Bernie McCrea
Chairman Bernie McCrea said it was interested in institutional shareholders who might invest in the business to help it achieve its goals. It was also open to investments from private capital investors who might have money in the bank earning little interest.
“People who have an interest in financial services but are earning zero at the moment and want to diversify … we are an option for them.
“It takes money to run an organisation. We have a 10-year business plan … it all takes money.”
He said seeking investment was a better option than getting into debt.
Newpark has taken a financial advice provider licence. Its founder Darren Gannon, wrote to members and told them that the group was at a “cross road” and members had to choose which direction they would take.
Partners Life, which has had a strong relationship with Newpark, is changing its commission model from the end of this month, and will no longer pay override commissions to dealer groups. This will remove a stream of income for Newpark.
Gannon told members they could join the FAP and hand over liability and responsibility to the group. They could sell some or all of their agency to the group, but continue to work in the business. They could keep their Newpark membership on a fee-for-service basis, or sign an agreement so that Partners Life would still send a portion of their commission to Newpark.
Before taking the new commission deal from Partners Life, they should discuss the options with Newpark, he said. “This isn’t the pay rise you think and comes with criteria that most independent advisers should be uncomfortable with. BE SMART, before signing discuss your options with Newpark so you can make a fully informed decision. Once you commit on this pathway, it may be hard to turn back.”
Gannon wrote that a lot of what Newpark did was taken for granted or forgotten about.
“We know commission deals never last and that commission goes up and down. With regulation around the corner, full disclosure and increased costs for providers means that no-one should be basing their business future solely on commission deals. We have recently seen this from Southern Cross as an example.
“We are committed to our new model and capital raising has already begun. We are confident we will have a market leading independent advisory group, supported by all leading carriers. Our technology is being upgraded and space at our office has been made for our compliance admin. We would be excited to include you. A closer relationship will bring benefits others will not get to enjoy.”
McCrea said many advisers were still weighing up their options. It had yet to sign a deal with anyone to join the FAP but there had been expressions of interest in both directions, he said.
People who were nearer retirement were more likely to find the idea of the Newpark FAP appealing.
They could sell the business but continue to work with clients because they enjoyed being in the industry.
McCrea said it was an exciting time for Newpark.
