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It has bought a 35% stake in Papamoa-based Lloyds Insurance's renewal commission.
The group said it would help the firm to build on its strong reputation in Waikato and the Bay of Plenty.
Lloyds Insurance specialises in life, health, income protection, trauma and business disability insurance cover for individuals and businesses.
Principal Mike Lloyd will continue to operate the firm, including servicing all clients in the renewals book. But the plan is for him to exit the business at the end of the 2021 financial year.
Kepa will then have first right of refusal over the remainder of the renewals book.
Chief executive Brendon Neal said the alliance, the third in a programme of partnerships between Kepa and its members, would release capital to Lloyd and create a succession pathway.
“Mike and Lloyds Insurance enjoy a strong reputation in the Bay of Plenty and the Waikato for helping individuals and businesses manage risk. Kepa will help Lloyds Insurance build on this legacy by facilitating a succession plan for Mike, while still allowing the company to continue to service the strong demand it enjoys in the region.
“The alliance, and the succession plan, demonstrate how Kepa can use its scale and expertise to provide members with assistance, whatever the stage of their career. Through alliances such as this, Kepa is creating pathways through which existing and new members can gain new opportunities to grow their businesses. They also allow advisers such as Mike to transition from the industry confident that their clients are in safe hands. We have no intention of competing with the Kepa network.”
Lloyd said the alliance with Kepa allowed a staged exit from the industry and would also help Lloyds Insurance prepare for the changes coming with the Financial Services Legislation Amendment Bill now before Parliament.
The bill will see the transfer of regulatory responsibility from individual advisers to licenced Financial Advice Providers. Kepa has developed a programme, Fit4License, to help organisations prepare for the shift.
“I have enjoyed a long-standing working relationship with Kepa and over that time have built trust and confidence in the ideals and values that Kepa stands for. This agreement will allow me to transition from the business and - over the longer term – hand my clients to an organisation I trust.”
In April, Kepa provided capital to the Auckland-based Financial Design Group. This followed on another alliance established between Kepa and the Takapuna-based Mortgage Lab in late 2017.
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Is this the Kepa business that most advisers belong to or the privately held investment business owned by just a few shareholders?
I don’t think the ordinary members of Kepa will get anything from this acquisition, nor be owners?
Can you also confirm or deny that Partners or parties associated with Partners are financing this or other / future purchases?
I’d just like a bit of clarity around this news.