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Two Brisbane-based wealth businesses are set to merge to create a multidisciplinary professional services firm, with a growing mortgage broking arm.
Financial planning firms Henderson Matusch Group (HMG) and Logiro have announced a non-cash merger to create a multidisciplinary professional services firm covering wealth advice, mortgage broking, risk insurance, portfolio management and estate planning.
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The two companies are both currently part of professional advisory group AZ Next Generation Advisory (AZ NGA), which owns 73 accounting and advisory firms across Australia and is backed by European financial services company Azimut.
The merged entity will have a total of 42 employees, including three mortgage brokers and 14 financial advisers.
According to the businesses, the move aims to deliver “immediate scale benefits and generate significant synergy opportunities”, as well as an “expanded balance sheet to enable potential future acquisitions”.
HMG chief executive Paul Fog commented that the merger comes amid a tight labour market, stating: “Growth and scale are important but this merger is also about people. It is getting harder and harder to recruit good people, and this deal brings serious talent to HMG,” Mr Fog said.
“It significantly expands our capability and capacity, and positions us strongly to continue meeting the current and future needs of our clients.”
Broking arm expansion
One area that the merged company aims to scale is mortgage broking.
While HMG currently has three mortgage brokers, Mr Fog noted that the merged entity would expand this part of the business – while providing in-house home mortgage broking services to Logiro clients for the first time.
Speaking to The Adviser, the HMG CEO outlined that mortgage broking was a key part of the group’s strategy as it created strong cross-referral opportunities.
Mr Fog told The Adviser: “A client’s home lending needs and broader lifestyle goals are intrinsically linked because, for many Australians, home ownership is integral to their lifetime goals, in particular moving into retirement debt-free.
“In Australia, general awareness of home ownership issues, including lending solutions is high, as many Australians have a mortgage and there’s a lot of press on property and interest rates.
“However, there’s less understanding about the role of a financial planner.
“There are opportunities for brokers to position our broader advice services, resulting in a greater number of quality referrals.
“We are looking to grow our mortgage broking business organically via internal referrals and through referral arrangements with external partners.”
Chris Shiels, Logiro CEO, added that the decision to merge comes as the “compliance burden” of financial advice increases.
“The advice landscape is rapidly changing, requiring advice businesses to change too,” he said.
“While Logiro is largely the same business it was five years ago, the compliance burden is much greater. This deal will free me to spend more time helping my clients, which gives me the most joy and satisfaction. It’ll also allow more time to focus on winning new clients and growing the business.”
Under the arrangement, Logiro would move into HMG’s Brisbane office but continue operating as a separate entity for “a period of time” while integration occurs.
It is expected that the merger could take up to 12 months to complete, with functions of marketing and brand consolidated by the end of the calendar year.
The two companies said they were “committed to ensuring continuity of operations and no adverse impact on staff, productivity and profitability, as part of a formal change management plan”.
AZ NGA CEO Paul Barrett commented that part of AZ NGA’s strategy was to “connect people and help them explore opportunities to grow through mergers, acquisitions and organically”.
“Firms of the future understand the power of mergers and acquisitions to expand a business’ capability and capacity, and turbo charge growth,” he said.
“The most successful mergers are ones where both entities know each other well and share common values and motives.”
[Related: Credit Mediation Service, Choice Debt Solutions join forces]
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