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Lifetime and Camelot join together

Financial adviser groups Lifetime and Camelot have, as reported by Good Returns earlier, agreed to merge creating one of New Zealand’s largest independent financial services companies.

Monday, April 30th 2018, 2:41PM 15 Comments

The businesses will merge with Camelot owning Lifetime. The combined entity will support over 100,000 clients across New Zealand with life and health insurances, mortgage and business lending, and will have in excess of $800 million investment funds under management and in KiwiSaver.

Operating under the “Lifetime” brand, staff from both companies will be co-locating with a combined team totalling 165 people across sixteen offices around the country.

“As well as sharing similar values and high ethical standards”, said Lifetime Chief Executive Jon O’Connor, “the expertise that Lifetime offers in insurance and home lending complements the specialist financial planning and investment services of Camelot.”

“Together our clients will get the benefit of a holistic approach to their financial needs, all under one brand with greater distribution capability than ever before.”

“There are strong synergies that the two businesses bring together,” said Camelot Managing Director Peter Cave.

“With our shared focus on creating greater financial certainty for all our clients, we can further build on the strong foundation each company brings.”

Both Lifetime and Camelot have key strategic partnerships through shareholding that will continue with the newly merged entity, these include Booster, Rothbury and Bayleys.

A new Board of both Lifetime and Camelot Directors will be established, with the current Chair of Camelot, David Whyte, appointed as the new Chairman.

“The Camelot and Lifetime boards share a sense of responsibility around leading the charge in embracing and driving the regulatory change in our industry,” David Whyte said.

Peter Cave will lead the new Lifetime group as the Managing Director, with Jon O’Connor continuing in the Lifetime Executive Leadership team.

With continued growth objectives and a unique market proposition in a rapidly changing regulatory environment, Lifetime will continue its investment in building the adviser team throughout New Zealand.

This is the second significant transaction in less than two years for the Lifetime Group.

In December 2016, Lifetime entered into a successful national strategic partnership with insurance brokerage Rothbury Group Limited including the acquisition of its personal insurance and lending division.

At a glance:

-          The purchase will take Lifetimes group’s adviser numbers to approx. 100 throughout New Zealand and 65 staff, operating from 16 locations.

-          Adviser numbers are expected to grow significantly over the next two years.

-          All staff will be retained.

-          The merged entity will have in excess of $800 million investment funds under management.

Tags: camelot Lifetime

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Comments from our readers

On 1 May 2018 at 11:39 am wills said:
How are the able to claim they are independent when they are owned by booster?

[EDITOR's NOTE: A Companies Office search shows Booster owns 29%]
On 2 May 2018 at 7:57 am mockingbird said:
I have no observation or comment on the quality of advice coming from Lifetime or Camelot, and now via this merger. However, it has made me consider what in fact is the current view around what constitutes 'independent' advice.

"Code Standard 3 as it stands states: An Authorised Financial Adviser must not state or imply that the
Authorised Financial Adviser is independent, or that any financial
adviser services provided are independent, if a reasonable person in
the position of a client would consider that the Authorised Financial
Adviser or the services provided are not independent."

If there is an expectation/reality that advisers of this new merge use mostly Booster funds (a nearly 30% shareholder of the new merge), would a 'reasonable' person not perceive something less than independence?

I would welcome a conversation about the practicalities and realities around 'independence' on GR. How open is the interpretation of a 'reasonable' person and their perceptions.
On 2 May 2018 at 3:00 pm Tash said:
Hi Mockingbird. Very soon, if it doesn't already exist somewhere in law, advisers will be required under the new code to comply with an ethical duty to act with honesty, fairness and integrity.

This includes academic intergrity, by which I mean fairly and honestly selecting solutions for clients based only on objectively identifiable features, benefits and advantages,(and other things of importance and value to the client). What is good for the adviser is irrelevant.

Any adviser who gives advice with anyone other than the client's interests, instructions or practices in mind (a shareholder, employer, dealer group, for example) cannot be acting idependently. Restrictions on independence could be commercial (to benefit a shareholder), contractual (to satisfy a quota or comply with group instructions or rules or as an employee)or simply prejudicial and not objectively fair and honest.

The "I only recommend x' or the 'I don't deal with y' brigade, who really are simply acting without the necessary fairness, honesty and integrity by ignoring or remaining conveniently ignorant about options that might be better for their clients. These people are not independent in a way that benefits clients, in a way that matters to clients.
On 2 May 2018 at 10:46 pm Murray Weatherston said:
Hi Tash
That is a pretty strong ex cathedra statement.
But my kneejerk reaction is that you are dangerously wrong. I doubt that there are many advisers (in any professional discipline) who could meet that super fiduciary duty that you think is either in place or will shortly be in place for financial advisers.
AFA Code has act with integrity in CS1.
The independence CS says effectively unless you receive no remuneration (in a wide sense) from anyone other the client you cannot call yourself independent. It does not ban non-independence as you seem to me to be alleging.
On 3 May 2018 at 8:33 am mockingbird said:
Thanks Tash for contributing to what I consider an overlooked CS … especially surprising given all the recent attention on VIO’s and advisers aligned in one way or another to a product provider.

