Financial planners clean up

IT’S taken about six months of high-level negotiations, in-cluding sizing up 16 potential suitors, but Deutsche Financial Planning has finally found a new home.

While the reports have focused on the $115 million price tag paid by National Australia Bank, it is the affiliates, led by Perth-based Greg Devine who will be beaming the most from Deutsche Bank’s decision to raise the bar on its global private banking business.

It is understood Deutsche Bank is looking to service a new strata of high net worth clients who need about $15 million to start with.

By contrast, the Australian operation tended to consider $250,000 as a minimum investment level, or at least the client was expected to be able to reach that level within a reasonable period.

For that decision, Deutsche Bank has sold the rights to its Australian financial planning operation and about $1.3 billion in funds under management to NAB, which will slot the 18 DFP affiliates into its Godfrey Pembroke business.

Of the $115 million, about $30-$40 million will go to the affiliates, just for the pleasure of moving their business under the Godfrey Pembroke banner. And they will still retain ownership.

If the money is split by funds under management, the Perth office, owned by Mr Devine, will have earned somewhere between $4-$5.5million. WA’s 1700 clients have about $550 million with DFP, against $3.9 billion from 17,000 clients nationally.

Mr Devine refused to be drawn on all this speculation.

“It was mooted there was a retention payment paid to affiliates and that is all I can talk about under contract,” he said.

“Let’s just say we were very happy with the deal.”

Instead, he turned the subject to NAB’s aggressive approach to becoming the major player in Australian financial planning, something which he believes is the right strategic approach and a move that will benefit his clients.

“In all of this the client tends to be overlooked,” Mr Devine said, talking about the media coverage of the sale.

It’s all a familiar theme to the WA-based financial planner, who has spent the better part of three decades in the business affiliated to one group or another.

During that period, his biggest break from affiliation was for about six years, when as national president of the Financial Planning Association, he sold his business to then Bain & Co in 1992.

When Bain was bought a year later by Deutsche Bank, Mr Devine became the financial planning wing’s head of national sales and marketing.

Two years ago, things changed again, and Deutsche sold its financial planning network back to the financial planners who became affiliates.

Mr Devine bought the Perth office, which was the biggest affiliate and was made chief executive of the 18 affiliates.

He now finds himself at the forefront of NAB’s drive into the financial planning market.

NAB now has about 1,500 financial planners Australia-wide.

DFP will slide into the umbrella structure of Godfrey Pembroke which became part of NAB with the purchase of MLC in July last year.

The integration of the two creates a high net worth financial planning business with 175 professionals nationally and over A$ 7.5 billion funds under advice.

“NAB are aggressively wanting to be in this market,” Mr Devine said.

“They intend, over the next few years, on capturing a majority of this market.”

“There will be three to five (major) players left in the market within a few years.”

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