Forsyth Barr remains in growth mode despite the recent purchase of the Westpac financial planning arm that catapulted the nationwide firm to top of the NZ investment advice table.
Neil Paviour-Smith, Forsyth Barr managing director, said the business had scope to grow both “organically” and through acquisition to meet burgeoning demand for wealth management advice in NZ.
“We’re not expanding for expansion’s sake,” Paviour-Smith said. “But we have the ability to provide the service, systems and administration to support more advisers.”
He said more advisers were likely to seek institutional homes to absorb the impact of increasing compliance obligations, due to intensify when the Financial Services Legislation Amendment Act licensing regime kicks off next March.
“Most advisers just want to work with clients,” Paviour-Smith said.
As reported here in October, Forsyth Barr purchased the Westpac financial planning arm in a deal that will see 32 staff and about $2 billion transfer from the bank to broker offices across the country on December 11. Just under 20 of the soon-to-be ex-Westpac advice team are client-facing authorised financial advisers (AFAs) with the remainder including investment support and administration staff.
On settlement, Forsyth Barr would have about 180 advisers, Paviour-Smith said, putting the firm above rival brokerage house, Craigs Investment Partners, in the head-count.
Forsyth Barr “true fee-paying” funds under management would rise to about $15 billion including the Westpac money, he said.
Like all NZ wealth management firms of stock-broking origins, Forsyth Barr has several service options ranging from transactional only to high-end private client solutions. The group has picked up only the high-net worth Westpac clients, leaving the bank to service the lower end of its fund book – primarily KiwiSaver members.
In a statement, Westpac NZ head of private wealth management, Katie Christoffersen, said: “We retain strong expertise in offering advice to this group of customers and look forward to focussing our energy on meeting their needs.”
Under an ongoing two-way referral arrangement Westpac will provide banking services to Forsyth Barr clients
“Westpac will also refer wealth management clients to us,” Paviour-Smith said.
He said, for the time being, Forsyth Barr had no plans to change the underlying investments held by the Westpac clients.
“The platforms [used by Westpac clients] will initially stay the same but we will look to align them over time,” Paviour-Smith said.
Forsyth Barr has a small managed funds unit (including the KiwiSaver scheme Summer) but largely invests in direct securities via discretionary investment management services (DIMS) or bespoke portfolios. The business uses MMC Wealth (previously known as Aegis) for some investment administration, easing the transfer of clients from Westpac, which also held funds on the same platform.
Prior to the Forsyth Barr purchase, it is understood Westpac was contemplating a platform change with FNZ in the frame.
And while the two biggest competitors to Forsyth Barr – Craigs and Jarden – have established operations in Australia, Paviour-Smith said the group was unlikely to follow suit.
“Our focus in on NZ,” he said. “We have grown a lot recently and we’re pleased with that growth. But our share of the total investable market in NZ is still relatively small. Our greatest opportunity is to grow here rather than offshore.”
Forsyth Barr has links with several international groups including Citibank (for custody) as well as Ord Minnett, JP Morgan, UBS and Investec.