Investment consulting firm JMIS has created a new company to house its latest purchase, the former Sovereign-owned Select Wealth Management platform.
Select Wealth Management was registered as a company last week with JMIS listed as the sole shareholder.
In a note to clients sent out the previous week, JMIS confirmed it was “in the process of acquiring Sovereign’s Select Wealth Management (Select) service”.
“We believe this is a great complement to our existing investment services,” the JMIS note says.
“… Rest assured that the transfer of Select will in no way impact our current advice or fund management business. The new business stands alone with its own clients, staff and systems.”
JMIS, which has been investment adviser to Select since its inception in 1998, is owned by directors Ross Jewell, Andrew Kelleher and Alan Lee.
As reported last week on Investment News NZ (IN NZ), Sovereign was prompted to sell Select, understood to have accumulated about $600 million in funds under administration, to escape new discretionary investment management services (DIMS) licensing requirements due to be implemented on May 31.
Select is a DIMS giving advisers access to five model portfolios, constructed by JMIS, or the ability to build customised investments from a list of 65 securities and funds approved by the consultancy firm.
According an adviser who uses the Select service, Sovereign sent a letter to its advisory network over a week ago confirming the sale to JMIS.
“Assuming JMIS doesn’t do anything stupid with the adviser agreements, I expect we’ll keep on using Select,” the adviser said.
He said clients would probably have to sign new agreements with JMIS following the handover from Sovereign.
JMIS’s Kelleher told IN NZ the company would supply more detail on the Select purchase soon but it was not an “appropriate time” to comment now.
Sovereign has yet to issue a public statement on the deal.