Networth News

Welcome to the Networth News update for Thursday the 1st of September.

Count Financial counterbid possible

A bidding war could emerge for Count Financial following Commonwealth Bank's $373 million move to acquire the financial planning group. The Australian reports that ANZ, Westpac or NAB could also be interested in buying Count Financial, according to analysts. While Commonwealth Bank's bid is expected to clear regulatory hurdles, Nomura analyst Victor German said there was a risk of a counterbid from another domestic bank. Consolidation within Australia's wealth management industry is expected to increase with the proposed introduction of the Government's Future of Financial Advice (FoFA) reforms.

Acquisitions to increase in wealth management sector

There will be an increase in acquisitions of domestic wealth management firms by major Australian banks, according to analysts. The Financial Review reports that under the Government's Future of Financial Advice (FoFA) reforms, large, vertically integrated financial planning firms would likely be targeted by banks that had fund managers and adviser platforms as part of their businesses. Banks such as CBA are strengthening their wealth management presence as banks are faced with the challenge of growing revenue in a low-credit growth environment.

FPA takes aim at free riding planners

Financial planners who are not members of a professional industry body need to stop taking a “free ride” on the coat-tails of their professional peers, according to the Financial Planning Association (FPA). Investor Daily reports that there are about 5000 to 6000 advisers out of an estimated 16,000 financial planners in Australia that do not have ties to a professional body. The FPA said such advisers exist in a professional vacuum, and welcomed moves by Financial Services and Superannuation Minister Bill Shorten to set the term financial adviser into law as well as a proposed code of ethics being developed by ASIC for the profession.

Super funds to ramp up life/income protection insurance

Superannuation funds are likely to a bigger share of the life and income protection insurance market over the next 15 years, according to Rice Warner Actuaries. The Financial Review reports that superannuation funds need to tailor their advice to members' needs in order to capitalise on this opportunity. Wholesale insurance providers, which are largely super funds, are likely to see growth of 11 per cent a year for life and income protection insurance, according to Rice Warner Actuaries director Richard Weatherhead. He said that wholesale and direct providers have more capacity to expand into the life and income protection insurance market than advisers.