Sequoia Financial Group has agreed to sell its financial planning arm InterPrac to Conquest Investment Partners for $50,000, following a strategic review that exposed significant challenges and asset write-downs.
- Sale of 100% of InterPrac shares for $50,000 to Conquest Investment Partners
- Sequoia wrote off $4.7 million in intangible assets related to InterPrac
- Potential additional $7.5 million write-down if sale conditions not met
- InterPrac holds $7.5 million in cash and investments at transfer
- New ownership aims to stabilise InterPrac amid adviser losses and regulatory scrutiny
Strategic Divestment Amid Industry Challenges
Sequoia Financial Group Ltd (ASX:SEQ) has announced the sale of its wholly owned subsidiary, InterPrac Financial Planning Pty Ltd, to Conquest Investment Partners Pty Ltd for a nominal sum of $50,000. This move follows a comprehensive strategic review that highlighted mounting structural, regulatory, and commercial challenges undermining InterPrac's long-term viability.
The decision to divest InterPrac comes after Sequoia recognised a $4.7 million write-down of intangible assets, primarily reflecting the erosion of InterPrac’s customer base due to increasing adviser resignations. Should the sale not proceed; pending ASX listing rule considerations and potential shareholder approval; Sequoia has indicated it will further impair InterPrac’s value by approximately $7.5 million, representing the estimated worth of its cash and investment assets.
Financial Position and Sale Terms
At the point of transfer, InterPrac’s balance sheet will include roughly $1.5 million in cash reserves and an investment portfolio valued at about $6 million. The business also maintains a professional indemnity insurance policy with $20 million coverage, which is expected to provide some protection against ongoing remediation claims linked to the failures of the Shield and First Guardian Master Funds.
Under the terms of the sale, InterPrac will continue to receive administrative and compliance support from Acacia Compliance Services Pty Ltd, a Sequoia group member, for at least six months. This transitional services agreement aims to ensure operational continuity as Conquest assumes ownership.
Regulatory and Market Pressures Driving Change
InterPrac has faced a challenging environment over the past six months, including intensified regulatory scrutiny related to the Shield and First Guardian product failures, uncertainty over remediation responsibilities, and the withdrawal of platform services that have accelerated adviser attrition. Despite efforts to engage with stakeholders and advocate for a fair remediation framework, these pressures have pushed InterPrac from profitability into loss-making territory.
Sequoia’s board concluded that fresh ownership under Conquest, led by experienced financial services executive John Pereira, offers the best chance for InterPrac to stabilise and rebuild. Pereira’s team plans to focus on restoring adviser engagement and platform access, which have been critical factors in the business’s recent contraction.
Sequoia’s Refocused Growth Strategy
With the divestment of InterPrac, Sequoia intends to concentrate on its core businesses, including bespoke wealth management for high-net-worth clients, salaried advice operations, legal document services, and superannuation administration. The company also plans to advance its Asia-Pacific expansion strategy and maintain its investment portfolio through Sage Capital Group.
The sale represents a clear pivot away from the increasingly risky Licensee Services division, allowing Sequoia to mitigate ongoing financial and regulatory uncertainties and sharpen its focus on growth opportunities.
Bottom Line?
Sequoia’s exit from InterPrac marks a pivotal shift, but the new owner faces a complex path to restore stability and confidence.
Questions in the middle?
- Will Conquest successfully reverse adviser attrition and regain platform access?
- How will ongoing AFCA complaints and remediation obligations impact InterPrac’s future?
- What conditions will ASX impose regarding shareholder approval and listing rules?