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After putting its own acquisition strategy on hold, Rabobank’s subsidiary Rabo Financial Advisors (RFA) reversed its approach in its quest for scale.
The group announced today that it has entered into an agreement with AMP-owned Hillross to sell 100 per cent of its shareholding.
“From a financial planning perspective, we could see that to really provide the best possible service right across the group you need scale. I think financial services has become a bit of a scale game,” said Colin Williams, general manager, RFA.
“Even if we’re to double or triple in size, we’d still be quite small. So it just made sense after looking at a range of options.”
Williams said RFA actively went looking for a provider that would match it in terms of its branding and appeal, and at the same time deliver a niche service.
“We looked around, we knocked on a number of doors looking at options, and searched for what would be the best option in terms of our strategic planning,” Williams said. He noted that the combination of Hillross and AMP “well and truly stood out”.
Williams said Hillross was “an extraordinarily close match” in terms of how well aligned their approved product lists, recommended investments and platforms were.
The groups announced the agreement this morning, with the acquisition expected to be completed by the end of November this year.
Because Hillross will be purchasing the entire business, RFA’s 40 staff (including 17 advisers) and its $430 million funds under advice will move across to the provider.
RFA will eventually take on the Hillross branding, but it will initially maintain its own Australian Financial Services Licence.
The acquisition should be completed by the end of November this year.
The acquisition also sees AMP-owned Hillross and Rabobank enter into a referral agreement whereby Rabobank will refer clients exclusively to Hillross.
