SYDNEY, AUSTRALIA: WT Financial Group (ASX: WTL) has entered a Sale and Purchase Agreement (SPA) to acquire 100% of the issued capital of financial advice network Millennium3 Financial Services Pty Ltd (M3) from Insignia Financial Limited (ASX: IFL)
The M3 network includes more than 140 wealth and personal risk insurance advisers operating in more than 75 privately-owned practices across the country.
It is one of Australia’s most established networks of financial advice professionals, with its origins tracing back over 30 years.
WTL will pay $2.01 million to acquire M3 on a debt free, cash free basis, with the final purchase price adjusted at Completion to reflect any retained working capital. WTL intends to fund the Acquisition using cash at hand.
The acquisition is highly synergistic and accretive to earnings. Based on its modelling, once fully integrated into its operations, WTL expects the acquisition to contribute more than $50 million of revenue; circa $4.5 million of gross profit; and more than $500k of NPBT to the Group on an annualised basis.
On Completion the M3 network will add circa $5 billion in FuA and more than $150 million of in-force risk insurance premium, bringing WTL FuA to circa $23 billion and in-force premium to circa $470 million.
The acquisition further cements WTL as amongst the very largest financial adviser networks in Australia.
WT Financial Group CEO, Keith Cullen, said: “The acquisition represents a significant opportunity to continue to leverage our robust and scalable infrastructure for the benefit of the advice practices we support.
WT Financial Group presents as an ideal home for M3 advisers – one where we believe they can and will flourish.
We’re delighted at the opportunity to retain M3’s talented frontline support staff and regional managers who we believe will add significant value to our Group.
We’re delighted too that outgoing Millennium3 Financial Services CEO Helen Blackford has agreed to remain for a transition period to support the integration of M3 into WTL’s operational structure”.
IFL currently services the M3 network primarily via a centralised support group in the same manner that WTL supports each of its Sentry, Synchron and Wealth Today cohorts via its Wealth Adviser hub. Further, its policies and processes, and technologies deployed at both a licensee and practice level are also kindred.
As such a relatively seamless transition is anticipated from Completion ensuring minimal disruption for M3 advisers and their clients.
Millennium3 Financial Services advisers will benefit from WTL’s market leading adviser education and training, and access to its innovative consumer education, client recruitment, client retention and digital marketing expertise and assets.
Mr. Cullen added: “The M3 fee structure closely aligns with the structures we operate across our existing cohorts on a net per practice and per adviser basis. Additionally, it includes a variable fee component, aligning our interests in helping practices grow their own revenue and profitability, which is our core focus at a time of unprecedented opportunity for advice professionals and advice network operators alike”.
WTL said it has a strong working relationship with IFL, with WTL advisers and their clients having considerable FuA on IFL investment administration platforms and FuM invested in IFL asset management products, both of which have seen positive funds inflow for the past 12 months.
Additionally, IFL is a cornerstone education partner in WTL’s leading adviser education and training programs, supporting its nationwide professional development days, weekly livestream workshops, its NextGen conference, National Congress, and its Optimum practice development programs.
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