’s platform.

Which brings us back to Count. The group invests almost $3.5 billion through platforms, and a good majority of that through BT’s wrap.

From there, it is not hard to see why Lambert will continue to have to fend off questions about the group’s ownership.

For the institutions themselves, you can see where a headache could be forming.

For the past few year, they watched as platform inflows burgeoned beyond all expectations, to the point where they are nothing less than the life blood of wealth management businesses.

Now, many of these groups must break out in the odd cold sweat at the thought that these flows could one day disappear, particularly if their platform relies heavily on funds from a single dealer that could be taken over by a rival.

Don’t get me wrong; the institutions would rather have the platform funds than not, but you would have to expect there would be the occasional sleepless night too.