IOOF subsidiary Bridges Financial Services has entered into a strategic partnership with Bendigo and Adelaide Bank with respect to advice servicing rights of Bendigo Financial Planning Ltd’s clients.
The arrangement will see Bridges take ownership of Bendigo FP’s client book and servicing rights and provide ongoing financial planning services to clients of Bendigo referred to Bridges via an exclusive referral arrangement.
The transaction is expected to complete on 31 July 2019, subject to satisfaction of customary conditions precedent.
Bridges has agreed to acquire Bendigo FP’s client book and servicing rights for cash consideration of $3 million on completion, plus a further payment payable on the first anniversary of completion, subject to maintaining an agreed ongoing service client retention rate.
Bridges and Bendigo have also entered into a referral and relationship agreement which will see Bridges provide financial planning services to clients referred by Bendigo for an exclusive period.
As part of this agreement, Bendigo will refer Bridges’ financial planning services via its branch network. IOOF expects Bendigo FP advisers will add approximately $1 billion of funds under advice.
While Bridges has found no material issues with respect to Bendigo FP during the due diligence process, Bendigo has provided indemnities in favour of Bridges and IOOF in relation to any liability that may arise from Bendigo’s conduct of its financial planning business prior to completion.
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