AFS frustrated by acquisition delays
Group chief executive of Australian Financial Services (AFS), Peter Daly (pictured), has expressed frustration with protracted negotiations over the company’s acquisition, claiming the dealer group was stagnating as a result of delays.
Speaking to Money Management, Daly said AFS had had to delay the development of several major initiatives including a self-managed superannuation fund (SMSF) service and a managed discretionary account (MDA) service, and was finding it difficult to acquire planning practices because of uncertainty over finalising the deal.
AFS’s platform provider is currently in discussions with the potential buyer regarding information about the dealer group.
“If we are acquired by an outside organisation, does that organisation already have some of these facilities? Are we going to be in the position to pick the eyes out of a potential existing offering?” Daly asked.
AFS had been stagnating for at least nine months, with the only profit growth because of increased efficiency, Daly said.
AFS had been in discussions with two dealer groups, and had to tell them it was too difficult to acquire them until AFS knew what was happening with its own acquisition, Daly said.
A lot of practice principals were also backing off from acquisition discussions because they didn’t know which company AFS was being sold to, he said.
The development of the SMSF service, which was launched with Onevue late last year, was initially slowed down, but AFS decided to continue developing it anyway, along with the MDA service, after negotiations continued to drag out, Daly said.
“At this point, I don’t believe that the SMSF solutions that they have are at the same level capacity as what we have developed,” he added.
The MDA would have three tiers for the different capabilities of their planning practices, as well as two administrators to provide choice to their practices. They hoped to launch it in July, Daly said.
Daly admitted AFS would probably withdraw from the market if the acquisition collapsed.
Due diligence had been completed on AFS at the end of the January, Daly said.
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