Clime Investment Management has entered a strategic partnership to combine its advice business with a leading Australian financial advice group, retaining a significant equity stake and vendor financing role.
- Clime transfers advice operations to practitioner-led entity
- Combined advice business to manage over $2 billion in funds under advice
- Clime retains 10% equity with option to increase to 25%
- Transaction valued at $6.5 million with vendor finance support
- Clime continues investment management focus and brand presence
Strategic Partnership Announcement
Clime Investment Management Limited (ASX:CIW) has announced a binding term sheet for a strategic partnership with an established Australian financial advice group. This move will see Clime transfer its financial advice operations, including the Australian Financial Services Licence (AFSL) and authorised representative network, into a combined advice business expected to oversee more than $2 billion in funds under advice (FUA). The advice business will continue to operate under the Clime Private Wealth brand, maintaining continuity for clients and advisers alike.
Equity Stake and Financial Support
Under the terms of the transaction, Clime will retain a 10% equity interest in the newly combined advice business, with an option to increase its ownership to up to 25% over time. Additionally, Clime will provide vendor finance to support the transaction, aligning its interests as both a strategic shareholder and a long-term partner. This structure underscores Clime’s commitment to the advice business while allowing it to focus more sharply on capital allocation and investment management.
Strategic Rationale and Future Focus
Michael Baragwanath, Managing Director of Clime, emphasised the importance of placing the advice business in the hands of practising financial advisers. He noted that financial advice is a deeply personal profession built on trust and responsibility, and this transaction ensures that the business is practitioner-led. Meanwhile, Clime will continue to provide investment management services, including its Investment Management Account offering, and support the advice business through capital allocation and consulting arrangements.
Transaction Details and Next Steps
The agreed consideration for the transaction is $6.5 million, subject to post-completion adjustments. The deal excludes Clime Private Wealth (QLD), where Clime holds a 50% interest. Completion is expected by 31 March 2026, pending final documentation and customary conditions. Clime has committed to providing further updates as the transaction progresses, signalling a significant strategic shift in its business model.
Bottom Line?
Clime’s move to a practitioner-led advice model while retaining investment management focus marks a pivotal evolution in its growth strategy.
Questions in the middle?
- Who is the undisclosed financial advice group partnering with Clime?
- How will Clime’s reduced direct control impact client experience and adviser autonomy?
- What are the financial implications for Clime’s earnings and capital allocation post-transaction?