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Bendigo sizes up advice acquisitions

The Bendigo Bank’s acquisition of Wheeler Financial Services is a template for further M&A activity in the financial advice market, according to the CEO of Bendigo Wealth.

Since launching its wealth business three years ago, the Bendigo & Adelaide Bank has doubled its funds under advice (FUA) via salaried financial advisers, but is now looking to grow its network of authorised representatives, Bendigo Wealth chief executive John Billington told ifa.

“Our focus [since launch] has largely been on connecting with our retail bank financial planners and customers, but now we are at a stage where we want to look at broadening our offering, and with SMSFs being half of the market we want to play in that.”

While traditionally the bank has sought acquisitions via client book purchases, it is increasingly looking to acquire firms for their expertise and retain staff, with boutique and independent financial planning firms in high demand, Mr Billington said.

Yesterday ifa reported that the bank acquired Geelong-based boutique Wheeler Financial Services in October, with the firm’s staff – which includes a number of SMSF specialists – to be retained, albeit under Bendigo Financial Planning branding.

Mr Billington said the Wheeler acquisition will serve as the “centrepoint” for further merger and acquisition activity and the corporate strategy to grow the Bendigo Financial Planning dealer group’s presence in the SMSF market.

“We really like this group and what they have done to grow the business; we want them to skill up some of our advisers so we can broaden our reach,” he said. “This a real capability grab for us.”

The decision to adopt Bendigo branding on the acquisition, rather than a white-labelled authorised representative, is borne out of a commitment to “transparency”, Mr Billington said, adding that the bank supports moves for enhanced disclosure of financial planning parent companies.

“We’re very proud of who we are as a community bank; when we acquired Wheelers we thought they were a good fit and that there wouldn’t be a negative impact if they adopted our branding,” he said. “Bendigo and Adelaide were one of the first to adopt fee for service, we have always been about transparency.”

Should they “come up”, the bank is keen to examine new acquisition prospects, Mr Billington said, but admitted the bank “cannot compete on a dollar basis” with the larger bank-owned dealer groups, emphasising firms joining the Bendigo network will be doing so for largely cultural reasons.

“Businesses that we do acquire, generally want to get out [of the industry] but want to know their customers will be looked after when they’re gone,” he said. “They want to know that the way they have managed their customers in the past will be able to continue.”