TowerLimited will sell off its personal and corporate trustee business as part of an ongoing restructure of the group which began in December of last year.
The trustee business is housed within one of the group’s business arms,Tower Trust, and Tower Limited says it is investigating whether to sell off or dilute its ownership of the business unit after the group’s board agreed to the decision.
KPMG Corporate Finance has been brought on board by Tower Limited to drive the divestment process which will begin in the next two weeks with an expected final decision and conclusion due by early October.
The other businesses within Tower Trust, the personal superannuation, wrap service and portfolio management services will be retained.
The decision was made after an evaluation carried out with the Boston Consulting Group which concluded that the full ownership of the personal and corporate trustee businesses was not in keeping with the future plans for the group.
Tower group managing director James Boonzaier says the move is consistent with the group’s New Horizon strategy which calls for a stronger place in wealth management in the Australian market and building on its position in the New Zealand market.
Tower says it has already flagged the possible selling of parts of the business when it unveiled the strategy last year by stating it would either consolidate or regroup businesses if needed.
Moves undertaken by Tower so far include the merging of the distribution arms of its life investments and trustee (portfolio management) operations into one group.
The life investments operation covers the risk insurance and managed funds side of the business while trustee operations are concerned with superannuation products.
The group is also forming an Investment Administration Centre (IAC) in Australia and is close to concluding the restructure of New Zealand operations under New Zealand chief executive Jim Minto.
Boonzaier says the divestment was necessary as Tower Limited could no longer serve an increasingly wide financial services market and had to concentrate on providing services in areas which offered the most promise.
“Today’s business environment requires a much greater degree of focus. We can no longer be all things to all people and must try to do a few things well in market sectors which are most attractive in terms of growth and profitability,” Boonzaier says.
The Tower Limited Board also confirmed that the IAC would be based in Sydney and all investment operation based out of Adelaide would move over the next 18 months and as part of the move confirmed once again that it was looking at building a back office platform to administer its master trust and wrap business.
