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Newpark plots new future, tells advisers to make a choice

Newpark is seeking investments from “strategic shareholders” as it positions itself for its 10-year plan.

Sunday, June 14th 2020, 6:23AM 5 Comments

Bernie McCrea

Chairman Bernie McCrea said it was interested in institutional shareholders who might invest in the business to help it achieve its goals. It was also open to investments from private capital investors who might have money in the bank earning little interest.

“People who have an interest in financial services but are earning zero at the moment and want to diversify … we are an option for them.

“It takes money to run an organisation. We have a 10-year business plan … it all takes money.”

He said seeking investment was a better option than getting into debt.

Newpark has taken a financial advice provider licence. Its founder Darren Gannon, wrote to members and told them that the group was at a “cross road” and members had to choose which direction they would take.

Partners Life, which has had a strong relationship with Newpark, is changing its commission model from the end of this month, and will no longer pay override commissions to dealer groups. This will remove a stream of income for Newpark.

Gannon told members they could join the FAP and hand over liability and responsibility to the group. They could sell some or all of their agency to the group, but continue to work in the business. They could keep their Newpark membership on a fee-for-service basis, or sign an agreement so that Partners Life would still send a portion of their commission to Newpark.

Before taking the new commission deal from Partners Life, they should discuss the options with Newpark, he said. “This isn’t the pay rise you think and comes with criteria that most independent advisers should be uncomfortable with. BE SMART, before signing discuss your options with Newpark so you can make a fully informed decision. Once you commit on this pathway, it may be hard to turn back.”

Gannon wrote that a lot of what Newpark did was taken for granted or forgotten about.

“We know commission deals never last and that commission goes up and down. With regulation around the corner, full disclosure and increased costs for providers means that no-one should be basing their business future solely on commission deals. We have recently seen this from Southern Cross as an example.

“We are committed to our new model and capital raising has already begun. We are confident we will have a market leading independent advisory group, supported by all leading carriers. Our technology is being upgraded and space at our office has been made for our compliance admin. We would be excited to include you. A closer relationship will bring benefits others will not get to enjoy.”

McCrea said many advisers were still weighing up their options. It had yet to sign a deal with anyone to join the FAP but there had been expressions of interest in both directions, he said.

People who were nearer retirement were more likely to find the idea of the Newpark FAP appealing.

They could sell the business but continue to work with clients because they enjoyed being in the industry.

McCrea said it was an exciting time for Newpark.

Tags: Bernie McCrea FAP Newpark

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Comments from our readers

On 12 June 2020 at 9:22 am Tash said:
I can't see how Partners Life's new stance on who should be paid (the FAP) could in any way make 'independent advisers' uncomfortable. Quite the opposite in fact.
Advisers wanting to be fully informed would do well speaking to someone other than Newpark too.
On 17 June 2020 at 11:40 am BayBroker said:
I'm shocked, shocked I tell you - Darren is wanting advisers to sign up to his FAP. I wonder why?

As Tash said above, how would as adviser receiving the commission they earn for a dealer group be "uncomfortable"? Maybe he means it would be uncomfortable for him as he would no longer get it?
On 18 June 2020 at 7:03 pm VWGolf said:
Just my opinion, but this sounds desperately desperate to me..
On 19 June 2020 at 3:06 pm Donald said:
The usual knockers are at it again I see.
Being informed and understanding the options for both Newpark's existing or potential members, or Partners Life is well advised when deciding which path to take.
I remain undecided on which path I will take but at the very least I will be doing everything possible to remain a member of Newpark in some form. From my participation and their support both personally from Darren and to my business from his team has played a significant role in my achieving the goals I have aspired to.
On 22 June 2020 at 9:25 am Tash said:
Hi Donald. Glad Newpark has done so much for you. I'd be sad if that was not the case.
If you choose to become licenced yourself, Partners Life will pay the 'override' to you as I understand it (where the regulation cost falls). If Newpark continues to be so useful to you I assume you would have no drama paying some or all of this 'override' to them for their service.

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