Financial products and services provider netwealth was not interested in buying the remainder of the business units of Paragem, the company’s managing director has said.
Paragem and netwealth said in separate statements yesterday that netwealth had agreed to buy Paragem Dealer Services for an undisclosed sum.
They said Paragem managing director Ian Knox and director Charlie Haynes would remain directors of the dealer services business and remain involved in managing it.
Knox said in a statement the sale of dealer services gave Paragem scope to focus on its remaining wholesale licence activities.
Asked whether netwealth was looking at buying the remainder of Paragem, netwealth managing director Michael Heine told InvestorDaily: “No. We have no involvement and no interest in being involved in that.”
The netwealth Group is part of privately-owned Heine Brothers Group.
Over the years, netwealth has been bolting on acquisitions, resulting in a suite of financial products and services, including platforms, self-managed superannuation fund administration and a dealer group.
Asked about further acquisitions, Heine said: “We’re covered. We have our own dealer licence and we have the dealer service which services the independent adviser.
“We don’t see ourselves as having any further interest unless some interesting opportunity comes up, which we would always have a look at.”
The Paragem acquisition provides compliance and other services to about 200 licensees representing 1300 advisers.
Heine said the dealer services acquisition would grow naturally as independent financial advisers focused more on compliance and other requirements associated with the government’s Future of Financial Advice reforms.
“Two hundred licensees is a substantial number, but we would certainly see that growing as more businesses look to acquire their own licences rather than being part of a dealer group that is bank owned,” he said.
Asked how long it would take to bed down the acquisition, he said the dealer services arm would operate as a standalone business and would not be integrated into netwealth.
“There are no changes that are taking place. We’re not changing the staffing, we’re not changing the location, we’re not changing processes, procedures, compliance or anything else,” he said.
“It’s not a business that we bought to say, ‘Can we double this and make it pay it’s way.’ It’s a business that we see as being critical to the independent financial market for the non-bank-aligned financial advisers. It’s about continuing to do very much what’s been done.”
He said netwealth might change the Paragem Dealer Services name, but was in no hurry to do so.
“That’s something we’ll have a look at in time. We do see the need for a separation, but that’s something we can do in the days and months ahead. There’s no urgency to do anything like that,” he said.
