Auckland-based advisory firm JMIS will take control of the approximately $600 million floating in Sovereign’s Select discretionary investment service (DIMS) platform before year’s end, pending regulatory sign-off.
Rebecca Russell, Sovereign head of customer management and product, told Investment News NZ (IN NZ) the legal transfer of the Select funds to JMIS – in a deal revealed this May – required Financial Markets Authority (FMA) approval during the process, which coincided with the launch of the DIMS regime last month.
“We are working closely with JMIS and the FMA to ensure a smooth transition, which we anticipate will be complete by the end of the year,” Russell said.
Andrew Kelleher, JMIS director, said the firm, the investment consultant to Select since its launch in 1998, was “working through the DIMS process”. In the interim, Sovereign would continue to legally manage Select under an exemption granted by the FMA.
In a statement released late last Friday, the ASB-owned Sovereign – primarily a life insurance operation – said its exit from the Select business followed a nine-month review of the licensing implications of the DIMS regime.
Russell also confirmed to IN NZ “the amount of funds administered under Select is around $600 million”.
“Sovereign will not be retaining any interest in Select,” post the sale, she said.
However, Kelleher said JMIS would continue to co-operate with Sovereign – which distributed Select via its network of affiliated advisers – “for the foreseeable future”.
In the Sovereign press release, he said the firm had “identified opportunities for growth” for Select.
Kelleher said JMIS had been “looking for a way to leverage our offerings into the retail space”. Aside from its Select relationship, the investment advisory firm has specialised in the high net worth individual and institutional consulting markets.
JMIS also has a small in-house Australasian equities managed funds offering.
Select provides access to a range of managed funds and securities chosen by JMIS, which investors can buy to taste or via five risk-weighted model portfolios.
While retail funds growth outside of KiwiSaver has been muted, Kelleher said there would always be a market for “best-of-breed” investment solutions.
“Our view of the landscape in New Zealand is that there will always be a niche for premium, non-aligned range of investment solutions,” he said.
Neither JMIS nor Sovereign disclosed the financial terms of the Select handover.