In a statement to the market on Wednesday, Centrepoint Alliance said it would purchase the advice business of Clearview Wealth for $15.2 million, including the Clearview and Matrix dealer groups.
The purchase will be financed by the issue of $12 million in escrowed Centrepoint shares and a cash consideration of $3.2 million, with ClearView to become a 25% shareholder in Centrepoint.
“This transaction represents the next phase of Centrepoint Alliance’s growth by providing immediate scale and will increase the business’s long-term value and profitability,’ said Centrepoint CEO John Shuttleworth.
The news was announced as part of Centrepoint’s full-year results, which saw the advice group record a net profit after tax of $1.8 million.
More to come.
Lots of uninformed comments on here. Considering that Clearview insurance products are not on Centrepoint’s APL, it’s kind of hard for the product spruiking to occur… This move gives Centrepoint more scale which means they’re in there for the long term, as opposed to many of their competitors in the mid -tier space who are currently running on negative cashflow.
The previously Clearview aligned advisers would have likely advised on at least some Clearview product, so you don’t think the APL will get amended to bring on Clearview to aid these advisers in continuing to service their clients? And you don’t think the APL would get an update to include Clearview when they are purchasing 25% of the Centrepoint business? It’s fine to be defensive of your employer but at least be realistic.
Smart move Clearview – well timed – Sell at the top of the market and Centrepoint’s use of over inflated script to purchase. Wealth managers/Licensees along with Stock Brokers should not be allowed to list as a public companies. Hello ASIC, FASEA, How can the Advisers authorised under these licensees maintain their Independence?
Well they would not be classified as independent and their FSG would indicate this.
You do understand that Centrepoint doesn’t own any products right? And they aren’t buying ClearView’s insurance book, just their advisers. That’s like saying Banks shouldn’t be listed in case the bank teller has shares in it.
Felix, Centrepoint do indeed own products. They own Ventura and their VMAPs product is heavily spruiked internally. With Clearview taking a 25% share of Centrepoint there is absolutely now conflict there.
When you say that VMaps is heavily spruiked, do you mean was (prior to the end of rebates etc) or is (now that there is no-one internally in any form of product distribution role). .
Dealer group managed accounts, platform white labels, platform licensee service fees, internally administered SMSFs, and contractual referral arrangements, are all forms of inhouse product. They are additional revenue sources for the dealer group, that are derived from advisers under the dealer group’s control “recommending” those products.
There is nothing wrong in principle with advice firms being listed. But there is much wrong with product firms being licensees. It’s like pharmaceutical companies licensing doctors.
Interesting to see similar ~15% increases in CAF and CVW share prices since around the start of August. Very intriguing timing!
Wonder what this means for software innovation in this country? Choice of Xplan or Xplan. Ford or Holden?
Centrepoint already pretty much forces their dealer group advisers onto their white label version of Xplan as it is.
Centrepoint announced earlier in the year that they are trialling Intelliflow so to their credit they’re at least looking outside of the square.
Ah, the joy. The bad old days of vertical integration are back. Synergies! Squillions! Dear Centrepoint advisers, meet our new shareholder. Dear Centrepoint adviser, Hi, I am your new ClearView BDM…. Dear Centrepoint adviser, meet our in-house wealth manager.
You forgot to mention, Dear Centrepoint Adviser, here are your Clearview sales targets; sorry words to that affect….discounted licensee fees based on Clearview production….sorry, future Licensee fee increases….free Conference tickets for Adviser’s staff….free ‘this and that’…..who’s paying for these discounts if it’s not conflicted remuneration?
Hard to sell Clearview products if they’re not on the APL, just saying….
Please refer to another comment above, and I quote……[i]Dealer group managed accounts, platform white labels, platform licensee service fees, internally administered SMSFs, and contractual referral arrangements, are all forms of inhouse product. They are additional revenue sources for the dealer group, that are derived from advisers under the dealer group’s control “recommending” those products.[/i]…..I suppose Clearview ‘products’ can come in all shapes and sizes and even be opaque to generate income for Clearview. Why would Clearview buy a distribution network if it had nothing to sell, just saying…..
It’s not surprising that the Centrepoint staff member coming in to defend their virtue was late to the party and wonderfully naïve.
The mid tier consolidation begins…..expect plenty of M&A activity quickly in this space.
Will be interesting to see the uptick in Centrepoint alligned advisers recommending Clearview insurances going forward. Ain’t no integration like vertical integration.
What is the value of large licensee’s becoming even bigger? Unless of course you’ve got ownership in products and it’s still about FUM. If you don’t offer those in-house products, and only providing “services” you could only achieve further cost savings by requiring your Advice network to become more like a McDonald’s franchise….where every advisor uses the in-house software and provides advice in a certain way.
The only reason dealer groups exist is to distribute inhouse products. I guess Hayne must have some pretty massive cataracts to have been unable to see that.
Old Chompers was just there for the pay cheque
Centrepoint seems to have done a credible job so far of stepping away from product revenue. They’ve positioned themselves as more of a service provider than a licensee, given they moved well ahead of the market to move to a flat AR fee and to keep growing their service to self licensed advisers. In previous announcements they made it clear that to get to a healthy, profitable position they would need around 500 fee paying advisers, so from what I’m reading this move makes perfect sense.
One assumes this transaction involves an ongoing contractual commitment for all Centrepoint, Matrix, and Clearview advisers to “recommend” Clearview insurance products. Similar to NAB’s and ANZ’s contractual commitments to “recommend” IOOF products.
Conflicted inhouse product advice is still alive and well, it’s just structured more opaquely than before.
Let’s not forget that Centrepoint still have Ventura on the books as well.
this is excellent in my opinion as both have been far more supportive of advisers than the “big” institutions like IOOF, AMP, and the former banks that mostly sold to IOOF which is now being run like ANZ Financial Planning.
Wow Centrepoint alliance are killing it!!! Shuttleworth is really good at talking up a big game and well lets leave it at that… Panorama. get ready for the board to be told many a story.
Now that’s funny. Parasites everywhere in this game. Oh wait its not a game, can someone tell him