The decision by Futuro Financial Services to sell a minority stake to AMP does not equate to the dealer group selling out, the company's managing director said yesterday.
Dennis Bashford told InvestorDaily naysayers who viewed Futuro's sale of 10 per cent to the financial services giant as selling out were ill-informed.
"I think a lot of people are going to be saying that. The reality is that we always said we were going to sell it," Bashford said.
"In lots of ways it's a bit like selling out to your brother. Whilst everyone says it, the changes, and I'm not talking about just for the next 12 months or so, the changes over the long term are going to be minimal. So if they say I've sold out, then I'd say well prove it."
Talks between both parties were first held in 2006, however, neither party acted on discussions at the time, Bashford said.
"The timing started to get serious probably about two years ago. Our relationship though with the personalities of [AMP and] this transaction goes back to 2006," he said.
"The people we were dealing with were people we knew of and over that time we were able to watch the way they conducted themselves and the business and the licensees.
"I think in the environment today there is enormous value for everyone in having a strong strategic partner."
He said Futuro advisers were informed of the AMP arrangement at a meeting in Melbourne yesterday.
"We've been telling our advisers for two years that we're looking for a strategic partner. So [yesterday's] announcement where we have brought them in from all over Australia, everyone knew what the announcement was going to be," he said.
"There are no surprises."
Asked whether he would remain with Futuro, he said he would.
Commenting on the deal, AMP Financial Advice Network director Andrew Waddell said: "In more recent times we had the opportunity to talk to them [Futuro].
"We haven't proceeded with them [Futuro] in the past as we didn't believe we had a cultural fit. We think we've got a wonderful fit with the Futuro business, so we're very pleased to extend our services and resources to help the Futuro business to flourish in the future.
"We're, on an ongoing basis, looking at opportunities."
Asked whether AMP was considering Matrix Financial Solutions as an opportunity, Waddell remained tight-lipped.
"I think we've opened our mail. I think I'd put it that way, but I've not personally had any conversations with them," he said, making reference to AMP receiving Matrix's sale offer document.
"I think if we find high-quality advice businesses who are focused on their clients that believe in quality of advice and looking for a high-quality partner, we're happy to talk with those people."
Waddell and Bashford both admitted concerns regarding approved product lists hampered any earlier deals between the parties.
"That was a major issue for us when we were looking at who we were going to get into bed with, because it's important to our planners that the product used is not dictated to what they can do and they're not restricted," Bashford said.
"So it was a major part of our due diligence and the product list just wasn't an issue. It's very extensive in its own right."
Waddell said AMP's ownership of the North platform played a key role in cementing a deal. Bashford agreed.
"[Interest in North] was also true too because it was also part of our due diligence that we know that North is a significant part of [AMP's] business, and we've had goes before where we've looked at promoting other platforms, in particular on the promise that the platform was going to change in the future," Bashford said.
"So in terms of North, and in terms of the products, if they weren't market leading, we wouldn't be talking right now."
Yesterday, AMP announced it had taken a 10 per cent minority stake in Futuro.
The transaction would take place in three stages, with the initial 10 per cent minority stake extending to full ownership in five years, subject to a number of conditions being met by both parties, AMP said in a statement.
Futuro will continue to operate under its own licence during the initial stages of the transaction and eventually will be transitioned to AMP-owned dealer group Charter Financial Planning.
Futuro has 80 financial advisers, 58 practices and about $2 billion in funds under advice.