Thanks too, Murray as I read Tash’s response with some “huh? There is something in law now? I thought CS3 was the only guidance we had on what qualifies as independent advice/adviser.”

However, I took the remainder of Tash’s comments as his/her contribution to the discussion on what SHOULD independence be about … and, agree with Tash’s comments as it should be about serving the client first and foremost, regardless of any commercial or other arrangements the adviser may have in play.

What got me thinking more about advisers and firms using the word ‘independent’ was the headline to the story about the Camelot/Lifetime merger that heralds “ … creating one of New Zealand’s largest independent financial services companies.”

Is this in keeping with the current Code (and I openly plead ignorance as I don’t know whether the CWG is working through a revised CS3)? As I read the published December 2016 Code of Professional Conduct, CS3 goes on to provide interpretation and guidance on what independence is and is not:

The following are examples of circumstances where neither the AFA nor the AFA’s provision of financial adviser services may be described as ‘independent’:

(a) a related person of the AFA, or a related person of the AFA’s employer or principal, is the product provider of a financial product (other than a discretionary investment management service) relevant to the financial adviser service provided;

Has CS3 suffered interpretative creep over the years?

Again … with no disrespect to Booster/Camelot/Lifetime advisers or their adviser services intended but to further this discussion on what constitutes an ability to call oneself or their advice business ‘independent’ …

Is it correct and in the spirit of The Code for this newly merged company to promote itself as ‘independent’ when Booster (a product manufacturer) is a 30% owner of Camelot that also offers advice? Does the reasonable person test along with The Code’s stated example above highlight the non-independent link due to related persons between an adviser and product provider?

As always, happy to be set straight as I am not a lawyer and like most of us, suffer compliance burnout. I am merely an ‘independent’ adviser and ‘pointy head’ CFP that is frustrated to see important terms being somewhat hijacked by larger players to fit their marketing or legislative purposes (besides ‘independent’, ‘financial planner’ comes to mind, another term that is being co-opted inappropriately by the powers that be).
On 3 May 2018 at 10:40 am Tash said:
Murray: I apologise. My comment could have been clearer.

I was responding to Mockingbird's request to start a discussion on independence. I am not advocating or suggesting non-independence is wrong or illegal. What I was trying to do, with little elegance i admit (but spending time commenting on GR does not earn me money) was define 'independence'.

If an adviser is beholden in any way to someone other than their client(even if only to their own unjustifiable prejudice) to sell a particular product or give certain advice, I do not believe they are 'independent' and they should not hold themselves out as 'independent'. To do so would not be acting with integrity and breach the integrity requirement (in my view). It may also be a breach of contract. It may also breach section 33 or 34 not sure which now of the current Financial Advisers Act to act with due care (in a situation where they are promising their client independent advice but in reality not acting with 'independence').

You are welcome to a different opinion. One of us will be proven right but that is still to be determined. I know what side i'd prefer to err on.
On 3 May 2018 at 11:19 am Murray Weatherston said:
@mockingbird
You need to make a distinction between an individual adviser and the firm they work for.
The Code of Professional Conduct for Authorised Financial Advisers applies only to the AFA and not his firm.
It seems to me that it would be difficult for an individual AFA employed by Camelot/Lifetime to say they were independent - they will be caught by CS3.
However to the best of my knowledge, there is no regulation in the MBIE/FMA/Code financial advice space that I can think of that currently has anything to say about independence in the context of a firm.
So I reckon it is entirely possible to have a situation where the adviser can't say they are independent, but the firm that employs him can say they are independent.
mockingbird, I know you will say that is crazy.
On 3 May 2018 at 11:54 am mockingbird said:
Murray ... Yes, it is crazy.

Thanks for highlighting that the code is prescribing conduct for an individual AFA, not a financial entity such as the Booster/Lifetime/Camelot merged company).

Presumably then any large financial entity with a salesforce advising/selling a proprietary in-house product can easily, readily and proactively market to the masses as 'independent' as they are not caught under any legislation or Code of Conduct ... totally free to use whatever word they wish.

Their advisers/salespeople then just keep their heads down and either: a) don't utter the word 'independent' in front of a prospective or existing client (keeping their individual obligation to CS3); or b) if asked, "are you independent like I see in your advertising?" simply skirt around the issue by saying "ah ... ummm ... yes ... XYZ company is independent" (even though THEY as an AFA may not be)? It could be like pleading the 5th??

Seriously? This is all kinds of wrong as any reasonable prospective client walking into a door with a big sign saying XYZ Independent Advice WILL assume by anyone's standard that the adviser in front of them then is independent?
On 4 May 2018 at 7:04 am SonnieBailey said:
At the very least, I believe that stating they're independent is misleading and deceptive conduct, which is against the law.

