Clime Investment Management partners with advice group in $6.5 million deal
Clime Investment Management has entered a binding term sheet to transfer its financial advice operations to an established Australian advice group in a $6.5 million transaction. Under the Clime Investment Management Advice Partnership, the company will transfer its Australian Financial Services Licence (AFSL) and authorised representative network, forming a combined entity expected to advise on more than $2 billion in funds under advice.
The Clime Private Wealth brand will continue operating following completion. Clime will retain a 10% equity interest in the combined business, with options to increase its stake to 25% over time. Completion is expected by 31 March 2026, subject to final documentation and customary conditions.
The transaction forms part of Clime’s strategic shift toward capital allocation and investment management, while maintaining alignment with practitioner-led advice delivery. The deal excludes Clime Private Wealth (QLD), where Clime holds a 50% interest.
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What is an AFSL transfer and why does it matter?
An Australian Financial Services Licence (AFSL) is the regulatory permit required to provide financial advice and services in Australia. Transferring an AFSL means moving the legal authority to operate an advice business, along with the authorised representatives who provide advice under that licence.
An authorised representative network comprises financial advisers who operate under the AFSL holder’s regulatory umbrella. When Clime transfers its AFSL to the new entity, the advisers and client relationships move with it, but under new majority ownership.
This structure differs significantly from traditional advice business sales. Rather than a full divestment, Clime is partnering with practising advisers who will control the majority of the business, while Clime retains minority equity and provides financial support. This reflects a broader industry trend toward practitioner ownership, where advisers rather than institutional shareholders control advice businesses. The model is positioned to provide better alignment between business ownership and client service delivery.
Transaction structure and Clime’s ongoing stake
The $6.5 million consideration comprises three components designed to maintain Clime’s strategic involvement while transferring operational control:
| Component | Details |
|---|---|
| Equity retained | 10% initial stake |
| Future ownership | Options to increase to 25% |
| Vendor finance | Clime-provided vendor note |
| Consideration | $6.5 million (subject to post-completion adjustments) |
The structure creates alignment between Clime as both shareholder and long-term partner in the advice business’s growth. The company’s ongoing equity position and vendor finance arrangement maintain financial exposure while reducing operational complexity.
Clime will retain its Investment Management Account (IMA) offering and continue to manage certain client portfolios directly where this structure is appropriate. The company expects to provide non-exclusive Separately Managed Account (SMA) and Managed Discretionary Account (MDA) solutions to the new entity. Capital allocation and investment consulting support will be provided under arrangements yet to be finalised.
The transaction explicitly excludes Clime Private Wealth (QLD), where Clime maintains its existing 50% ownership stake. This allows the company to retain strategic exposure in Queensland while restructuring its broader advice operations.
Strategic rationale from management
The transaction reflects Clime’s broader pivot toward capital allocation and investment management, while maintaining practitioner-led delivery of financial advice. Managing Director Michael Baragwanath framed the move as an alignment of business ownership with professional responsibility.
Michael Baragwanath, Managing Director
“Financial advice is where financial products become peace of mind and where investments become aspirations for a better future. It is a deeply personal profession built on trust and responsibility, and in my view the business of advice should ultimately be in the hands of those who practise it. This transaction places Clime Private Wealth in the hands of practitioners while ensuring clients continue to benefit from Clime’s investment capability and capital allocation expertise, supported by our ongoing equity ownership in the business.”
Baragwanath’s philosophy centres on practitioner-led ownership as the optimal structure for advice businesses. The Clime Investment Management Advice Partnership (ASX: CIW) is designed to provide clients with continuity of service and access to Clime’s investment capabilities, while transferring day-to-day operational control to practising advisers.
The retained equity stake and vendor finance arrangement are intended to provide a strong alignment of interests and a stable foundation for clients as the combined business grows, while maintaining strategic and financial alignment between Clime and the new entity.
What Clime retains
The company maintains several key elements of its advice and investment management operations:
- 10% equity stake in the combined advice business, with options to increase to 25% over time
- Investment Management Account (IMA) offering remains wholly owned by Clime
- Direct management of certain client portfolios where this structure is appropriate
- Capital allocation and investment consulting support to the new entity under arrangements to be agreed
- 50% stake in Clime Private Wealth (QLD), which is excluded from this transaction
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Next steps and completion timeline
Completion remains subject to final transaction documentation and customary conditions. The company expects to finalise the transaction by 31 March 2026, subject to satisfying these conditions.
Clime will provide further updates to shareholders as the transaction progresses. The company has confirmed that all material information has been released to the market. While the counterparty’s identity has not been disclosed, the company stated that this information is not expected to have a material effect on the price of its securities and that the description provided is sufficient to assess the counterparty’s standing and creditworthiness.
The near-term completion timeline provides clarity for shareholders assessing Clime’s strategic repositioning toward capital allocation and investment management, while maintaining selective exposure to advice delivery through retained equity and service arrangements.
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