2 Comments 2 Commentsby David Chaplin
In a letter sent to clients, Laurie Mellsop, ASB general manager investments, revealed Aegis was on the block after an extensive review of all parts of the bank's business.
"This review has prompted ASB to explore various options with respect to the Aegis business... including a possible sale of the business as a going concern," Mellsop says.
With $5.4 billion under administration Aegis is New Zealand's largest wrap provider. Aegis' biggest institutional client, Westpac, has been touted as a potential buyer of the platform along with Perpetual Asset Management and rival wrap provider FNZ.
Macquarie Private Wealth, whose chief operating officer, Mark Ryland, recently joined the firm from Aegis where he was general manager, has also been tipped to acquire the platform.
Mike Newton, principal of Auckland-based independent advisory firm Newton Ross, said advisers would be watching the sales process with some concern.
Newton, whose firm uses Aegis, said while ASB allowed Aegis to operate as an independent wrap, "depending on the purchaser's intent" a new owner could limit product choice on the platform.
"If the Aegis changed [to reduce products on the platform] that could affect adviser's business models," he said.
However, Christchurch-based adviser Andrew Nuttall said a change of ownership for the platform shouldn't affect business.
"Aegis has a good bunch of people and if the staff don't change, the service should stay the same," Nuttall said.
Mellsop told clients that Aegis's head of business development Peter Dine and acting general manager, Wendy Chandler, would be helping ASB through the sales process.
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This sale indicates that the entity is either not profitable, or that there is likely to be events that will make the entity's profit questionable.
My prediction is that technology will provide a meaningful alternative to these platforms, at zero cost. Hopefully intermediaries haven't come to rely on platforms (and their ease of revenue collection) too much.