Paul Barrett

AZ NGA-backed financial advice firms, Priority Advisory Group and Wise Planners will merge to form a large multi-disciplinary professional services firm on Sydney’s north shore that specialises in wealth management, retirement planning, aged care, life risk insurance, and workplace financial advice.

The merged entity will operate under the Priority Advisory Group brand and employ a dozen financial advisers.

According to Zvi Teichtahl, Chief Executive Officer of Priority Advisory Group, the deal will create a business of significant size and scale with the capability and capacity to serve more clients.

“This strategic partnership is a key step towards our joint vision to create a thriving professional financial services hub on the north shore of Sydney” he said.

“We have clients all over Sydney and Australia, but most of our clients and referral partners are based on the north shore, where there is a lot of residential property development, retirement villages and aged care facilities.”

“Aged care advice is one of the fastest growing areas of our business and there is also strong demand for life risk insurance advice, given the large number of professionals and young families buying apartments in the area. The group’s core Personal and Family Wealth business will also be strengthened with this merger.”

The merged Priority Advisory Group will have four divisions: Personal and Family Wealth, Aged Care, Life Risk Insurance and Workplace Financial Advice.

Gareth Hall, founder and Chief Executive of Wise Planners, which includes Lifestyle Financial Services, will take up the position of Head of Workplace Financial Advice, reflecting the group’s reputation as one of Australia’s leading providers of workplace financial advice.

Several major industry superannuation funds currently refer members seeking personal financial advice to Lifestyle Financial Services.

“This transaction will deliver immediate scale benefits and increase our capability and capacity to serve our clients by expanding the breadth and depth of our advice and service proposition,” Hall said.

Paul Barrett, Chief Executive Officer of AZ NGA said the strategic partnership bought together two complementary, high quality businesses to build a compelling proposition for employees, clients and shareholders, in line with AZ NGA’s Future Firm philosophy and strategy.

“There is an increasing realisation that running a highly efficient, profitable advice firm requires meaningful scale because scale enables businesses to drive cost savings, spread fixed and variable costs over a larger number of clients, and increase profit margins,” Barrett said.

“For the firms inside AZ NGA that are keen to pursue a Future Firm strategy, we are supporting them to strengthen their businesses for the future and provide opportunities for their staff, advisers and clients.”

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Paul Barrett

Wise Planners, trading as Lifestyle Financial Services, has announced that it has acquired the client book of AFM Advisers Pty Ltd. AFM was the business owned by the late Haydon Skudder who sadly passed away on June 3.

Wise Planners CEO, Gareth Hall, had known Haydon for many years. According to Gareth “Haydon Skudder was passionate about his business, so passionate he worked until he was almost 93 years old. It is an honour for me to continue his legacy by working with the AFM team and their clients.”

“Haydon was also well known for his exploits as a world war two Spitfire Pilot having taken hits from enemy fire over Holland surviving to tell the tale. Haydon was a very special man!”

AFM has amassed $284 million of assets under advice over several decades and provides a full suite of financial planning services including workplace superannuation services. The transaction came about as a result of Gareth discussing succession solutions with Haydon and with AFM’s previous Managing Director, Terry Rhodes. According to Gareth “the partnership with AZ NGA has enabled me to offer flexible succession solutions to a number of firms over the past two years. I am able to meet my growth goals while simultaneously solving succession for others and can execute quickly given the AZ NGA skillset.”

Since joining the AZ NGA network in November 2015 Wise Planners has acquired Domane Financial Advisers, the workplace super clients of Principal Edge Financial Services, Northbridge Financial Solutions, Healthy Finances, and now AFM. This acquisition brings Wise Planners total advised funds to $1.8 billion.

AZ NGA CEO Paul Barrett says “Our growth model is backed up by a first class Mergers & Acquisitions capability that we have built in house. When firms are dealing with us they know that we have the capital and the execution capability to get deals done. Gareth has taken his business from $400 million to $1.8 billion in just under two years.”

AZ NGA will complete its 35th transaction this week and has another 6 planned deals before the end of the year including two accounting firms.

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Wise Planners has purchased the Corporate Superannuation Consulting business of Northbridge Financial Solutions.

Wise Planners, one of the AZ Next Generation Advisory group of companies, has announced that it has purchased the Corporate Superannuation Consulting business of Northbridge Financial Solutions. Wise Planners trades as Lifestyle Financial Services, with Gareth Hall being the CEO of both entities.

This transaction follows on from Wise Planners’ purchase of Domane Financial Advisers in August 2016 and the purchase of the Corporate Clients of Principal Edge Financial Services in February 2017. This acquisition increases the funds under advice of the combined Lifestyle Financial Services/Wise Planners group to over $1.4 Billion.

