by Niko Kloeten
Speculation is brewing about the impending sale of Tower’s fund management business, including its $900 million KiwiSaver scheme.
BNZ, which recently registered its own scheme, and Fisher Funds are among those touted as possible buyers.
Meanwhile, TSB Bank – which doesn’t have a KiwiSaver scheme - has been reported to be interested in buying Fisher Funds.
Tim Fairbrother, an authorised financial adviser (AFA) for Wairarapa-based Rival Wealth, said his company took a “house view” as to which KiwiSaver providers it recommended and if one of those providers was snapped up it would assess what effect the purchase would have on its recommendation.
“We’d make a blanket communication to our clients saying we’ve made this decision: let’s change or let’s stick with it, and then wait for people to come back to us. We’d send them something to sign off,” he said.
Fairbrother said only clients with balances of more than $50,000 would be consulted individually, he said.
Tower Investments chief executive Sam Stubbs wouldn’t comment on the speculation about his firm, but he said he had been surprised that the expected consolidation in the KiwiSaver market hadn’t happened earlier.
Stubbs said the reason was probably KiwiSaver’s rapid growth, which had taken even fund managers such as Tower by surprise.
If advisers had KiwiSaver remuneration agreements with higher commission levels than those offered by the fund manager taking over the scheme, they would usually stay on the higher pay rate until their contract came up for renewal, Fairbrother said.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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