With Envest taking a 60 per cent majority stake, Wealth Architects chief executive Callum Mitchener details the firm’s expansion plans and why Australia’s financial advice landscape is seeing foreign investment.
Earlier this week, it was announced Envest Group, part of global independent insurance distribution platform Ardonagh Group, had acquired a majority 60 per cent shareholding in the Queensland-based firm.
Envest is the largest privately owned insurance distribution group in Australia, founded in 2016.
Speaking to Money Management, Mitchener, who has moved from managing director to chief executive of the Brisbane-based company, said the deal values the company at $101 million.
The deal will also see Wealth Architects acquire the life insurance business PSC Life from Envest, which will support the firm’s growth ambitions in life insurance. PSC Life provides specialised advice around business, group and personal life insurance.
In January, it acquired Victorian life advisory business Fitzpatrick Financial Services which specialises in life and disability insurance for individuals, families and business owners, and managing director Luke Considine has joined the firm’s executive committee.
“We expect the business to be evenly split between financial advice and life insurance in the future. At the moment it is weighted towards financial advice, but we want it to be across both areas,” he said.
“Envest already owns a life insurance business in New Zealand as well, and that will be moulded into the Wealth Architects brand.”
He said an attraction of Envest, having known the firm for a number of years, is their “first class” M&A expertise, which is an area where Wealth Architects is heavily active.
It is already planning its next three acquisitions with firms in Cairns, Melbourne and Brisbane, and a goal to complete five acquisitions each year.
It primarily enacts M&A via acquiring firms, rebranding it as Wealth Architects and then setting the adviser up to run that business, reducing the business complexities for the individual adviser and providing them with financial backing and tools.
The move by a global player into Australian financial advice is a trend occurring in the marketplace currently, with two US private equity houses in the frame for Insignia, and Oaktree Capital Management and Barings both making investments into AZ NGA.
Mitchener said: “The advice space is exciting for advisers and clients. It is a safe industry where people want to go. The government is making changes, and everyone wants to be involved. The profit margins in advice are attractive to overseas capital, the industry has sorted itself out.”
