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Partners puts off listing

Partners Life has decided to delay its plans to list on the sharemarket.

Thursday, September 3rd 2015, 6:00AM 1 Comment

by Susan Edmunds

It is currently conducting a round of capital raising, which closes at the end of September and aims to raise up to $30 million.

Another round is planned before March next year, when the company's first tranche of shadow shares vest.

Shadow shares were the company's adviser incentive scheme. There are 952,000 due to vest at the end of March, with an exercise price of $2.25. 

Managing director Naomi Ballantyne said the company had been planning an IPO around that time but had decided the market conditions were not right.

"The plan is still to be a listed company but it needs to be when the time is right, not because we need the capital but because of a liquidity event or opportunity."

She was confident the company would still list within the next few years. 

Partners Life reported a $18.4 million profit for the year to March 2015, up from a loss of $2.8 million in the 2014 year.

But Ballantyne said a large part of the turnaround was due to changes in the company's discount rates.

The company paid $108.6 million in commissions and operating expenses, up from $89 million the year before.

Ballantyne has been outspoken through the Financial Advisers Act review process so far, arguing that commission it itself is not a problem for the life insurance industry.

She said commission reforms such as those in Australia would not leave insurers better off because they would have to pick up other costs.

"It's part of the cost of distribution," she said. "We don't do any marketing or lead generation, we don't pay fixed costs, the advisers do. If commissioned dropped we would probably end up having to supplement or pick that up and start advertising and marketing to support advisers."

But she said that could be problematic because companies that paid to promote advisers would not then want them to place business elsewhere.

"It could have a significant effect on the independence of advice. All the companies that deal with independent advisers have a vested interest in making sure they survive."

Tags: Naomi Ballantyne Partners Life

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Comments from our readers

On 3 September 2015 at 3:15 pm Majella said:
Naomi - you're so right, again. Those larger insurers, who have burgeoning market share growth through their aligned channels & direct employees working over-the-counter have no interest in supporting the current commission structure. A serious change to it would see a lot of their competition melt away(much to their delight).
However, if it came to the worst case scenario, I would be prepared to "align" with a company with a great product proposition and accept its support for the costs I would no longer be able to meet.

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