Fidelity sells KiwiSaver and takes stake with buyer

Fidelity Life has confirmed that it has done a deal to sell its KiwiSaver business to Grosvenor Financial Services which will also see it take an ownership stake in the company.

Monday, July 8th 2013, 2:30PM 6 Comments

Under the deal Grosvernor will assume management of the Fidelity KiwiSaver Scheme and will also work with it on other investment related business.

Currently Grosvenor uses Fidelity as its insurance provider.

Terms of the transaction remain confidential. However, as part of the deal, Fidelity Life will take a minority shareholding in Grosvenor.

Once the transaction is complete Grosvenor will manage KiwiSaver assets worth more than $600 million on behalf of nearly 100,000 members.

It will be one of the country’s largest New Zealand-owned and operated KiwiSaver providers – and the seventh largest overall.

“This is about two successful New Zealand owned companies working in a strategic alliance that allows them to focus on what each of them does best,” Grosvenor managing director Allan Yeo says.

“In addition, there is strong synergy between the two companies, both are dedicated and loyal advocates of New Zealand’s thriving independent adviser network.”

“With Grosvenor’s track record and experience in funds management, we believe the combined fund will lead to even more exciting opportunities. We have an unwavering commitment to our advisers and will continue to help members grow their retirement savings through the delivery of effective financial advice,” Yeo says.

“The transaction also puts the combined organisations in a strong position to gain default provider status in the future.”

Fidelity Life chief executive Milton Jennings says the company will continue to work with Grosvenor on investment-related issues while focusing on its core business of providing market-leading risk products.

“This alliance will allow the two companies to share resources – services, products and support – for the benefit of our adviser networks.”

The type, range and costs of funds to existing members will not change as a result of the deal.

A formal agreement between Grosvenor and Fidelity Life is now in place and, subject to usual commercial considerations the transaction is expected to be completed by September 2013.

« Fidelity KiwiSaver sale rumoured

AMP gets approval to combine schemes »

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Comments from our readers

On 9 July 2013 at 6:17 am brownzy said:

A brief glance of the Fidelity KiwiSaver Prospectus shows the guarantee on one of the funds seems to disappear if Fidelity Life is no longer the manager. Surely this is material as NZers have been advised on this offer on the basis of the guarantee fund. Will the Prospectus be withdrawn whilst this is resolved?

On 9 July 2013 at 6:19 am pietro simone said:

A lot of activity in this space. WIll be interesting to see if Dorchester continue with the guarantee fund and continue to use Tyndall. Potentially Tyndall are the big loser from this deal.

On 9 July 2013 at 5:31 pm observor said:

The communication from Fidelity was good and clear to advisers today. If Fidelity are focusing in insurance what happens to the non-KS investment portfolios they manage? Funny how commentators to GR seem to set a high bar and are critical of the likes of Sovvy, Partners and AMP but seem to not ask the hard questions of others such as Fidelity.

On 10 July 2013 at 9:24 pm Collin said:

This is a pity in a way as Fidelity has done well with their Scheme. Overall their fund performance was solid. I think Fidelity had trouble with their advisors achieving a consistent KiwiSaver focus but after all the effort this decision is a bit unfortunate.

On 11 July 2013 at 9:54 am Anon said:

I feel it is short sighted of Fidelity to sell their KiwiSaver book - short term gain, long term loss of a considerable growth market. Was the sale needed for cash flow purposes re the Tower Life purchase?

On 12 July 2013 at 6:28 pm Anon said:

What is interesting about this is that Fidelity have just purchased an aligned field force (albeit small).

These advisers hold investments now with Fisher.

So where is the focus for the future placement of business, or indeed retention of business.

The knitting might well be insurance for Fidelity. The question - is Fisher the knitting for advisers?

Certainly retaining an ownership stake by Fidelity must throw this into question.

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