Commonwealth Bank of Australia (CBA) has struck deals with a number of top-tier dealer groups as part of its new financial planning division’s accreditation process.
CBA national manager for specialist markets Stewart Creighton told InvestorDaily the group was in talks and had accredited a number of top dealers, including Sydney-based group Financial Services Partners.
While unwilling to reveal the names of any other groups, Creighton said CBA’s specialist financial planning banking division was talking to more than 10 of the top-tier dealer groups.
“We have only approached the top – I won’t nominate a number – but [they are] Australia’s top dealer groups and networks,” he said.
“Our pipeline over the last couple of weeks has ballooned out significantly. You don’t expect December and January to be busy months, but . we’ve seen it’s much more than a seasonal impact.
“We’ve had 100 per cent success rate in our discussions. Every dealer group that we’ve spoken to wants to be part of the process.”
Through CBA’s accreditation, advisers of the selected dealers gain access to 3.5 times the recurring income of their business.
The funding offering compared to only 1.75 times the recurring income of adviser businesses by the other lenders, Creighton said.
The loans are being used to fund succession and merger and acquisition opportunities.
Of the signed groups, Creighton said the majority of transactions were being done to buy client books and fees.
“Buying books is the number one transaction that we see. So it’s planners not buying the business of the other planner, but buying the book of clients from another planner,” he said.
“Merger and acquisition of the whole business is another aspect and succession is another one.”
He said he expected to close out a number of the other accreditations next month.
The division was launched in October last year. It was developed after the banking group recognised there were greater opportunities in the industry outside of its own dealer group, Financial Wisdom.
