The MyState Limited (ASX: MYS) share price is rising this morning after announcing that it is selling its financial planning business.
Mystate is a diversified financial services business that has been operating for over 50 years with 135,000 customers. It’s headquartered in Hobart, Tasmania. It offers banking, asset management and trustee services.
What’s Happened At MyState?
MyState has entered into an agreement with Fiducian Group Ltd (ASX: FID) to sell its retail financial planning business in Tasmania.
Fiducian will pay around $3.5 million to buy the MyState financial planning client book which has over $340 million in funds under advice (FUA).
Mystate said it expects this deal to be largely neutral to net profit for MyState in future years. The Tasmanian firm expects the deal to complete before the end of FY19 in the next couple of weeks.
The new owner of the business, Fiducian, is listed on the ASX as a national financial services business with $2.7 billion of funds under advice (FUA) and 40 practices nationally.
MyState Managing Director and CEO Melos Sulicich said: “This is a strategic move for the MyState Group which allows us to simplify our business and invest for growth in the areas where we can have a competitive advantage.
“Through our Tasmanian Perpetual Trustees (TPT) brand, we are building a simplified national and highly scalable wealth management business focussed on managed funds and trustee services.”
Does This Make Sense?
The big banks have been badly burned by the issues raised from the Royal Commission.
Commonwealth Bank of Australia (ASX: CBA) recently announced that it was selling Count Financial to ASX-listed Countplus Ltd (ASX: CUP) for $2.5 million.
I can see why the major financial institutions want to leave the industry because of the negative news and the likely increasing compliance costs. Plus, it won’t be as useful on the revenue side of things either.
It’s probably a wise move by MyState, but I would still rather invest in the reliable shares in the free report below over MyState.
