Insurer and wealth manager AMP (ASX: AMP) has announced that its financial advice arm Genesys Wealth Advisers has acquired four financial planning practices. The four practices purchased were Wealth Plus Solutions, Rancie McLean, Frontier Financial Group and Palmer Financial which together have offices spread across Perth, Adelaide and Melbourne. The purchases represent small, bolt-on acquisitions for Genesys.
With many of the larger umbrella financial planning practices having already been consolidated by larger firms such as AMP, IOOF (ASX: IFL) and SFG Australia (ASX: SFW) it is increasingly likely that smaller individual practices will be targeted as consolidation across the wealth management space continues.
Foolish takeaway
With the long-term outlook for superannuation and other financial products bright it makes sense for investors to have exposure to this sector of the economy. Given the business models of many within the sector, the ability to pay out a high level of earnings is appealing and as investors in Magellan Financial Group (ASX: MFG) have discovered, buying into a financial services business undergoing a major growth spurt can also set a rocket under its share price.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
