CBA will retain Count Financial brand
Commonwealth Bank has given a commitment to operate the Count Financial business on a stand-alone basis, under its current brand, if it wins Count shareholder approval for its proposed acquisition of the financial planning business.Count yesterday sent out a scheme booklet to its shareholders setting out the details of the CBA proposal. A scheme meeting will be held on November 25.The independent expert's report, prepared by KPMG Corporate Finance, has concluded that, in the absence of a superior offer, the scheme is fair and reasonable and in the best interests of Count shareholders.The CBA offer of $1.40 cash or $1.40 worth of CBA shares per Count share is actually above the value range of $1.24 to $1.38 a share (on a control basis) determined by KPMG.Count provides financial planning services (such as approved investment lists) to a network of 300 accounting firms. It administers $6.2 billion through several investment platforms, plus $3.6 billion of "other funds". It has $3.4 billion of residential and commercial loans in a loan-broking division and $47.5 million of in-force life insurance premiums.Count has 730 authorised representatives. When combined with the 830 affiliated with Commonwealth Financial Planning, CBA planner numbers will overtake market leader AMP Financial Planning, which has 1479 authorised representatives.What Count gives CBA is access to self-managed superannuation fund trustees. Accountants are the primary source of advice for self-managed super fund trustees. While most parts of the wealth management market have been flat over the past year, self-managed super has continued to grow. According to Australian Taxation Office figures, the number of SMSFs increased 7.7 per cent to 456,472 in the year to June. Assets in SMSFs grew by 12 per cent to $418 billion over the same period.Self-managed fund trustees are big investors in cash and term deposits, with more than 25 per cent of their investment allocations in these assets. Banks are looking for more deposit funding to reduce their exposure to wholesale markets and SMSFs look like a good market.CBA has committed to maintaining Count's "open architecture platform philosophy", which involves sourcing investment services from CBA rivals, including BT and Perpetual.CBA intends to offer retention payments to Count franchisees and to selected employees.Count has several strategic shareholdings, such as a 17.3 per cent stake in the broker Mortgage Choice and 7.3 per cent of DKN Financial Planning. CBA says it will review these holdings.