The Northbridge Financial Solutions team will work with Lifestyle for the foreseeable future because, as the Directors of Northbridge say, “we want to do everything we can to ensure our clients are seamlessly transitioned to the Lifestyle service model. The corporate superannuation world has been evolving rapidly and we at Northbridge have been aware that we needed to enhance our services to our clients. Partnering with Lifestyle enables us to do this sooner rather than later, and with a tried and proven technological process. This is going to be a ‘best of both worlds’ solution for our clients”.

When asked about the reasoning behind the acquisition, Hall said “Scale is really important for us. We want to provide the best services possible to Corporates and their staff. Our passion is helping people to understand their super, and get the most they can out of it. For us to be able to afford to constantly innovate and improve the services we offer, in today’s low cost environment, we must increase our scale. We are fortunate to have the resources of the AZ Next Generation Advisory group behind us, which allow us to do this”.

Lifestyle services clients in just about every postcode in Australia.

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Gareth Hall

AZ Next Generation Advisory subsidiary, Wise Planners, yesterday completed a binding sale and purchase agreement to acquire the corporate super clients of Principal Edge Financial Services.

This transaction follows on from Wise Planners’ purchase of Domane Financial Advisers in August 2016 and increases the funds under advice of Wise Planners to over $1 Billion.

Wise Planners trades as Lifestyle Financial Services, with Gareth Hall being the CEO of both entities.

According to Gareth “we feel that the corporate superannuation market continues to present great opportunities, despite the impact of regulatory reform on the sector. We get to have an impact on so many people’s lives; we love working with employers to achieve better financial outcomes for their employees.

“The team at Lifestyle spend a lot of time focussing on the value they add to corporate super members. That starts with the obvious services such as member education, which is provided both electronically and face to face. We often get into deeper territory, such as goals-based financial planning, at the member’s request”.

“Lifestyle is very pleased to be able to grow this side of our business by acquisition and we’re always looking for further opportunities for growth. Our partnership with AZ NGA has allowed us access to capital, and to the know-how to get acquisitions done, quickly.”

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Gareth Hall

The arbitrary transfer of thousands of personal superannuation accounts to MySuper is already underway and members have absolutely no recourse for any investment losses or life insurance lost as a result.

Corporate Super Specialist Alliance (CSSA) Treasurer, Gareth Hall, said part of the MySuper legislation requires ‘flipped members’ – those who were in a corporate superannuation plan but who are now in a personal superannuation plan – to be transitioned to a MySuper fund by 1 July 2017. “However, APRA has told at least one fund that member accounts which are receiving ongoing contributions have to be transitioned to MySuper now.”

Mr Hall said he spoke with one member who had a superannuation balance of $126,000 and $1,672,000 death and total and permanent disability (TPD) insurance. “He was about to go on extended leave overseas and would have missed the opportunity to opt in to retain his account,” Mr Hall said. “If this member had been arbitrarily transitioned into a MySuper fund, his current insurances would have been cancelled.”

When made aware of the issue, Mr Hall said the member was outraged and elected to remain in his current fund. “Imagine the disastrous outcome for his family if the cover had been cancelled and something went wrong. We believe many members are not aware of the problem and consequently are losing millions of dollars in insurance cover, cover which they may never be able to obtain again.”

MySuper legislation provides no recourse if investors lose a benefit as a result of the compulsory move to My Super. “If these ex-corporate superannuation members do not state that they wish to keep their superannuation arrangements as is, they will all be transitioned,” Mr Hall said. “How can any Government legislate the removal of such important benefits from taxpayers, and offer them absolutely no avenue for compensation?”

With a required notice period of three months, at least one large fund manager has been contacting members to alert them to the problem. “They have had huge success in keeping members in existing arrangements, because these members are engaged with their super and know their arrangements are right for them,” Mr Hall said. “It doesn’t make sense that the first people being transitioned into a MySuper arrangement are those who are the most engaged. Our gravest concern is what will happen to members who are not engaged. What if they have changed address or are on leave and are not able to be contacted? They will just lose out.”

Mr Hall said before the introduction of MySuper legislation, the Death, TPD and Salary Continuance insurance arrangements of members transferring from an employer plan remained intact within personal accounts, as did the members’ investment selection.

