Tower to offer advisers equity
Tower is to offer its advisers equity in its distribution businesses under a radical shake-up of its distribution operations announced yesterday in New Zealand.
Tower is to offer its advisers equity in its distribution businesses under a radical shake-up of its distribution operations announced yesterday in New Zealand.
According to the Good Returns Web site, group managing director James Boonzaier says that the company will build separate businesses in the distribution area, both in New Zealand and Aus-tralia, and these would be operating by October.
Speaking at the announcement of Tower's half-year results, Boonzaier said the changes were being driven by the advent of the Financial Services Reform Bill (or CLERP 6) in Australia and market forces.
"I think that the new Financial Services Reform Act, to all intents and purposes, will put the small independent intermediaries out of business," Boonzaier said. "(Obtaining) a licence is go-ing to be ferociously expensive in Australia and compliance, too, will mean a pretty rigorous audit process."
Tower is one of a growing list of companies owning financial planning groups to announce eq-uity schemes for its advisers. Mercantile Mutual announced earlier this year its intention to offer advisers equity in both the Adviser Investment Services and Bleakleys businesses similar to that announced by Professional Investment Services.
Boonzaier says Tower’s distribution structure in each country will probably involve a split in the operations. One company will remain wholly owned by Tower with tied advisers and the other one company will be 30 to 40 per cent owned by advisers.
"These independents, all of them will be certified financial planners, you can be sure of that,” he says.
Boonzaier says Tower's current distribution costs are about $50 million.
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