Paragem offloads dealer services business to netwealth

Paragem has sold its dealer services business Paragem Dealer Services to privately owned platform provider netwealth following an approach by the firm.

The move allows Paragem to focus on the growth of the Paragem Wholesale Australian Financial Services Licence (PWA), while netwealth wanted to further expand its adviser service offering to the independent financial adviser (IFA) market, according to Paragem managing director Ian Knox.

"As the number of non-bank aligned dealer groups shrink, we envisage a rebalancing of the market with a growing number of advisers adapting to FOFA (Future of Financial Advice reforms) and wanting to grow their practice by charging correctly for advice," Knox said.

Paragem aims to specialise in assisting this transformation to help practices increase in value, and has previously stated an interest in providing a non-aligned licence for accountants who do not wish to be conflicted with bank ownership, Knox said.

Both Knox and fellow Paragem director Charlie Haynes will remain as directors of Paragem Dealer Services in an ongoing management role and working with the netwealth board, netwealth stated.

"The acquisition of Paragem Dealer Services allows us to invest in a business which strongly supports the growth and maintenance of non-institutional dealer groups and advisers," said netwealth managing director Michael Heine.

"On top of the ongoing consolidation of the industry, FOFA is going to put further significant demands on independent advisers who will require greater advice and support in adapting to the changing regulatory and competitive landscape. We see ourselves supporting these groups in meeting these changes through the services that Paragem offers," Heine said.