Are Fortnum and Australian Unity a good pair?

On Monday, Fortnum and Nestworth Financial Strategists, a professional advisory firm owned by AZ NGA and a corporate-authorised representative of Fortnum, announced that they had partnered to acquire Australian Unity’s financial advice business and create an “ongoing tripartite alliance to make quality advice accessible to more Australians”.

Under the deal, Nestworth Financial Strategists will acquire Australian Unity’s employed advice business consisting of 18 employee financial advisers. It will also acquire the group’s corporate superannuation services business and become one of Australian Unity’s preferred advice providers.

Fortnum will also purchase Australian Unity’s financial advice AFSL holder, Australian Unity Personal Financial Services (PFS), and continue to provide licensing and business support to PFS’s 150 self-employed advisers.

Neil Younger, CEO of Fortnum Private Wealth, added that the deal would deliver immediate scale and increase the combined number of advisers across two AFS licences to around 400.

“Scale is increasingly important because it enables licensees to offer a broader range of solutions and better support underlying businesses, but we’re not interested in growth for the sake of it,” Mr Younger said.

“We only want to partner with high-quality people and businesses, and there is a lot of alignment between Fortnum and Australian Unity’s PFS business in terms of culture, values, and operating model.

“Fortnum is a collaborative community of passionate professionals, and we are excited to welcome Australian Unity’s PFS business. We believe that Fortnum and PFS have some of the best people in the industry, and in bringing it alongside Fortnum, we are creating a truly formidable team.”

Analysis from Wealth Data shows that some interesting similarities between PFS and Fortnum advisers could make the pairing a good fit.

“Fortnum run two AFSLs, Fortnum Private which currently has 213 advisers and Fortnum Advice which only has 10. Australian Unity has a total of 167 advisers,” said Wealth Data founder Colin Williams.

“We put Fortnum Private and Australian Unity (Aus Unity) side by side to compare some key data points, which are mostly created from the ASIC FAR. What is interesting, is that many of the numbers are very similar.”

Fortnum has a slim edge on the average years of experience of its advisers at 16.4 years versus 15.8 for Australian Unity, while a greater percentage of Australian Unity’s advisers have been in the profession since before 2012 (71.3 per cent v 68.5 per cent). They also have a similar gender split, with women making up 25 per cent of Fortnum advisers and 24 per cent for Australian Unity.

“The key areas of difference is the growth YTD, Fortnum up by two, Aus Unity are down by 12. Aus Unity have slightly more advisers who commenced Pre 2012, but Fortnum have a higher average years of experience,” Mr Williams said.

“The percentage of advisers with a degree of some description is also very close. What each licensee authorises their advisers for the main product sets are again similar.

“The data does not take into account other details such as revenues etc, but at least it does look like both businesses are a reasonable fit on the available data.”

Adviser movement this week

While Australian Unity’s authorised representatives have not yet moved across to Fortnum, the week ending 16 November was notable for the first double-digit increase since the end of September. There was a net growth of 18 advisers, helped along by nine new entrants.

There are now 15,700 advisers in the industry, up 140 for the financial year but down 99 for the calendar year.

Lifestyle Asset Management saw the largest growth this week, picking up three advisers from Dirigere Advisory, while United Super, Trustee for Auriga (Capella), Canaccord, and Australian Administration Services (Link) all added two advisers each.

Count Group, Fiducian, Castleguard (Lifespan), and a new licensee were among 27 licensee owners that were up one adviser each.

AMP Group and Insignia saw the largest losses, both dropping by three advisers, while Clime Group and FSSSP Financial Services (Aware Super) lost two advisers each.

Diverger, Fitzpatricks, Morgans, and WT Financial Group were among the 10 licensee owners that lost one adviser each.