Mergers and acquisitions: unexpectedly branded
In the space of just 18 months, the Australian financial services industry has been subjected to one of its most significant periods of consolidation, yet the Australian Competition and Consumer Commission (ACCC) has remained impassive.
Westpac has taken St George, IOOF and Australian Wealth Management have merged and then taken Skandia, NAB/MLC has taken Aviva Australia and, now, AMP has emerged with a bid for AXA Asia Pacific.
While some might argue this activity has not significantly altered the competitive dynamic of the nation’s financial services industry, it has certainly reduced the diversity of the underlying options available to financial planners.
Moreover, it is arguable that the mergers and acquisitions have reduced the sourcing of the products they might ultimately recommend to clients.
What needs to be closely examined by the ACCC is not so much the overarching ownership of particular companies, but how this filters down into the operations of their various market segments, subsidiaries and sub-brands.
A combined AMP/AXA Asia Pacific will represent a substantial force in the Australian financial services industry, particularly where wealth management and insurance is concerned. Indeed, such a combined entity might arguably act as a counterbalance to the likes of Westpac/St George and NAB/MLC/Aviva.
But what these mergers and acquisitions have also served to do is change the commercial and philosophical ecosystems of individual financial planners. People who consciously sought to avoid working under a major bank brand have found themselves doing so. Clearly there are planners working within the AXA framework who will be uncomfortable working under the AMP umbrella.
Is this a bad thing? Will it simply give rise to more independents and more boutiques?
These are questions that can and should be examined by the ACCC.
After examining the situation it may determine that it is not justified in acting. However, it owes it to the broader industry and consumers to ensure that the right questions are actually asked.
— Mike Taylor
AUTHOR
Mike Taylor
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