Distribution business Pharos Financial Group, parent company of dealer group Madison Financial Group, has entered into a joint venture to establish a new specialist research business in the managed funds sector.
The data and profiling tools developed by the as yet unnamed joint venture will be used to underpin the decisions of Madison’s investment committee on behalf of its 67 planners ($2.5 billion in funds under management) and also made available externally to the industry.
An additional new joint venture by Pharos with securitisation business Asset Backed Finance will give Madison’s planners access to an array of lending products, including mortgages, commercial lending and lines of credit.
The ultimate objective of the so-called Le Grande Financial joint venture is to develop a full private banking capability that would be distributed by Madison’s planners as well as by external brokers.
Pharos and Madison director Mark Perry said the “suite of products and services flowing from the two joint ventures would allow planners to transition to offering private banking and holistic wealth management advice to their more affluent clients”.
“Two of the missing ingredients to this plan until now have been direct access to private banking products, at the product development level, and access to specialist research at the advice level.”
Perry said the Le Grande Financial joint venture, which was finalised last week, was motivated by the “repeated requests of some of our members, who were unhappy at having to refer mortgages externally to mortgage houses”.
“Mortgages are seen by our planners as an intrinsic part of the financial planning process, and, additionally, there is a keen awareness that there is some pretty good cash flow associated with these products.”
The planned research start-up is to be headed up by a “couple of very well-known personalities associated with research in both the managed funds and direct areas”, according to Perry.
He said it was “not intended” for the start-up to compete with the existing research houses, but it would be used to “critique some of the base research that is provided by them”.
