Morningstar and Praemium have reached an agreement for Morningstar to acquire 100% of Praemium’s operations in the UK, Jersey, Hong Kong and Dubai, for a cash consideration of £35 million, subject to completion adjustments.
Praemium offers proprietary SaaS-based technology and services that allow fee-based advisers to outsource key elements of the advice workflow. The platform is used by nearly 500 independent financial advisers and provides access to investment line-ups to serve end clients.
The end-to-end solution will add to Morningstar’s existing data, fund profiles, portfolio analytics, and investment management capabilities available to advisers.
Morningstar and Praemium said that they will work together to ensure a smooth transition for both customers and employees.
Daniel Needham, president of wealth management solutions for Morningstar said: “Technology is playing a larger role in everyone’s lives and expectations for how companies deploy it are evolving quickly.
“Advisers and the investors we jointly serve are no exception, and Praemium’s digital-first capabilities will allow us to reduce friction, lower costs, provide more choice and improve efficiency for advisers. This gives advisers time back to deliver better advice, empowering investor success.”
Melbourne, Australia-based Praemium Limited previously announced plans to focus its financial and leadership resources in the Australian platform market, and to sell its international business to a growth buyer.
According to Praemium, the transaction “unlocks capital” and is a “strong endorsement of the quality of Praemium’s platform and technology”.
Mark Sanderson, Praemium UK and international managing director, said: “The focus throughout the deal process has been on finding a new owner that is the right fit for us and the right fit for our customers.”
The acquisition comes at a time when wealth management platforms are experiencing significant growth.
According to the Lang Cat, platform assets in the UK alone have doubled in the past five years, exceeding £500 billion, driven by adviser demand for scalability, digitisation and portfolio flexibility.
The transaction remains subject to regulatory approval from the Financial Conduct Authority in the UK and the Jersey Financial Services Commission in Jersey.
Morningstar and Praemium expect to complete the transaction during the second quarter or third quarter of 2022.
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