by David Chaplin
Following the deal Tranzact’s share of the merged entity, which will operate as Rutherford Rede Central Partnership, reduced to 34.1%.
Allan Yeo, Tranzact managing director, said the move was consistent with the firm’s strategy of taking only a minority holding in financial advisory businesses.
Last month Tranzact completed a rights offer which raised about A$8 million setting aside A$3 million to buy “strategic stakes” in financial planning practices in Australia and New Zealand.
Yeo said the group was talking to a number of advisory businesses in New Zealand about joining its ‘Partnership for growth’ program.
“I expect we’ll be making similar deals [to the Rutherford Rede purchases] every few weeks for the next six to 12 months,” he said.
In a statement to the ASX Tranzact said the latest merger had three major benefits for the company: the introduction of three new advisers into its ‘Partnership for growth’ model; the diversification of its income over a larger client base and wider geography; and, increased growth opportunities.
Jocelyn Weatherall, principal of another Auckland Rutherford Rede business that was not included in the Tranzact deal, said the network of financial advisers was not affected by the ownership reshuffle.
“Tranzact has funded some of the ownership arrangements within Rutherford Rede but the operation of the group hasn’t altered,” Weatherall said.
She said practices in the group all function as individual businesses but subscribe to the network for compliance and operating standards. The group’s members also all use the Grosvenor investment platform, which Weatherall described as the “technology system” that underpins Rutherford Rede’s portfolio selections.
In September last year Rutherford Rede Northland sold out to the West Australian financial services firm Plan B and was merged with the Tauranga-based outfit Strategic Asset Management.
Plan B is scheduled to list on the ASX this July.
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