CountPlus acquires Commbank’s Count Financial

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.

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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.

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Did I read this right, CBA has sold an asset they paid $343m for for $2.5m? Good on ya Barry !!

My sentiments exactly. Had to read it twice to make sure I wasn't missing something. Spit in the ocean for CBA but you've got to wonder.

talk about selling CBA a pup!! Baz gets $343m for Count then CBA sell it back for 2.5m. No idea why they bought it in the first place... dodgy business model of Accounants flogging wrap platforms via SMSF. Perhaps because CBA exec Marianne Perkovic was a CEO at Count.
More money than than sense (and ethics) these execs... Shareholders should rise up and hold these clowns to account!!

Count was floated at an issue price of 40 cents in 1999.
CBA owned 20% of Count by 2011, and then bought out the remaining 80% for $1.40 a share (or CBA stock) during 2011.
Count spawned Countplus at $1.50 in about 2010. Countplus has since been ailing around 50 cents, but now gets a reprieve by buying back all of the remnants of Count at about 2 cents on the dollar, along with a $200 million indemnity.
The question for me is can CBA do this again ? Can CBA watch Countplus recover to say $1.50 in a few years, then buy out Countplus in say 2025, then sell it back in 2035 to those of us original Count shareholders still alive - for 2 cents in the dollar ?
I don't think so. But on the other hand execs at CBA seem to have defective memories with a 20 year lifespan.

Often times, execs and lawyers have to float big ideas so they can justify their jobs. The Banking model of holding peoples money virtually for free and lending it out for a profit is a genius business model but there is a desire to grow so coming up with hair brained schemes such as buying count off their mates gets a big pat on the back and bonus.

An 'Alan Bond' moment in the true sense.

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