Inan industry first,Professional Investment Services(PIS) has struck a deal with St George to offer banking services through the dealer group’s financial planning offices.
The deal will result in 200 street front offices being opened under the PIS banner, offering a full range of financial planning, accounting and banking services.
PIS managing director Robbie Bennetts says his group would not take on a banking licence but rather will access the banking services from St George under an agency agreement with the offices carrying the PIS name.
Bennetts says the new offices will compete directly with banks, with the objective of supplying traditional banking services alongside a full range of investment, insurance and tax advice.
He says PIS decided to move into banking after the group’s last annual strategic review in October 2002, which identified banks as a threat to the wealth management and financial planning levels of the business.
“We saw that if we were not offering banking services we were missing out on 60 per cent of the market by not getting debt products out to our clients,” Bennetts says.
“PIS’ plan is to double in size over the next five years and we were trying to do that in an area that makes up 10 per cent of the financial services market. Cash transactions make up more than 60 per cent of the same market, which gives us a better base for those plans.”
The deal was brokered on the St George side by the managing director ofAdvance Funds Management, Kate Mulligan, who says the focus on the debt side of the market would allow PIS to service a client’s full needs and allow closer distribution of the bank’s products.
“From the St George point of view, the deal provides a pipeline to supply co-badged St George and Advance products that can be distributed through the PIS offices,” Mulligan says.
Advance was involved with the deal due to its relationship with third party advisers in the market through its funds management distribution, which Mulligan says allowed it to pitch the idea back to the bank.
St George was also keen on the deal as it would supply products and training, while PIS would cover the cost of staff and premises. The move would also give St George a stronger presence beyond its home state of NSW.
The first of the offices opened on the Gold Coast on Monday this week, with the remainder to open on a rolling basis as existing PIS offices are moved into the new banking and advice model.
Bennetts says the move has been well accepted by the dealer’s advisers, with a large number of practices having 500 to 1,000 clients, many of which are businesses with loans, creating a captive audience within the group’s existing clients.
