Two of New Zealand's largest financial planning firms are combining their back office functions in an effort to create greater efficiencies.
New Zealand Financial Planning (NZFP), which has about $260 million of clients' money under management, is going to be using some of the master trust functions of fellow financial planning firm Spicers Financial Services.
Spicers, with $520 million under management, moved to a master trust structure administered by Jacques Martin Hewitt about a year ago.
"We are combining our size to take advantage of economies of scale," Spicers director George Kerr says.
Kerr says the final details of the structure have yet to be worked out, however both firms agreed there was logic in the move.
"At the end of the day this business has economies of scale in investment and administration, but none in advice."
NZFP and Spicers will operate separate advisory operations under their own respective names, however will join forces in back office functions, including funds management.
Part of the unique structure of Spicers master trust is that it uses the funds management services of Kerr's firm Equity Partners as well as other managers.
Kerr says by combining forces the two firms will be able to drive down costs to their clients.
Two of New Zealand's largest financial planning firms are combining their back office functions in an effort to create greater efficiencies.