Top 5 winners: 2010
Craig Dunn’s AMP was the victor in its heated battle to acquire AXA Asia Pacific, leaving National Australia Bank to lick its wounds.
1. AMP
It took more than a year of patience, but in the end Craig Dunn’s AMP was the victor in the heated battle for AXA Asia Pacific (AXA AP), leaving National Australia Bank (NAB) to lick its wounds.
AMP made its initial $5.34 per share bid for AXA’s Australian and New Zealand operations in November last year.
The offer was promptly rejected by AXA AP, and later sweetened by AMP to $6.22 per share. The week before Christmas NAB swooped in with a more welcome $6.43 per share offer, ‘gazumping’ the original bidder and sparking a cozy and confident relationship between NAB and AXA.
Rather than raise its offer, AMP lobbied from the sidelines on the importance of the creation of a ‘fifth pillar’ in financial services and against the market domination inherent in a NAB/AXA merger.
The plan worked. Thanks to a red light issued to NAB by the competition watchdog, AMP was able to return to the table with an offer matching NAB’s at $6.43 per share — one AXA AP’s directors finally agreed to late last month.
2. Term deposits
Inflows into managed funds slowed to a trickle in 2010, leaving fund managers despondent and dealer group revenue at a standstill.
Financial advisers and investors watched cautiously from the sidelines as concerns over the health of the European and US economies continued to mount.
The winner from this prolonged period of inaction were term deposits.
The products, offering returns in excess of 6 per cent for terms as short as six months, have seen inflows pouring in from far and wide, with the trend showing little sign of abating.
3. Superannuation funds
The resources industry’s pain became the superannuation industry’s gain when the Labor Government promised to impose a tax on the former to deliver a boom to the latter.
The superannuation industry rejoiced when the Labor Government promised to raise the superannuation guarantee to 12 per cent over the next decade.
It is a strategy that will prove lucrative for the superannuation industry (and the companies that depend on the industry for their survival) but despite the boost, most Australian retirees are still likely to be without adequate savings in their later years.
4. Platforms
Price pressures are squeezing both the funds management and advisory ends of the financial services value chains, but platforms are still sitting pretty and enjoying a big slice of the pie.
Many platform providers also believe they have been successful in convincing Treasury officials in charge of the Future of Financial Reform legislation that they are product agnostic, and as such shouldn’t be included in any ban restricting the payment of volume rebates from product providers to licensees.
Many platforms see the proposed reforms as a boon for their business, particularly if more dealer groups seek to white label platforms in order to retain a share of the funds management pie.
5. Fortnum Financial Group
Ray Miles was popular while at the helm of dealer group Associated Planners, and was missed by many during his period of exile (the result of a restraining order issued by Genesys Wealth Advisers, as it is now known, in 2008).
Miles re-emerged this year as the chief executive of largely adviser-owned dealer group Fortnum Financial Group, and the dealer group has attracted more than 15 new practices, many of which made the move from Miles’s former stomping ground at Genesys.
ANZ-owned RI Advice Group took a 20 per cent stake in Fortnum, and Miles has now poached RI Advice Group’s investment research team in order to build a joint-venture portfolio construction business.
