Beleaguered wealth manager IOOF Holdings is set to acquire Bendigo and Adelaide Bank’s financial planning division in a deal worth an initial $3 million.
IOOF subsidiary Bridges will take ownership of Bendigo FP’s client book and servicing rights, and provide ongoing financial planning services to clients of Bendigo referred to Bridges via an exclusive arrangement.
The transaction, announced on Wednesday, is expected to complete on July 31 with Bendigo expected to add about $1 billion of funds under advice to Bridges.
A further payment will be made to Bendigo on the first anniversary of completion, subject to maintaining an agreed ongoing service client retention rate.
IOOF Acting chief executive Renato Mota said the partnership proved the company remained attractive to advice groups.
“It is testament to our focus on our long-term vision and making advice more accessible to all Australians,” Mr Mota said.
IOOF managing director Christopher Kelaher last week quit the company as it focuses on “restoring trust” amid a shareholder class action and court action by the prudential regulator in the wake of the financial services royal commission.
Shares in IOOF, which had already been mauled at the financial services royal commission, lost more than a third of their value on the day the APRA action was made public in December, bottoming out at $4.60.
IOOF stocks lifted 6.0 cents, or 0.95 per cent, to $6.37 at 1208 AEDT on Wednesday.
Bendigo Bank shares were flat at $9.825 at the same time.