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Advisers retained in TOWER NZ sale

ASX-listed TOWER NZ has reached a deal with Kiwi fund manager Fisher Funds for the sale of its investment business, but will keep control of its advisory business.

In a statement to the Australian Securities Exchange (ASX) today, TOWER said the NZ$79 million acquisition is part of a strategic refocusing. 

“The decision to sell TOWER Investments was made as a result of a comprehensive strategic review of what is best for TOWER and for TOWER’s shareholders,” said group managing director Rob Flannagan.

“The TOWER board has made the strategic decision to narrow [the company’s] focus,” he added. “The focus going forward will be on growing our traditional core insurance business.”

However, despite the stated re-focusing on insurance services, a TOWER spokesperson told ifa that the company will retain control of TOWER Financial Advisory Services, its in-house financial planning unit.

The company declined to comment on the status of its extended independent adviser network under the new deal, offering only that “TOWER Investments has been sold as a stand-alone business with employees transferring across to Fisher Funds,” as indicated in the ASX statement.

It further declined to comment on the number of Australian financial advisers that might be affected.

The sale of TOWER’s investment arm follows the acquisition of its health insurance business by nib holdings in 2012, which reportedly resulted in a $120 million capital return for TOWER investors.

In 2006, the Australian and New Zealand entities of TOWER separated, six years after acquiring Bridges Financial Services Group and AXA Health New Zealand.