Fairfax Media signs off on $7m deal to sell managed funds website
Fairfax bought InvestSMART six years ago, an online business to provide retail investors with low-cost access to financial information and products.
But after a recent overhaul of rules surrounding financial advice, Fairfax said the sale of InvestSMART to a licensed financial services provider made sense so the business could continue to be developed for the benefit of clients.
The rules, which require licensing of financial advice and quasi-advice products, is expected to see a number of media companies reassess the way they provide these services. Announced in June 2009, the Future of Financial Advice package also compels financial planners to act in their clients' best interests.
Fairfax entered a binding agreement that hinges on completion of a capital raising by AWK to pay for the deal. If the transaction falls over, AWK will pay Fairfax a $150,000 break fee. Under the transaction, Fairfax will continue to promote Fairfax products to InvestSMART's client base.
Shares in Fairfax ended 2.9 per cent higher at 54¢.
Frequently Asked Questions about this Article…
Fairfax Media agreed to sell the managed funds website InvestSMART to Australasian Wealth Investments Ltd (AWK) for $7 million.
Fairfax said the sale made sense after a recent overhaul of rules around financial advice. Selling InvestSMART to a licensed financial services provider allows the business to continue to be developed for the benefit of clients under the new rules.
The Future of Financial Advice package (announced in June 2009) requires licensing of financial advice and quasi‑advice products and compels financial planners to act in clients' best interests. Those changes are prompting media companies to reassess how they provide financial services, which influenced Fairfax's decision to sell InvestSMART.
Yes. Fairfax entered a binding agreement that hinges on AWK completing a capital raising to fund the deal. The transaction depends on that capital raising being successfully completed.
If the transaction falls over, AWK will pay Fairfax a $150,000 break fee.
Under the transaction, Fairfax will continue to promote Fairfax products to InvestSMART's client base, so there will still be a commercial link between the businesses.
Fairfax bought InvestSMART six years earlier as an online business intended to give retail investors low‑cost access to financial information and products.
Shares in Fairfax ended 2.9% higher at 54¢ following the announcement.
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