The IOOF Holdings Limited (ASX: IFL) share price has been one of the better performers on the benchmark ASX 200 on Wednesday.
In afternoon trade the embattled financial services company's shares are up 2.5% to $6.46.
Why is the IOOF share price climbing higher today?
This morning IOOF announced that its subsidiary, Bridges Financial Services, has entered into a strategic partnership with Bendigo and Adelaide Bank Ltd (ASX: BEN) in respect to advice servicing rights of Bendigo Financial Planning Ltd's clients.
According to the release, the arrangement will see Bridges Financial Services take ownership of Bendigo Financial Planning's client book and servicing rights. It will also provide ongoing financial planning services to clients of Bendigo and Adelaide Bank via an exclusive referral arrangement.
IOOF will acquire the client book and servicing rights for a cash consideration of $3 million on completion (expected on July 31), plus a further payment payable on the first anniversary of completion, subject to maintaining an agreed ongoing service client retention rate.
IOOF's acting CEO, Renato Mota, appeared to be pleased with the partnership.
He said, "This partnership demonstrates how our diversified service capabilities continue to be attractive to advice groups looking to join a genuinely advice-led wealth manager. It is testament to our focus on our long-term vision and making advice more accessible to all Australians and we are pleased to deepen our partnership with an iconic community centric organisation."
Should you invest?
This appears to be a good deal for both parties and I'm not surprised to see IOOF's share price climb higher today.
However, it's still a little soon for an investment for me and I'd like to see how the company fares over the next 12 months before making a move.
In the meantime, I think Australia and New Zealand Banking Group (ASX: ANZ) would be a great option for investors looking for exposure to the financial sector.
