Sydney-based Commonwealth Bank is selling its loss-making advice business, Count Financial, for A$2.5m as banks continue to cut their exposure to the troubled financial planning sector.
The lender will sell the unit to CountPlus Limited, an ASX-listed financial services firm in which it is the largest shareholder, but will still manage customer remediation related to past issues.
CBA will provide a four-year, A$200m indemnity to cover remediation claims, representing a potential A$56m extra on top of a previously disclosed A$144m provision.
This acquisition will take us one step closer toward our vision to become Australia’s leading network of professional accounting and advice firms, aligned through shared values, mutual success and our sense of community"
Count Financial is expected to incur a A$13m loss in the current financial year. The sale includes 359 planners at 160 advice firms with A$8.1bn in funds under advice.
CountPlus managing director and chief executive Matthew Rowe said the strategic acquisition creates a strong professional accounting and financial advisory network aligned by its shared values, mutual success and sense of community.
"The board and executive team at CountPlus are focused on clear strategy for growth, and building a scalable and sustainable, customer-centric professional service network," Rowe said.
"The company is pleased with today's announcement and the directors encourage shareholders to endorse this acquisition at the upcoming extraordinary general meeting.
"This acquisition will take us one step closer toward our vision to become Australia's leading network of professional accounting and advice firms, aligned through shared values, mutual success and our sense of community."
The sale follows Westpac's heavily discounted sale of its financial advice arm to Viridian for a similar sum.