M&A actions propel licensees’ share price in Q1

financial-advice/licensees/AFSL/

1 April 2025
| By Laura Dew |
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Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions having a positive effect. 

During the year, the top-performing licensees were WT Financial, up by 100 per cent, and Insignia Financial which was up by 70 per cent. 

Both of these benefitted from M&A actions with Insignia receiving multiple bids by private equity companies to acquire the company which caused shares to rise by 19 per cent during the final quarter. 

Three parties – Bain Capital, CC Capital and Brookfield – all made bids of $4.60 per share and entered a period of due diligence. Bain and CC Capital then subsequently revised their bids higher to $5 per share and entered exclusivity agreements with Insignia for extended due diligence.

In the case of WT Financial, the firm announced a last-minute M&A deal to the market on 31 March that it had entered a 50:50 joint venture with the Australian subsidiary of US financial advice investor Merchant Wealth Partners. 

This had been flagged by managing director Keith Cullen in its first-half results when he stated he was seeking to help WT’s practices with scaling up

“We are seeing increasing demand from practices in our network and external to the network for support and advice on M&A activity, including help to access debt and equity markets, and for support with their legal and due diligence. We are very well-positioned to play a key role here with considerable experience and to respond to that demand from our practices, which also presents new revenue and profit opportunities for the business,” he said.

“If we can help them become bigger, better and stronger, then we become bigger, better, stronger and more profitable for our shareholders.”

Share price growth over one year to 31 March:

Licensee

Share price growth over one year to 31 March

WT Financial

100%

Insignia

70%

Count

32%

Fiducian

25%

AMP

7.3%

Centrepoint Alliance

-3%

Sequoia

-28%


Moving down the rankings, Count returned 32 per cent while Fiducian returned 25 per cent. 

AMP, which had led share price growth during 2024 thanks to the formal divestment of its advice division to Entireti, saw share price performance fall to 7.3 per cent over one year after a 22 per cent fall during the last quarter. Most of these losses occurred on 13 February when shares fell by 14 per cent ahead of the firm’s FY24 financial results.

These showed the firm had seen a 43 per cent reduction in statutory net profit after tax (NPAT) which moved from $265 million to $150 million. The lower figure for FY24 reflected business simplification costs and the sale of its advice division in December 2024 as the company transformed itself.

Looking at the two licensees which reported losses, Centrepoint Alliance was down by 3 per cent and shares in Sequoia were down by 28 per cent. 

Sequoia had a difficult 2024 amid a shareholder rout but has since taken steps to rectify this with the appointment of former IOOF head Chris Kelaher as a consultant, streamlining of its divisional structure from four to two, and an agreement that chief executive Garry Crole will step back by FY27. 

Its statutory net profit after tax (NPAT) from continuing operations enjoyed a notable rise of 137 per cent to $3.6 million from $1.5 million in the first half of FY24. However, statutory NPAT inclusive of discontinued operations, such as Morrison Securities, was down by 87.1 per cent from $27.9 million to $3.6 million.
 

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