Kepa and NZFSG – providers of financial advice support services – are to merge, subject to Overseas Investment Office and New Zealand Commerce Commission approvals.
The firms say in a joint statement that settlement is expected on 30 October 2020. If all goes to plan, the merger will create a national dealer group with more than 1,600 members, issuing $30 million of life insurance premiums and settling more than $17 billion of mortgages a year.
The merger aggregates Kepa’s network of 400 advisers with the 1,200-plus network of NZFSG and its affiliate Loan Market.
Under the terms of the merger agreement, Kepa’s members will be integrated within the NZFSG-Loan Market dealer network, expanding the network by more than a third to 1,600. Meanwhile all Kepa’s staff will transfer to the merged business.
Kepa’s general insurance arm will remain with Kepa’s holding company Kepa Financial Services (KFS). It is anticipated that these assets will be divested in the coming months and KFS will eventually be wound down.
“The merger will give Kepa members access to industry-leading technology, customer relationship management and regulatory compliance systems and drive operating efficiencies to keep adviser business management costs low,” says a statement issued by the firms.
Kepa Chief Executive Brendon Neal says: “NZFSG, Loan Market and Kepa are New Zealand’s largest life insurance and mortgage adviser dealer groups.
“We will take the best from all three organisations to deliver superior services for the combined membership.
“Kepa members will immediately benefit from access to MyCRM and we’ll be able to add depth to NZFSG’s support services including online and classroom support for adviser qualifications; a learning management system for continuing professional development; advice audits and compliance checks; and many other options to support our members’ businesses.
…Our combined member bases will also give us genuine scale to leverage in terms of optimising coverage…
“Our combined member bases will also give us genuine scale to leverage in terms of optimising coverage in areas such as professional indemnity insurance, which will be critically important in the coming years.”
NZFSG and Loan Market are part of the White Family Group of companies, which also includes Australasia’s largest real estate network, Ray White.
NZFSG Chief Executive Brendon Smith says: “NZFSG, Kepa and Loan Market share a commitment to ensuring financial advisers are well-trained, qualified, resourced and supported by a single, financially strong entity focused on high quality independent advice.
“With the industry facing complex and sweeping regulatory changes, including the delayed introduction of the Financial Services Legislation Amendment Act (FSLAA) and the pending Financial Markets (Conduct of Institutions) Amendment Bill, New Zealand’s independent financial advisers are facing an increasing compliance burden.
“By combining our respective businesses and expertise we can support advisers to navigate these changes with the added benefits of genuine scale.
“Innovative tech is critical to navigating the imminent regulatory changes. NZFSG and Loan Market advisers have benefited through the industry-recognised proprietary client management system MyCRM, which has evolved into a dynamic sales and client management portal that powers every aspect of their operations. Under the partnership, Kepa advisers can benefit from these innovations.”