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Big bank AFSL 'land grab' over

Australian Unity’s proposed acquisition of Premium is evidence of bank consolidation being replaced by a new trend of mergers in the "grey space" between insto and independent licensees, says an M&A expert.

Australian Unity Personal Financial Services on Friday announced its intention to acquire all of the shares of Premium Wealth Management, with the support of Premium’s board and senior management.

Commenting on the proposed deal, Forte Asset Solutions managing director and former Deloitte Financial Services CEO Steve Prendeville told ifa the industry is witnessing the end of the “land grab” by the banks and the beginning of a period of “strategic mergers” between groups that are “culturally and philosophically aligned”.


“While Australian Unity does have a substantial product manufacturing arm, it has an independent mandate and an open architecture – there is no product bias as such, which is rampant at the major institutions,” Mr Prendeville said.

“This culture and independent mandate makes them more palatable to independent, mid-tier groups like Premium who are looking to achieve scale without selling out.”

Mr Prendeville lists IOOF as another example of a “grey space” dealer group with an “independent mandate but institutional size”, whose recent proposed acquisition of SFG Australia is a further sign of this emerging trend – along with the recent merger plans between Infocus and Patron Financial Services.


“Cultural alignment and independence of product choice is very important to the remaining independent and boutique dealer groups,” Mr Prendeville said. “It is unlikely we will see the banks come back into the buying space anytime soon.”

Speaking to ifa, Premium Wealth Management CEO Paul Harding-Davis – a longstanding advocate of non-conflicted advice – concurred with Mr Prendeville that the culture and product distribution philosophy of Australian Unity was a major factor in his support for the takeover bid.

“We are very comfortable with the structure and culture of Australian Unity,” Mr Harding-Davis said.

“We have gotten to know the business and its managerial team very well in recent times. As a not-for-profit and a mutual, they are clearly very focused on the concept of wellbeing and have the very best interests of the consumer in mind.”

Mr Harding-Davis said authorised representatives of Premium Wealth Management had only been informed of the takeover bid on Friday and that he will be canvassing opinion among his advisers in its network of 21 member firms in coming days.