The Commonwealth Bank of Australia (ASX: CBA) share price will be on watch today after the banking giant confirmed that it is looking to offload another of its financial advice businesses.
This follows its decision to enter into an agreement to sell the Count Financial business to Countplus Ltd (ASX: CUP) for $2.5 million just last week.
What is CBA looking to offload?
According to the AFR, CBA booked staff from its CommSec business in for a town hall-style meeting late on Thursday afternoon to advise them that it is looking into options for its retail financial advice business, CommSec Advisory.
This business provides financial planning and advice to both high net worth clients and self-managed super funds. It is believed to include 12 financial advisers which have about $4 billion to $4.5 billion in assets under advice.
A CBA spokesperson told the news outlet: "As part of our focus on becoming a simpler, better bank, we are currently reviewing a number of options for CommSec's retail financial advice business, CommSec Advisory, including a possible sale."
Adding: "As this process is incomplete, it would be inappropriate for us to comment any further at this time."
Sources have told the AFR that the bank has commenced a tender process and invited three large local wealth management companies to make a pitch for the unit. These three companies are believed to be Ord Minnett, Shaw and Partners, and Morgan Stanley Wealth Management.
The business unit would arguably be a good fit for any of the three, as they are all understood to be looking to take advantage of the exit of CBA, Australia and New Zealand Banking Group (ASX: ANZ), and the rest of the big four banks from the personal advice market.
It is worth noting that this is not the entire CommSec business. CBA is still expected to retain the majority of the business, including the brokerage unit and CommSec Adviser Services unit. The latter unit offers investment services to financial planners, institutions, and accountants.
