[Weekly Wrap] What's left for TOWER?

TOWER and Fidelity Life this week confirmed one of the industry’s best-kept secrets: Fidelity is buying TOWER’s Life business.

Friday, May 10th 2013, 3:17PM

by Susan Edmunds

It’s a move that has been a rumour for so long that we’d actually started to hear counter-rumours that TOWER and Fidelity were only spreading the rumour to put off their competitors.

TOWER says the move will allow it to focus on general insurance. It will have to - that's all it has left. At a recent shareholders’ meeting, there was anger over what shareholders saw as the company being gutted. It’s hard not to see this as another step in that direction. Already, there are comments on our initial story about the deal, asking what value there is left in the business.

But while some shareholders might not be very happy, things are looking bright for those who have been forced out of the TOWER fold.

Four members of TOWER Investments’ equities team are starting up a new funds management business, Castle Point. There was no space for the TOWER equities team in the new Fisher Funds organisation and it’s believed the four have asked former TOWER Investments boss Sam Stubbs to be their chief executive, although he's still serving out a period of "gardening leave".

In other news, the Financial Markets Authority has been given a "good" report card for its first two years in existence, although a former employee says it could do with more resources to allow it to respond to things more quickly.

On the insurance front, the Financial Services Council has produced an optional form for advisers to use with clients who are thinking about replacing their life insurance cover. It's an idea that's been floating around for a while - something similar was drafted in 2010. But the IFA's president, Nigel Tate, says it should be irrelevant to AFAs if they are doing their job properly. Another point worth noting is that it seems to assume all replacement moves are driven by advisers, whereas it seems more likely that the moves are usually client-initiated or driven by a bank - whose tellers presumably won't be touting these forms.

In mortgage news, the Reserve Bank has revealed a bit more about what it is thinking about macroprudential tools, such as LVR restrictions, although it still isn't saying precisely when they would be deployed.

There have been some moves on the people front and we have a new job listing that's worth checking out.

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