Sharechat Logo

Fisher Funds customers face cheaper fees from Tower Investments tie-up

Tuesday 26th February 2013

Text too small?

Fisher Funds expects its customers to share the benefits of a larger business in the form of cheaper fees, having stitched up a deal to buy insurer Tower's investment business for $79 million.

Managing director Carmel Fisher told a media briefing in Auckland that funds management is a scalable business in that it doesn't take much extra resource to manage bigger funds. Fisher Funds will almost quadruple its funds under management to more than $5 billion, making it the fourth biggest fund manager with 8 percent of the market.

"Economies of scale will allow more efficiency and a better experience for clients, both in terms of cost and service," Fisher said. Any efficiencies the bigger entity can achieve will be passed "on to clients with lower fees."

Taranaki-based TSB is supporting the purchase for an unspecified amount, and will take 26 percent of Fisher Funds, and get two directors on the six-seat board. That will make it Fisher Funds' second biggest shareholder, leap-frogging Wellington-based investment bank Morrison & Co, which didn't participate.

Fisher said it was too early to tell whether there will be any job losses from aligning the back offices of the two firms, and she will be meeting with staff on Thursday.

The acquisition comes as the government reviews the default KiwiSaver schemes, including Tower, with Crown officials keen on aligning fund managers' incentives with long-term returns for investors. TSB's involvement in the acquisition echoes KiwiBank's purchase of Gareth Morgan Investments last year.

TSB chief executive Kevin Murphy said the bank has been looking at ways to increase its KiwiSaver offering and this was the best opportunity.

Tower has been looking to sell its investment business since it completed a strategic review last year as a means to provide value for shareholders, and comes after November's sale of its medical insurance unit to ASX-listed Nib. Tower's scaling back of its business comes as cornerstone shareholder Guinness Peat Group liquidates its portfolio.

"The focus for Tower going forward will be on growing our traditional core insurance business through offering superior products backed by market leading customer services," managing director Rob Flannagan said in a separate statement.

Fisher Funds has the right to use the Tower brand of 12 months from settlement, scheduled for April 2, and will manage Tower's internal funds for five years. Those funds will gradually be rebranded, Fisher said.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report