Centrepoint Alliance to acquire Enzumo

From

Angus Benbow

Centrepoint Alliance (ASX: CAF), a leading provider of advice and business services to financial advice firms throughout Australia, will acquire financial planning technology solutions business Enzumo from Chant West Holdings (ASX: CWL) for $1.5 million.

Enzumo is the leading provider of financial planning software consulting, customisation and workflow solutions, and e-learning management solutions to the financial planning and advisory industry.

Enzumo’s clients include some of Australia’s largest banks, mid-tier wealth institutions, medium-sized financial advisory and dealer groups as well as individual financial advisory practices.

Greater technology support for advisers

Angus Benbow, CEO of Centrepoint Alliance, said the acquisition was the latest step in the company’s strategic refresh and will enhance Centrepoint Alliance’s technology offering to the advice sector.

“Technology has been driving greater efficiencies for advisers over recent years,” said Mr Benbow.

“COVID-19 has completely reframed the role of technology in advice delivery and will accelerate a far broader utilisation of technology across the sector.

“Advisers’ eyes have been opened to new ways technology can assist them, and they will be taking a multi-faceted approach to technology adoption in the future.

“As part of our strategic refresh, we anticipated increased demand for technology support services from both our authorised representatives and self-licensed businesses. We are already making significant investments including the introduction of online adviser portal Centrepoint Connect and the development of AI-enabled practice management tool Centrepoint Adviser Intelligence.

“The acquisition of Enzumo will enable us to develop our technology and data services further to assist all those in the Centrepoint Alliance network to be both more effective and profitable, as well as ensuring continued support for Enzumo clients.”

Complementary businesses

Both Centrepoint Alliance and Enzumo will continue to service and support advisers and there will be no immediate change to either business model.

“Centrepoint Alliance supports both self-licensed advisers and licensees – we already provide services to some of Enzumo’s largest clients, so Enzumo’s technology solutions are a natural complement to our advice and business services,” said Mr Benbow.

“Enzumo has been very successful in consulting to both self-licensed advisers and licensees. It is the strength of these relationships that attracted us to the business and where we see opportunity for continued expansion. Enzumo has a very high-quality team, and I am delighted to welcome them.”

Brendan Burwood, CEO of Chant West Holdings Limited said “Both Centrepoint Alliance and Enzumo share a culture that is focused on providing the services and support that licensed and self-licensed financial advice firms need to provide great advice to their clients. These complementary services will give the Enzumo business increased talent and scale to compete in the financial advice technology market.”

Recurring fee-based revenue models

The acquisition of Enzumo will further strengthen Centrepoint Alliance’s move to a scaleable, recurring fee-based revenue model, which commenced in August 2018 as part of the business’s strategic refresh.

Both businesses operate subscription-based fee models.

“Since embarking on the transformation of our business, we have achieved great success,” said Mr Benbow. “In 18 months, we have shifted all our licensed advisers to our new subscription-based fee model. Recurring adviser fees are now our largest income source and increased by 37% during the first half of FY20. The average tenure of our licensed advisers is nine years ­– even after accounting for the strong growth in the number of advisers joining us during the last two years.

“The first half of this financial year was also a record period for adviser recruitment in which we welcomed 55 new advisers to our licence and grew net adviser numbers by 10%, despite the significant contraction in the overall number of advisers.”

Mr Benbow said the Enzumo acquisition is a significant milestone for Centrepoint Alliance. “We commenced our strategic refresh in the firm belief that Australians need a strong and sustainable financial advice sector. The last few months have provided a clear illustration of the value of advice and the importance of thinking about technology differently, and has further emboldened Centrepoint Alliance as we continue to execute on our strategic priorities.”

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