[Weekly Wrap] Fisher buys Tower
The big news this week was Fisher Funds confirming its long-rumoured purchase of Tower's investment business.
Friday, March 1st 2013, 11:39AM
by Niko Kloeten
The deal for $79 million pushes Fisher Funds into the big league in New Zealand's fund management industry, pushing its total funds under management to more than $5 billion and giving it a KiwiSaver pool of about $1.5 billion, about the same as AMP and about half that of the two biggest players, ASB and OnePath. Fisher Funds, which had its eye on Tower's default status, has well and truly broken through the $1 billion mark at which some other New Zealand fund managers have come unstuck, and the addition of Tower's adviser force will help with its KiwiSaver distribution. The involvement of TSB, now a Fisher Funds 26% shareholder, shows that the smaller New Zealand-owned banks also see the importance of having a KiwiSaver presence.
Another fund manager that's going places is Milford Asset Management, which took home the Morningstar Fund Manager of the Year award as well as winning the KiwiSaver section. While the KiwiSaver award has slightly different criteria to the other categories (more focus on customer service), the fact the same managers (Milford, Fisher and OnePath) were nominated for that section and the overall award suggests that getting your KiwiSaver offering right can help your whole business. Milford is an interesting case because it doesn't pay trail commissions, which is unusual for KiwiSaver and limits its appeal to advisers a bit.
This week also saw the FMA outline its focus for this year. The regulator is encouraging industry participants to report dodgy behaviour. The FMA also noted that low interest rates are pushing investors into looking for high yields. Conditions are ripe for opportunists to take advantage of this and it's not surprising the FMA is keeping a close eye on it.
And after a court victory for the government, it looks like the SOE sales will go ahead but advisers aren't jumping for joy. The economics of providing advice on the SOE floats has been questioned but if people do come in looking for advice it is a chance for advisers to offer their other services. However, it's quite likely most people buying shares won't even think of talking to an adviser.
There's been a lot of talk lately about what financial advisers need to do to become a profession and according to the New Zealand Financial Advisers Association (NZFAA) this doesn't require having only one professional body. This is an interesting debate and one example that is often brought up is law, which in New Zealand has two competing (and often feuding) law societies. With such diverse industries and skill sets involved in the broad term "financial advice" it makes sense to have different associations to represent them.
In other news this week, banks are looking to expand in the financial planning business but don't have enough advisers, while the Ross Asset Management debacle has raised questions over the distinction between wholesale and retail investors.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
| « Advisers don't expect sell-off bonanza | Fund managers call for level playing field » |
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