Bendigo and Adelaide Bank is joining the bank exodus out of the challenged financial advice sector, citing mounting costs as it announced plans to sell its advice business to IOOF in a $3 million deal.
The regional bank on Wednesday said IOOF-owned business, Bridges Financial Services, would pay $3 million in cash for Bendigo’s “book” of financial planning customers and servicing rights. The two businesses will also enter into an agreement under which Bendigo will refer customers seeking advice in its branches to Bridges.
It is latest example of an Australian bank quitting advice, after the sector has faced high costs for compensation and compliance, and the royal commission underlined that hundreds of thousands of people across the industry had been charged for services that were never provided.
Westpac sold its loss-making advice arm last month, costing about 900 jobs, and ANZ Bank, National Australia Bank and Commonwealth Bank have also announced deals or plans to cut their exposure to advice.