The board of Premium Wealth Management is recommending to shareholders that they consider the terms of acquisition with Australian Unity.
Australian Unity said its desire is to retain the Premium brand strategy, operating model and client proposition.
Commenting on the potential acquisition, Australian Unity Personal Financial Services CEO Mr Steve Davis said the addition of Premium would increase Australian Unity’s financial advice capability and its exposure in the accountants’ space.
“It should also better position Australian Unity Personal Financial Services to take advantage of opportunities arising from the significant regulatory and environmental changes impacting the profession,” he said.
Mr Davis added: “Premium is a successful business, with a high quality group of advisers that has substantial revenue, funds under advice and clients, and will be a significant contributor to increasing the scale and strength of Australian Unity Personal Financial Services.
"Importantly, it will be business as usual for Premium’s authorised representatives and clients," he said.
Premium Wealth Management chairman and founder, Mr Simon Wu, said his board is attracted to Australian Unity for many reasons, including their long term involvement in the accountants’ market and that they clearly see the value of Premium and recognise the quality of their practices.
“Also, Australian Unity is culturally and philosophically aligned with us. They are a well respected 174 year old mutual and they have always prioritised client best interest and advisory integrity, and have an open architecture environment for investments and insurances,” Mr Wu said.
Mr Paul Harding-Davis, CEO of Premium, said FoFA was a catalyst for Premium to explore other options.
“FoFA effectively closed down many organic growth options, and it became clear we would need to either engage in mergers and acquisitions of our own, or invite a like-minded organisation to partner with us, to enable us to compete in a predominately vertically integrated world.
“In the end, we think the option of engaging with a culturally aligned entity to acquire us makes sense and will, we believe, deliver the most benefits to each shareholder and practice,” he said.
The acquisition requires approval by Premium shareholders and the Australian Unity board, and is subject to due diligence by Australian Unity Personal Financial Services.
The acquisition, should it proceed, is expected to take effect in October 2014.
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