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Tower looks to double adviser numbers in next two years

  Tower Investments will be aggressively expanding over the coming two years as it looks to double its advisory services to cope with strong demand for its relatively conservative products.

Wednesday, December 16th 2009, 5:23AM 2 Comments

by Paul McBeth

Tower Investments chief executive Sam Stubbs said the company's "clearly" going to be a Qualifying Financial Entity under the new regulations, and will use this to help it boost its number of financial advisers from 70 to 140 in the next two years. Stubbs expects customers' demand for more conservative products, such as Tower's range, will remain strong, and this has underpinned the company's strategy to aggressively expand its financial advisory services.

"We will be more aggressive, and that's why we want more advisers," Stubbs told Good Returns. "We have a lot more demand for products than our ability to supply them."

Stubbs does not think having QFE status will let advisers avoid the new burdens placed on them by the government's new regulations for the industry, rather it will force companies to keep their customers and happy and maintain the strength of their brand: "Being a QFE doesn't grant confidence."

With the recent knocks to the public's perception of the industry, including the collapse of the finance company sector and the Consumer mystery shopper survey, Stubbs said Tower is well-placed to take advantage of softer risk appetite among investors who are looking for conservative and transparent investments.

"If you don't know how it works, you don't buy it - as a general rule of thumb, if mum doesn't understand it, I'm reluctant to buy it," he said. "We're going to keep it pretty simple."

 

Paul is a staff writer for Good Returns based in Wellington.

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Comments from our readers

On 16 December 2009 at 7:42 am Independent Observer said:
Following Tower's announcement, here's a prediction for industry-sorts to ponder over Christmas:

Consequences of implementing a new Regulatory framework (combined with lasting negative consumer sentiment) will erode opportunities for those financial advisers catering to the mass affluent over the coming years. These consumers will increasingly trend towards being self-drive to avoid higher (more visible) fees in obtaining advice.

High Net Worth consumers (or at least NZ's definition of HNW) will continue to seek out high quality bespoke advice which will likely be charged on an hourly basis. With a few exceptions, this will be a natural domain for the banks to play in.

Those consumers who are unable to pay for robust advice will be offered homogeneous financial solutions - that are designed to gather assets for the institutions that provide them. In other words - the concept of independent financial planning will be abandoned in preference for a 'one-size-fits-all' approach.

For those that were active in the financial services industry in the 80's, this scenario is deja vu - with insurance companies already signaling their readiness to increase the numbers of foot soldiers to capture the unsuspecting...
On 18 December 2009 at 8:15 am paul said:
Quality bespoke advice charged for by the hour a natural domain for banks! I don't think so!! When was the last time that the huge juggernaut banking sales organisation charged you by the hour for something? Sales driven mortgage brokers and fees by transaction does not lead to bespoke financial advice.
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