Heritage Trustees ended its short stint as a licensed supervisor last week, reducing the NZ population in the sector down to just five.
After securing a rare Financial Markets Conduct Act licence to operate as a supervisor (formely known as corporate trustee) in March 2018, Heritage was snapped up later that year by Australian superannuation administration ‘disruptor’, Sargon.
Rebranded as Sargon NZ last year, Heritage accrued three small supervisor clients – Kernel Wealth, Kōura Wealth and Christian Savings – before the Australian parent collapsed in a heap of bad debt and legal disputes earlier this year.
Inevitably entangled in its parental acrimony, Sargon NZ signaled it was in breach of the [Heritage] licensing conditions in June, falling short of the required $500,000 capital buffer.
In a statement, the Financial Markets Authority (FMA) confirmed it had “cancelled the Supervisor licence of Sargon NZ, following a request from the company. The cancellation is effective today [September 16]”.
Following Sargon’s descent into liquidation, two private equity players, Matthew Kibble and Teddy Wasserman, purchased some of the remaining company assets under the Pacific Infrastructure Partners (PIP) banner.
PIP renamed Sargon as Certes in June, extending the branding to the NZ holding company. However, due to a legal naming conflict PIP cannot operate as Certes, forcing the company – which still uses the Sargon label online – to rethink the rebrand. In the interim, the firm would use PIP as the working title.
The new Australian owners intended to continue the NZ business, a company spokesperson said post the PIP purchase.
But without a FMA supervisor licence Sargon (or PIP) would be reduced to managing its residual personal trustee business only.
Marcus Price, who replaced former chief Phillip Kingston at Sargon this June, said PIP was unable to mount a rescue mission for the NZ business under current circumstances.
“The decision [to exit NZ] is definitely COVID-related,” Price said.
Based in the locked-down Melbourne, he said it has proved impossible to rebuild the NZ business and trust “via Zoom”.
The disruption also stymied PIP’s revised NZ strategy aimed at hooking up with a local partner rather than the original Sargon Australian invasion.
“Our goal is to partner with a NZ company which has the local know-how and we can provide the tech – but [with COVID restrictions] that’s impossible at the moment,” Price said. “We think it’s best to retreat for now.”
However, he said PIP hoped to return to NZ, working with a local firm, in the next 12 to 18 months.
Meanwhile, Price is busy enough trying to stabilise the Australian business from lockdown.
He had yet to physically meet most of the PIP team or clients, in a “very weird” first few months in charge.
According to Price, the business – now focused on supplying Australian trustee, corporate trust and responsible entity services – has lost a few clients in the wake of the Sargon implosion.
“But we have retained many and the core business is still intact,” he said.
For the time-being the Sargon NZ entity still exists with remaining directors Harold Titter and Mel Hewitson on board with the Australian-based Darran Goodger.
Sargon NZ managing director, Edward Russell, resigned from the board in July.
With the exit of Sargon (still listed as Heritage by the FMA), the NZ licensed supervisor market now consists of: the Complectus-owned entities – Guardian Trust and Covenant; Public Trust; Trustees Executors; and, retirement village specialist, Anchorage Trustee Services.
Heritage began life in 1998 as a trustee entity for the infamous NZ financial advice firm, Money Managers.