An SFG Australia spokesperson told InvestorDaily that recent speculation about the IOOF acquisition bid has hastily assumed the transaction is confirmed to go ahead, pointing to an upcoming shareholder vote scheduled for August.
“IOOF has expressed interest in acquiring SFG Australia via a Scheme Implementation Agreement,” the spokesperson said. “As indicated in the ASX release, the board’s recommendation is subject to an independent expert concluding the proposed transaction is in the best interests of SFGA shareholders.
“Our shareholders are expected to vote on the proposed transaction in August 2014 [and] the Supreme Court of NSW has to approve the Scheme, so it is by no means completed that SFG Australia has been acquired by IOOF.”
Despite this clarification that the deal is yet to be approved, Nick Bedding, head of SFG’s financial planning arm, Shadforth Financial Group, told InvestorDaily he anticipates the acquisition will have a number of benefits for its adviser network and clients should it be approved.
“The benefits are several-fold: firstly, there are some service offerings that we have been looking to develop that we haven’t been big enough to implement, such as trustee services and estate planning services, that the IOOF group brings to bear,” Mr Bedding said.
“Secondly, the advisers will benefit from additional support services, and technical services, such as additional XPLAN training,” he said, noting that these are thanks to “the enormous benefits of scale”.
“I’ve just finished a national roadshow, speaking to every one of our advisers, and the feedback has been overwhelmingly positive,” Mr Benning said.
Mr Bedding is one of a number of board members and senior executives at SFG Australia who have substantial holdings in the listed entity, with a personal balance of 8,870,851 ordinary shares at the close of the 2013 financial year, according to shareholder information provided to the ASX.
The comments come as a number of business owners and commentators in the retail financial planning market have offered analysis about the market implications of the $670 million takeover bid.
Neil Salkow, co-director of boutique financial planning firm Roskow Independent Advisory, questioned whether the deal is a sign of consolidation “squeezing independents out of the advice sector at the expense of ordinary people”.
In addition, Michael Pinn, director of self-licensed accounting and advice firm Pinn Deavin told InvestorDaily’s sister title ifa that IOOF must either be “very brave” or “very informed” to make the bid.
“You have to wonder what special knowledge IOOF may have to make them so bold as to acquire further advice channels when they are so committed to manufacture and distribution,” said Mr Pinn.
“As a public company, you would not be expected to commit such large sums of money to a major acquisition when the vertically-integrated business model is allegedly subject to a national inquiry,” he said, in a reference to the current Financial System Inquiry.
