The managing director of Snowball Financial Group has reaffirmed the company’s commitment to its non-aligned market sector.
Tony Fenning used his address to the company’s first annual general meeting since its merger with Shadforth Financial Group to state protecting its brand in the non-aligned advice segment was paramount.
As part of the commitment, the combined entities of Snowball and Shadforth will operate under the name SFG Australia, once approved by ASIC, and intends to capitalise on its non-aligned position through “transformational” consolidation.
“You can never say that a corporate transaction won’t come around to change that, but certainly in our whole approach to everything that we do, we start from the position of what’s in the interest of clients and work back,” Fenning said.
“The bigger guys tend to start from the product and then [work out] who it’s appropriate for. It’s a fundamental difference in the way we think about servicing clients.”
He said SFG Australia would participate in industry consolidation through add-ons at the smaller end of the market.
An acquisition was currently in the due diligence stage and was of a similar size and nature to the recently purchased Jeena wealth management firm, he said.
In addition, there were close to 100 discussions currently taking place with SFG, he said.
“It’s a big number of people that are in communication with us and [they’re] in all sorts of stages, ranging from preliminary through to term sheet stage, but not due diligence,” he said.
“We think there’s going to be lots of opportunities and we think we have quite a substantial pipeline, all of which takes time. [We are] strategically looking for transformational deals by which we mean things that are large and likely to change the shape of our business.
“There are a few of the obvious suspects being our peer listed companies and some others that are reported to be available that we’re interested in and will talk to.”
SFG had implemented the first stage of reviewing its executive remuneration structure to ensure that “the rewards are fair in the interest of shareholders”, he said.
The group is also optimistic that the sell down of Shadforth shares will be back on the table.
“There’s no commitment from anyone, but our feedback from shareholders on the ex-Shadforth side is that there is a willingness to facilitate some more liquidity in the company stock by selling down [to] what they consider to be a fairer price,” Fenning said.
SFG’s initiatives for 2012 include the continuation of its platform review to ensure product and service innovation going forward and offering broader models on the Mosaic portfolio construction capability in order to attract different advisers.
“We’re into really using the merger now as a platform to innovate in the new year across all the services that we deliver,” Fenning said.
“Our challenge for 2012 [is] to get the client benefits going.”
