TPG weighs up options as ING maps out future

ING NZ has proposed, in a discussion paper, four different business models its affiliated and tied financial planning networks may wish to adopt as the industry shapes up for expected regulation in 2006.

Tuesday, November 1st 2005, 2:05AM

by David Chaplin

As well as a shake-up of The Portfolio Group (TPG), a network of over 20 affiliated advisory businesses which use the ING-owned Private Portfolio Service platform, the discussion document urges financial planning groups to consider either moving to a corporate model, a franchise arrangement or some kind of ‘hybrid’ deal.

Written by David Greenslade, principal of Strategi (a consultancy firm advising ING on how to restructure its distribution arrangements to cope with coming legislation of the industry), the latest document follows up on a paper released in August titled ‘Transitioning existing adviser networks to new models’.

Greenslade said the response to the first paper has been encouraging and ING has attracted interest from at least three other planning networks in addition to TPG and its Accrue tied distribution business.

He said ING has recognised no one business model will be acceptable to all the diverse planning networks in New Zealand and is positioning to find a way to maintain some influence with all its affiliated groups in a more regulated environment.

“To be effective and successful, broker-dealer networks need groups of like-minded advisers who are prepared to adhere to mutually agreed standards,” Greenslade said in the latest Strategi paper. “

Consequently, it is likely several networks will initially emerge but over time, these may amalgamate into one or two, in order to obtain improved economies of scale, market recognition and negotiating power.”

ING has scheduled March next year for the launch of the new business models with a “conversion and recruitment” process to follow. TPG principals meet next on November 21 to discuss the latest ING proposals.

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