Financial planning-focused group SFGA has signaled its intention to move into the trusteeship market and to become a Registrable Superannuation Entity (RSE) at the same time as continuing to grow its advice footprint.
The company made the announcement at the same time as releasing its first-half results to the Australian Securities Exchange (ASX) revealing a 23 per cent increase in net profit after tax of $19.2 million and net operating revenue of $78.4 million.
The result saw the board declare an interim dividend of 1.40 cents a share.
Commenting on the result, SFGA managing director Tony Fenning said it demonstrated solid momentum in earnings and strong underlying performance, coupled with rising equity markets.
He said the strong operating cash flow position would enable the group to have adequate cover to meet its regulatory and working capital requirements while funding deferred acquisition payments due in the second half.
Fenning said organic growth remained the key focus of SFG. He referenced the group’s third-party offer to boutique dealer groups, noting that since September, last year, 10 Australian Financial Services Licensees with approximately 28 authorised representatives had signed as business-to-business partners.
He said that the new platform badge Acuity Portfolio Services, renovated to target the B2B market, now had $62 million in funds under administration.
The company’s ASX announcement said that as the group sought to further enhance its service offering it was exploring a strategy to take on trusteeship. It had obtained an Investor Directed Portfolio Services (IDPS) licence to exercise its rights as an IDPS operator of the SFGA/Colonial Wrap.
“We have commenced the process of applying for a RSE licence to become trustee of the SFGA/Colonial Wrap superannuation vehicle,” it said. “Subject to regulatory and contractual issues, SFGS has advised Colonial of its intention to become IDPS operator and RSE with effect from the first quarter of 2015.”
Fenning said that organic growth remained the key for SFGA and that the group’s long-standing strategy had been to “pursue and deliver attractive transformational and tuck-in transactions”.
“We continue to look for complementary financial advice businesses or forward-looking advice-oriented accounting practices as potential tuck-ins to explore larger transactions,” he said.