Thursday 21st March 2019
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First NZ Capital's plans to reclaim its Jarden moniker is part of a 10-year plan to encapsulate an expanding suite of businesses with a greater impact on the capital markets.
The firm is the country's biggest broker, its research house is a key source of information for retail and institutional investors alike, and its investment banking team has led more initial public offerings in the past five years than any of its rivals.
However, it's moving away from simply being an institutional bank and is two-and-a-half years into a 10-year plan to grow the firm and have a broader impact on the capital markets.
That's included the acquisitions of the Direct Broking platform and OMF derivatives last year, the purchase of a half-stake in Pearlfisher Capital and the launch of the Principal Investments fund for private investors.
Chief executive James Lee said the changing shape of financial services creates an opportunity for the firm to bring together the capital markets and help them grow.
Rebranding became an element to unify the group's staff under a single message.
"That's where the Jarden piece came back in. We looked at our values and asked where do they come from and why do we believe the things we do? And they all hark back to how the firm started."
The firm has only operated under the First NZ moniker since 2002 following an employee buy-out from then-owner Credit Suisse, a firm it still has ties with.
It was founded in 1961 by Ron Jarden as RA Jarden & Co, and its alumni is a who's who of New Zealand's business world with names such as White House deputy chief of staff Chris Liddell, the late Lloyd Morrison who founded Infratil, the late investment banker Rob Cameron, Milford Asset Management's Brian Gaynor and former PwC partner and Transparency International NZ chair Suzanne Snively.
Lee said the long lead-in times for legislative changes in the sector make it easier to prepare for those developments, and can sometimes baffle people as to whether something is simply a cyclical shift or structural.
And his firm is preparing for the changes that are coming from the latest iteration of financial advice legislation, the 2021 capital markets review, how the results of Australia's royal commission into its financial services sector drifts across the Tasman, and moves to open banking - to name a few.
"From our perspective, we're looking relatively further out - what are the services our clients will need as the industry changes?" he said.
First NZ's recent acquisitions are getting embedded into the wider group, and Lee said that integration is tracking in line or slightly ahead of expectations. Updating the technology on the firm's existing platform is still a work in progress.
He took heart from the joint Reserve Bank-Financial Markets Authority review into the conduct of New Zealand's banking sector, which indicated the sector was much healthier than the rest of the world and that "most want to do right by their client".
New Zealand's principles-based regulation helps, rather than the prescriptive rules-based systems seen elsewhere, such as the US, he said.
Lee is more forgiving of the NZX than some commentators, who have been quick to criticise the stock market operator for struggling to attract new listings. He points out that the world is in an extended period of low interest rates, making debt cheap for firms and easy to obtain on favourable terms.
"Our advice to NZX and the market: don't rush massive changes, the debt cycle won't last forever."
Venture capital is an area that Lee said has matured a lot in the past three or four years. New Zealand doesn't have the depth of venture capital for early-stage investments as the US, but it has been developing with the evolution of outfits such as the Icehouse and Movac.
Lee said the quality of businesses seeking funding from that sector - of which First NZ Capital does participate - has been good enough to secure what they've sought.
He's also optimistic about the direction where financial literacy is heading, with emerging millennials more engaged with the sector.
"I do think there's been an increase in the desire to learn," Lee said.
He credits online micro-trading platform Sharesies and research platform Shareclarity for playing a positive role there.
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