(For reference: According to the Companies Register, Lifetime Group Limited is 100% owned by Camelot NZ Limited. In relation to Camelot NZ Limited, the largest shareholder (with a 29.06% stake) is Camelot Partnerships Limited. Camelot Partnerships Limited is 100% owned by Booster Financial Services Limited.)

I've made a complaint to the FMA and I encourage others to do the same when they come across issues like this.

https://fma.govt.nz/contact/make-a-complaint/make-a-complaint-online

If we see individuals and companies doing inappropriate things, and we don't take action, to an extent we're complicit and helping to put the industry into disrepute. Sunlight is the best disinfectant.
On 4 May 2018 at 12:10 pm Peter Cave said:
For the record
1. Booster shareholding is 15% of Camelot post merger, the Companies Office registry has yet to be updated.
2. Camelot provides for full disclosure of supplier relationships, inclusive of any conflicts of interest, to all clients as part of standard disclosure requirements.
3. Camelot has no production requirements and/or sales quotas with any product or service supplier.
4. Camelot is a DIMS license holder, with Booster being one supplier of investment administration and management services.
On 10 May 2018 at 8:01 am mockingbird said:
Mr. Cave's list of 'ticks' come from a perspective of 'we aren't breaking any rules' perspective.

It would have been better to see a persuasive tick list from Mr. Cave that persuaded me for one that an adviser under the new merged group (who will by association be assumed 'independent' due to their company's promotional statements) is truly independent from the 'reasonable person' test given related party relationships between product manufacturer and the provision of advice.
On 10 May 2018 at 2:39 pm gavin austin adviser business compliance said:
I think Barry has a point. It’s an article written by a journo who may or may not have created the Headline. Nowhere in the article was it stated that either Peter Cave or the CEO of Lifetime had said the merger had – quote “creating one of New Zealand’s largest independent financial services companies.”

If they had then we should be having a debate about that. As we don’t know if it was their quote then at this point it’s all academic – maybe Susan might like to throw some light on this point.

On 11 May 2018 at 8:10 am The Editor said:
Here is the press release:

Subject Line: Merger creates one of New Zealand's largest independent financial advisories

Text: Two of the country’s fastest growing financial advisory firms, Lifetime Group Limited and Camelot NZ Limited, today announced a merger that would make the combined operation one of New Zealand’s largest independent financial services companies.

From 30 April 2018, the businesses will merge with Camelot owning Lifetime. The combined entity will support over 100,000 clients across New Zealand with life and health insurances, mortgage and business lending, and will have in excess of $800 million investment funds under management and in KiwiSaver.

Operating under the “Lifetime” brand, staff from both companies will be co-locating with a combined team totalling 165 people across sixteen offices around the country.

“As well as sharing similar values and high ethical standards”, said Lifetime Chief Executive Jon O’Connor, “the expertise that Lifetime offers in insurance and home lending complements the specialist financial planning and investment services of Camelot.”

“Together our clients will get the benefit of a holistic approach to their financial needs, all under one brand with greater distribution capability than ever before.”

“There are strong synergies that the two businesses bring together,” said Camelot Managing Director Peter Cave.

“With our shared focus on creating greater financial certainty for all our clients, we can further build on the strong foundation each company brings.”

Both Lifetime and Camelot have key strategic partnerships through shareholding that will continue with the newly merged entity, these include Booster, Rothbury and Bayleys.

A new Board of both Lifetime and Camelot Directors will be established, with the current Chair of Camelot, David Whyte, appointed as the new Chairman.

“The Camelot and Lifetime boards share a sense of responsibility around leading the charge in embracing and driving the regulatory change in our industry,” David Whyte said.

Peter Cave will lead the new Lifetime group as the Managing Director, with Jon O’Connor continuing in the Lifetime Executive Leadership team.

With continued growth objectives and a unique market proposition in a rapidly changing regulatory environment, Lifetime will continue its investment in building the adviser team throughout New Zealand.

This is the second significant transaction in less than two years for the Lifetime Group.

In December 2016, Lifetime entered into a successful national strategic partnership with insurance brokerage Rothbury Group Limited including the acquisition of its personal insurance and lending division.
On 11 May 2018 at 9:54 am mockingbird said:
@The Editor ... thanks for sharing the origin of the article highlighting their decision to use 'independent' in their marketing/promotion.

@gavin austin ... confirmed, thus the debate. An important one for those advisers who purposefully work to a fee-only non-aligned business model. The term is their's to use, and their's alone. Seeing the term used for promotional/marketing purposes rightly irks.
On 11 May 2018 at 10:06 am Barry Read said:
Here is the link to the 1997 article on the subject...History never repeats..

https://www.goodreturns.co.nz/article/882408604/independence-ruling-unenforced.html

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