The Future of Financial Advice (FOFA) changes have acted as a catalyst prompting Fairfax Media to exit its InvestSMART business.
The company announced to the Australian Securities Exchange (ASX) today that it had entered into an agreement to sell InvestSMART to Australasian Wealth Investments for a cash consideration of $7 million.
The announcement said completion of the transaction was dependent on a capital raising process by Australasian Wealth and that in the event the transaction did not proceed Fairfax would be paid a break fee of $150,000.
Fairfax acquired InvestSMART in 2007 as an online financial services portal "providing self-directed investors with low cost access to financial information and products".
The announcement said that following the FOFA changes, Fairfax believed the sale of the company to a financial services provider made sense "so the business can continue to be developed for the benefit of its clients".
However the announcement also said the sale agreement provided for plans to maintain a commercial relationship between Fairfax and InvestSMART, including the sale of display advertising on investsmart.com.au and the promotion of Fairfax products and services to the InvestSMART client base.
