MLC and Vanguard Announce Plans to Enhance Plum Financial Services - 08 April 2003
As Plum Financial Services (Plum), a leading corporate superannuation provider, approaches its 5year-milestone, joint venture partners MLC Limited (MLC) and Vanguard Investments Australia Ltd (Vanguard), today announced that they have signed a Letter of Intent which proposes to accelerate the development and growth of Plum. MLC & Vanguard are planning to reach formal agreement by June 2003. On completion, Plum will broaden the employee benefits solutions offered to its corporate clients and members.
It is proposed that MLC acquire full ownership of Plum and invest $10m over the next 2 years to enable Plum to accelerate the development of its services. It is also proposed that Vanguard will remain MLC's partner in Plum continuing to provide expertise to localise its latest intellectual property and research from the US. Vanguard would also benefit from a broader strategic alliance with MLC whereby Vanguard Index Funds would be distributed through other MLC investment offerings.
"Plum has grown at over 70% p.a during the last 3 years. We now have over 63,000 members and more than $2.7 billion in funds under administration. This is an exciting proposal that will allow Plum to strengthen the depth and breadth of services and ensure we maintain our leadership position in the market," explained Ms Jane Cutler, Managing Director and CEO of Plum Financial Services.
Vanguard and MLC plan to invest substantial technical capability in Plum which, coupled with MLC's additional investment, will allow Plum to accelerate the development of its existing services. This would include further enhancements to member education and advice, web delivery and more competitive investment offerings. In addition, enhanced employee benefits solutions would be offered to its corporate clients and members including complementary services such as financial advice, discounted home loans and salary packaging.
"Vanguard has been delighted with our relationship with MLC and the success of the Plum joint venture. From start up five years ago, Plum has become a premier superannuation provider to large corporate clients with a reputation for innovation and member education. This proposal provides the foundation for the next phase of Plum's growth. Our equity participation in Plum will end but Vanguard remains an active and committed alliance partner in the business. We will continue to work with Plum and MLC to enhance Plum's service offering and capitalise on the current opportunity to accelerate its growth. A practical example of this is that we currently have one of our education and advice experts from the US seconded to Plum for six months and we expect this type of arrangement to continue," said Mr Jeremy Duffield, Managing Director Vanguard Investments Australia Ltd.
MLC has enjoyed a successful relationship with Vanguard over the past 15 years including the last 5 years as joint venture partners in Plum and will continue the relationship by expanding the distribution of Vanguard's Index Funds through other MLC investment offerings. "MLC is excited about Plum's next phase of business growth. Under this proposal Plum's offering will be even more attractive to Corporations seeking outsource solutions. Corporate clients will benefit from a more complete and integrated suite of outsource solutions from Plum. We expect very little change to the way Plum is managed and we look forward to an even stronger partnership with Vanguard," said Mr Martin Crawford, CEO of MLC Corporate Solutions.
For further information:
MLC
Samantha Evans
Ph: 02 9957 8731
Mobile: 0418 143 103
Plum
Georgie Slade
Ph: 03 9222 4500
Mobile: 0438 565 774
Vanguard
Jeremy Duffield
Ph: 03 9928 3705
National Wealth Management and MLC
A division of the National Group, Wealth Management manages and operates a diverse portfolio of financial services businesses. Through partnership with a range of financial advisers, it provides quality financial planning services and wealth creation (investments, financial planning, private banking), wealth protection (insurance), and wealth succession (superannuation) solutions to retail and corporate customers, as well as portfolio implementation systems and business coaching services to financial advisers. Its adviser network includes more than 1,500 aligned and salaried advisers, along with a range of external advisers who choose to partner with Wealth Management.
Wealth Management, which includes MLC, is differentiated by its unique "manager of managers" investment approach and multi-channel distribution and advice capabilities. Wealth Management's financial solutions are provided under both the National and MLC brands, including its investment platforms, MLC MasterKey and FlexiPlan.
Wealth Management has more than 2.8 million customers across Australia, Great Britain and Ireland, Hong Kong, Thailand, Indonesia, and New Zealand, and manages more than $64 billion on behalf of retail and corporate customers.
Vanguard Investments Australia
The Vanguard Group is one of the largest fund managers in the world. They are the leading provider of 401k solutions in the US retirement savings market with over AUD$924billion under management. The Vanguard Group has a reputation as a global leader in member investment choice superannuation programs.
Vanguard's investment management business in Australia remains the group's core business in the region. It has experienced extremely strong growth and now manages over $AUD16 billion in a wide range of index portfolios. The Plum strategic alliance has been, and will continue to be, an important component of its business strategy.