The Commonwealth Bank has sold one of its key wealth management assets, Count Financial, to associated firm, CountPlus.
The transaction has been confirmed to the Australian Securities Exchange (ASX) and occurs less than a decade after the Count business was sold to the Commonwealth by its founder, Barry Lambert, in a transaction valued at $343 million in 2011.
It also comes barely three months after the Commonwealth Bank’s decision to place its wealth management demerger on hold while it deals with issues resulting from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The two companies informed the ASX that they had entered into an agreement which would see CountPlus pick up the business for $2.5 million describing CountPlus as the logical owner of the business.
They said the Commonwealth Bank would continue to support and manage customer remediation matters arising from past issues at Count Financial, including after completion of the transaction and provide a $200 million indemnity to CountPlus for all claims notified within four years of completion.
Commonwealth said it owned 35.9 per cent of CountPlus and intended to sell its shareholding down over time.
The Commonwealth said that from a financial perspective, the transaction would result in it exiting a business that in the current financial year was estimated to incur a post-tax loss of approximately $13 million.
Commenting on today’s transaction, CountPlus chief executive, Matthew Rowe, told Money Management that his company had approached the Commonwealth and that while the transaction still required shareholder sign-off the board was very happy with the arrangement.
He said the transaction would ensure continuity of business for both Count advisers and their clients.
Lambert, who founded both Count and CountPlus, said that while he had not been involved in the transaction he was fully supportive of the outcome.
“The need for professional financial advice has not reduced, it just needs to be more professional and more efficiently delivered,” he said.
“Count has always been the home of the Professional Financial Adviser and with the changes taking place in the industry, Countplus under the thought leadership of Matthew Rowe, and a strong board, combined with its Accountants’ succession model, is the natural home of professional advisers generally and Accountants in particular,” Lambert said.