Firstly it is clear that investors like life insurance businesses. AMP is sold; OnePath sold very a hefty price tag to Cigna and AIA acquired Sovereign. Then of course you think about the past year where both Fidelity Life and Partners Life had received significant capital injections.
AMP has been around for a long time and has arguably done many good things. Looking back over recent history the biggest event was the acquisition of AXA. The view is that this was almost a byproduct of the deal done in Australia at the time.
Every now and then this crops up in conversation and the view is that it hasn't been particularly successful. Looking back through Good Returns I came across this Key Facts brochure.
When the groups combined their KiwiSaver market share was 18%, now AMP has around 10% market share in this market.
On the life insurance front it sat at 20% but figures sourced by Good Returns suggest its market share now sits around the 14% mark.
The two groups, combined, had 665 advisers. Now the numbers are: "250 in our QFE, 45 in AdviceFirst and many hundreds of distribution agreements with brokers."
Clearly 1 + 1 did not = 3.
While there is demand for life insurance businesses, one could speculate finding a buyer for the wealth business was not particularly successful hence the decision to list it on the sharemarket.
This one is interesting as it's important to note that the actual fund manager, AMP Capital, is not part of this deal. Indeed we are not clear what's happening here and hope to find an answer for you!
WIN A CHOCOLATE FISH
Besides AMP one story which has engaged readers this week has been about the idea that professional bodies should be setting CPD requirements under the new adviser regulations.
It's one of those pieces I recommend you read, especially the comments.
If you want to win the competition put up by Murray Weatherston, here are the details:
Two part quiz
Is anyone prepared to guess
(1) how many NZ Certificates in Financial Services (Level 5 ) [Qual 2315] have been awarded; and
(2) of them, how many included the Financial Advice Strand.
To take part you need to add your answer to the comments on the article.
I'm really interested to see the answers.
With CPD the TMM Better Business Conference for mortgage advisers is on in Auckland next week. Angus Dale-Jones is presenting on the Code and it's your chance to learn more and ask questions. Details here
I've noted before that the new financial adviser laws and Code of Conduct are going to shake up the dealer groups. This week Newpark announced its ideas around a new mortgage adviser group. Some would say there is no room for another player here, but they don't think so.
The offering is something different and interesting. Besides the pricing it's a clear play at using mortgages to sell more life insurance. It's no coincidence that the new group is being headed up by a former Sovereign executive and Sovereign Home Loans' business case was that mortgages were a way of getting more life business.
As someone said: "All roads lead to risk".
