Commonwealth Bank of Australia (CBA) has entered into an agreement to sell off one of its key financial planning and advice businesses – Count Financial – for $2.5 million, to a company formerly owned by the business.
Count Financial, acquired by CBA in 2011 for $373 million, will be sold to Australian Securities Exchange-listed accounting and advice firm network CountPlus, a former subsidiary of Count Financial.
The bank said it would continue to manage outstanding customer remediation matters at Count Financial after completion of the transaction and has agreed to provide an indemnity to CountPlus of $200 million to cover all claims made within four years of completion.
CountPlus chief executive Matthew Rowe said: “I value the collaborative approach demonstrated by CBA to ensure that Count Financial clients and member firms land well in a secure home with strong prospects. CountPlus is indeed the ‘natural home’ for Count Financial.”
The bank said that from a financial perspective, the transaction would result in it exiting a business that was estimated to incur a post-tax loss of about $13 million in the current financial year.
It also noted it owned a 35.9 per cent shareholding in CountPlus and confirmed its intention to sell its shareholding over time, following completion of the sale of Count Financial.
Completion of the transaction is expected to occur in October, subject to a CountPlus shareholder vote to be held in August.
In related news, the Australian Securities and Investment Commission (ASIC) announced Commonwealth Financial Planning (CFPL) had complied with the court enforceable undertaking (CEU) entered into with ASIC in April 2018 in relation to CFPL’s fees-for-no-service conduct.
ASIC said it was satisfied with the attestation provided by CFPL and the final independent expert report provided by Ernst & Young, both received by the corporate regulator on 30 May, and confirmed CFPL’s compliance with the obligations under the CEU were now finalised apart from the payment of some remaining refunds due to clients, to be paid by 30 September.