Madison and PDG launch strategic partnership

Investment management firm Clime said it has signed an exclusive, non-binding heads of agreement with Madison and PDG, with the alliance to consolidate the service offerings of each group into a single entity that will provide AFSL services to their adviser networks.

Annick Donat, chief executive of Clime, said: “The agreement between Madison and PDG represents a significant opportunity for our advisers to build a peer-led community. Both groups have a long history in advice and this arrangement will ensure they continue to prosper. Our respective advisers will benefit from increased scale and cost reduction.

“Combined, the group have approximately $8 billion in FUA through 130 advisers and the proposed structure will allow all practices to benefit from buying power synergies that will lower their costs of doing business and improve their advice offerings.”

The alliance will also see the creation of a new entity, Service Co, which will source licensee services from the combined groups and “identify additional third-party services that will be both cost effective and best of breed”.

Service Co will be majority owned by advisers and the services will be provided to the practices.

Clime added that the groups will benefit from the increased scale of Service Co and the buying power that comes as a result. It has also agreed to provide “in kind” commercial services over an initial two-year period for a 10 per cent equity position in Service Co, which is valued at around $0.4 million.

Additionally, Optimise Advice Services, which is currently wholly owned by Clime, will see its ownership split 50-50 between Service Co and Clime and will provide advice-related services to the self-licensed adviser community.

“The arrangement will also allow simplification of Clime Group’s business model and will provide enhanced opportunities to offer investment solutions, for example managed accounts and SMAs, to a broader advisory market,” Ms Donat said.

“Advisers will also benefit from Clime’s commitment to education and marketing that is designed to encourage the community to seek qualified financial advice.

“Madison FG and PDG share a similar operating ethos and cultural alignment in relation to the advice profession. The Clime Group look forward to working closely with the team at PDG and strongly believe that advisers from outside our groups will be attracted to this service offering.”

Under the heads of agreement, the parties will work together on an exclusive basis over the next seven months (to 30 March 2024) to finalise the arrangement. However, the implementation of the structure is expected to be completed well within this period.