Australia's largest advisory group Professional Investment Services (PIS) has confirmed rumours it has snapped up a large part of Melbourne-based Bongiorno Financial Advisers' business.
PIS managing director Grahame Evans told InvestorDaily it had bought the external business arm of 54 authorised representatives for an undisclosed sum.
The planners have $900 million in funds under administration in 35 practices across Melbourne, Queensland, NSW and South Australia.
"[Bongiorno advisers] had to agree to come over. We can't make them come over to us. They've all agreed and are very happy with what we're doing," Evans said.
"We know our cultures are pretty close and that's very important from our perspective."
The groups expect to finalise the deal at the beginning of July.
The advisers will switch from the Bongiorno's licence to PIS and retain their own branding.
Evans told InvestorDaily, Bongiorno's "tapped us on the shoulder" about selling its external advisers as Bongiorno's wanted to focus on its high net worth business.
Bongiorno's still has about 37 salaried planners with around $700 million in funds under advice.
Some Bongiorno advisers recommended Westpoint's managed investment schemes. The failed property group left around 2000 investors more than $200 million out of pocket when it collapsed in February 2006.
"My understanding is they've settled all, or nearly all, the Westpoint cases. Part of our arrangement in taking on the advisers is that we don't take on any liability," Evans said.
Responsibility for a claim remains with the dealer group the planner was with at the time the claim was made, he said.
Bongiorno Financial Advisers managing director Tony Bongiorno said: "Our relationship with PIS has been long standing and the future direction of PIS is strongly aligned with our external advisers.
"To maintain a level or superior service to external advisers it is obvious that it requires economies of scale and this is an excellent and exciting opportunity for our external advisers to be part of a major growth story in the Australian financial services market."
PIS has 1400 advisers, $15 billion funds under advice and 1046 practices.
Bongiorno has 91 advisers, 38 practices and approximately $1.6 billion funds under advice.
