In June, CountPlus Financial announced it would acquire Count Financial from the Commonwealth Bank for $2.5 million pending shareholder approval. CBA had bought Count Financial in 2011 for $373 million.
CountPlus shareholders will vote on the acquisition of Count Financial in an extraordinary general meeting held in Sydney on 6 August, with a proposed completion date of 1 October.
Financial performance
According to an independent report from Lonergan Edwards put on the ASX, Count Financial incurred an operating loss of around $6.1 million (before tax) in FY18 under CBA ownership, with further operating losses expected in FY19.
The report noted that Count Financial’s member (firm) fees and adviser fees are currently well below those charged by its competitors, and the large majority of its revenue generated from trailing commissions and rebates that will be prohibited from 1 January 2021.
Count Financial’s historical financial results included significant overhead recharges from CBA, which the report noted will not be incurred under CountPlus ownership.
Over the last few years, the number of firms and advisers steadily declined. In 30 June 2017, there were 292 member firms and 587 advisers. By 30 April 2019, those figures declined to 160 member firms and 359 advisers.
As for revenue, member and adviser fees totalled approximately $3.7 million in the nine months to 31 March 2019, and income from trailing commissions and rebates was approximately $12 million.
With the ban of trailing commissions starting from 1 January 2021, the report noted that this will have a significant adverse impact on Count Financial’s profitability.
Indemnity for remediation costs
CBA confirmed in June it would offer $200 million of indemnity to cover remediation of past product as part of the deal.
The report said the cap is expected to be sufficient to ensure that CountPlus doesn’t incur any liability for remediation liabilities arising from misconduct, which occurred prior to the completion date of the acquisition.
While it noted the possibility of actual costs relating to known remediation issues could exceed the $200 million indemnity cap, the Lonergan Edwards report said this is unlikely because the current indemnity cap is around 38.9 per cent above CBA’s provision for expected customer refunds as at 31 March 2019.
Further, it said CountPlus management expects CBA will act in good faith and agree to any appropriate increase in the cap, and that Count Financial is a separate legal entity and will be able to quarantine losses within Count Financial to minimise any impact on the value of CountPlus in the event CBA’s remediation liabilities significantly exceed the $200 million cap.
Count plus going well today ?… Got offered a job at their colleagues, Total Financial solutions dealer group as a Fp, but took them nearly 5 months to onboard me .!!! seriously who waits that long ? “Oh we are really close to Kaplan and they do onboarding , off boarding ?? , New education units , every thing !!” go figure . Seriously guys ,do it yourself and forget the blood sucking American Kaplan ‘s of the world . End result , I got sick of their compliance people who really didn’t know what they were doing post RC . Stay clear any newbies unless you want to be Kaplanized !!!!!!!!!
Looks like a winner – a highlight from the EGM notice:
“The significant increase in average revenue per firm (from $26,000 in FY20 to approximately $82,000 thereafter) reflects the need for industry participants to recover the costs of providing licensing and other services to advisers (which have previously been subsidised by Legacy Revenue streams).”
Good luck charging firms 3x what they currently pay!
Count were caught red handed not properly sharing revenues when they were forced to lodge notices with the ASX after that their credibility was blown they have been stealing from their franchisees for years Lambert crew are shonks Accounts are complete fools this is why they have abandoned these ridiculous chaletans
Have a cry. It is what it is.
[quote=Agent 86]………And the winner is….Barry Lambert !!![/quote][quote=Agent 86]………And the winner is….Barry Lambert !!![/quote]
Barry is the only accountant I know with any money. the other is mark bouris, but again he made his money by becoming a mortgage broker.
the greatest barometer of how successful one will be in corporate life is directly related to how incompetent they are. the more incompetent one is, the more successful they will be.
most competent ethical people wouldn’t last more than 18 months
………And the winner is….Barry Lambert !!!
Karma always has a way of righting things up. I remember one experience of one of these players that was most disconcerting in the lack of understanding of what they were trying to do.
..and let’s not forget the Game Show Host – David Lane!
2019 nominee for the Grant Denyer Award for credibility and judgement in a Financial Services business. Long gone by now aren’t you David
[quote=anonymous2]one is still there – Marianne Perkovich now heads Private bank [/quote][quote=anonymous2]one is still there – Marianne Perkovich now heads Private bank [/quote] she should be in their mail room. Probably stuff that up to. Shows you despite how much virtue signalling the banks do, they don’t really value ethics in their own ranks, or competency for that matter.
all thick as thieves seriously…David Lane and Marianne Perkovic all advised on the purchase also their awful software a year earlier. Crooks the lot of them..No accountability, the bank just shuffles them to another highly paid possie, or their old mates who moved to another bank throw them another cushy gig. If this is seriously the best execs Australia had no wonder Fin Serv is going down the gurgler..
one is still there – Marianne Perkovich now heads Private bank
Bye bye Bank “Wealth” Employees. You can’t run a business and you have no advice experience or qualifications. The Dealer Group was just a loss making entity which you gouged with big salaries and bonuses for years. Don’t come back. Not welcome in the Industry. When I see a (loss making) Bank ADG on a CV it means you are not getting a job.
[quote=Stu]The CBA management that signed off on purchasing Count in the first place have hopefully been moved on. That is a staggering erosion of shareholder value.[/quote][quote=Stu]
Wasn’t the CBA person who did the due diligence and recommended this DAVID LANE, who then became Count’s CEO then left (why did he leave?)? He’s at Perpetual now. How is Perpetual going?
Did Marianne Perkovic recommend this also?
And Michael Spurr (CountPlus’s amazing initial CEO) is now back as acting CEO of Count.
Interesting times
Reach for popcorn
The CBA management that signed off on purchasing Count in the first place have hopefully been moved on. That is a staggering erosion of shareholder value.