The Commonwealth Bank’s decision to exit its self-employed adviser franchise, “Pathways”, together with its recent sale of Count Financial to CountPlus has prompted speculation about the future of its Financial Wisdom license.
Both Count Financial and the Pathways business were originally part of the Commonwealth Bank’s demerger strategy announced in the second half of last year but which the big banking group put on hold in March, telling the Australian Securities Exchange (ASX) it would be prioritising implementing issues arising out of the Royal Commission.
The bank is now sending a clear message to advisers that it is intention to exit its wealth management and mortgage broking businesses “over time” and that that it will be operating its advice licenses accordingly.
The bank’s strategic decision with respect to “Pathways” represented a significant alteration of strategy on the part of the bank, with Financial Wisdom general manager, Mark Ballantyne last week telling Pathways advisers they would “no longer have the option to transition to Financial Wisdom as previously planned”.
A number of Pathways advisers had looked to joining the Financial Wisdom commensurate upon formally acquiring their client books.
As recently as last month’s decision to sell the Count Financial business to CountPlus, the banking group also informed the Australian Securities Exchange (ASX) that the remaining wealth management businesses contained with its demerged “NewCo” structure were Colonial First State, Financial Wisdom, Aussie Home Loans and the bank’s 16 per cent stake in Mortgage Choice.
“Consistent with the announcement in March 2019, CBA remains committed to the exit of these businesses over time,” it said. “The current focus is on continuing to implement the recommendations from the Royal Commission and ensuring CBA puts things right by its customers.”