“Despite our having brought this issue to the attention of both the Labor and Liberal Governments on a number of occasions, the recommendations from the Senate Committee do not address the issue, nor do they address the conflicted remuneration dilemma that results from corporate superannuation specialists providing advice to their clients,” Mr Hall said. “There are still flaws in the interaction of the Future of Financial Advice (FoFA) reforms and the MySuper legislation that are causing these problems. They need to be fixed – fast.”

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Employees may have some benefits cut.

Employers may be forced to reduce the benefits they provide for their employees as a result of Stronger Super legislation, as certain super funds change their structure to comply with the new rules.

Gareth Hall, Treasurer of the Corporate Super Specialist Alliance (CSSA) said that the CSSA was aware that certain superannuation funds were in the process of removing the ability for employers to pay administration fees and insurance premiums on behalf of their staff.

“It seems that some funds are using the MySuper compliance rules as an excuse to withdraw their employer sponsored fund offering; simplifying their service to now only deal directly with the individual fund members,” Mr Hall said. “This can have a detrimental effect on employee’s retirement savings.”

The result being that workers, who have previously had their fees paid by their employer, are now paying all these fees themselves, out of their own superannuation monies.

“The changes seem to result from the funds’ interpretation of MySuper guidelines, which insist that MySuper products provide the ‘same offering for all members’,” Mr Hall said.

This is a direct consequence of the Stronger Super regulations that were supposed to provide simplification and a reduction in fees.

“This loss of additional benefits may, in some cases, cost members more than the recent increase in Superannuation Guarantee (SG) payments (from 9% to 9.25%). The lower contribution limits have also slashed the ability of employers to provide more generous contributions for staff.”

Mr Hall said, “These restrictions may force employers who have previously been providing superannuation benefits in excess of the legislated minimums to either stop making these additional payments or to pay them as taxable salary.”

Employers and their employees should be aware of the finer points of the Federal Labor Government’s legislation, including some outcomes which are not necessarily in everyone’s best interest.

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In the CSSA’s response this week to the Interim Report of the Productivity Commission Inquiry into Default Superannuation Funds released late last month, CSSA Treasurer Gareth Hall congratulated the Productivity Commission (the commission) for recognising the need for reform in the default superannuation environment.

“It is excellent that the commission realises that the process for the selection and ongoing assessment of superannuation funds for listing as default funds in modern awards needs to be reformed,” he said.

“The Productivity Commission’s desire is to make the process open, contestable and transparent; as this is not currently the case.”

Mr Hall said that in particular the recommendation that, under any circumstance, employers would be able to choose a fund not listed in an award, is quite a breakthrough.

“We feel it is very important to allow employers to be able to tailor their superannuation offering to suit their employees, as the roles of employees that are employed under a particular award can be very diverse,” he said.

However, Mr Hall said the CSSA is concerned about the onus put onto employers to prove that their employees are no worse off.

“We believe that this requirement of proof needs to be carefully quantified so that an employer is aware that they have met the criteria required at the time a fund is selected,” he said, “as if this is not the case this would provide a significant disincentive for an employer to make a selection outside the funds nominated in an award.”

The commission put forward four options as alternatives to reform the selection process, however the CSSA’s preferred option, Option 1, has been ruled out because the commission believes it may be too confusing for employers.

Option 1 involves each employer choosing a fund from all of those that offer a MySuper or other approved default product.

“If MySuper legislation is passed into law and all default superannuation funds must be MySuper funds, then it is very clear to us that there will be no need to nominate default funds in awards as any MySuper fund would, by design, be suitable as a default fund,” Mr Hall said.

“If Option 1 is ruled out, then the CSSA would suggest that the only other viable option is Option 4.”

The CSSA does not support Option 2, which represents a minimal change, where the industrial parties assess all potential funds and nominate a subset of five to 10 funds to FWA for listing in awards.

Option 3 represents a more significant change to the current industrial process, with decisions being made by a Fair Work Australia (FWA) panel — comprising full-time members and part-time experts — and the selection process being opened up to allow all funds to present their case to FWA to be listed in modern awards.

Option 4 is similar to Option 3, but decisions would be made by a new expert body independent of FWA, with FWA playing a minimal role in administering the decision.

“We do not consider Option 3 as viable, as we do not believe FWA has the specific knowledge and the necessary experience of superannuation to be in the position to make decisions as to which funds should be allowed as default funds in modern awards,” Mr Hall said.

“We understand that FWA has been subject to some significant level of criticism in their handling of recent enquiries. Their impartiality has been brought to question and they have taken a long time to come to a conclusion, which would lead us to question if they have the necessary resources to take on this role.

“It therefore seems logical that a new expert body independent of FWA would be best positioned to make decisions on superannuation in Modern Awards.”

2 August 2012 

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