SBS Bank buys advisory firm

Regulatory changes are starting to drive consolidation in the financial advice sector.

Friday, November 5th 2021, 9:02AM

SBS Bank's financial advisory arm, Funds Administration New Zealand (FANZ), has bought Invercargill-based financial planning firm Kepler Southland.

Kepler Southland is branded as Lodestar and is run by Dianne Logan and Annabel Riley.

FANZ executive director Graham Duston says the transaction came about as one of the principals wanted to exit and advice firms need to scale up their operations to meet increasing compliance demands.

Duston says the bank would look to acquire other firms in the future. Earlier this week Mint Asset Management said it was looking to get into the distribution space too.

The addition of Lodestar staff will double the size of the FANZ adviser team in Southland.

Duston says there were significant similarities between the two businesses. "We both share the same investment philosophy, as well the same remuneration model, and the same technology platform.”

Diane Logan said: “By being part of a larger business, we’ll be able to reduce investor costs for our clients from day one. That’s a big plus. For existing Lodestar investment clients, it will be ‘business as usual.’ We’re all moving together – staff and clients. So, continuity of service is assured.”

Duston said the common elements shared by the respective businesses have made the transaction proceed smoothly.

“The integration issues have been minimal due to the common business model aspects shared by both businesses. It’s also been business as usual for clients due to sharing a common custodian platform (FNZ) so there has little disruption for them. All the Lodestar staff have been employed by FANZ and this will result in a much stronger Southland adviser team for FANZ.

"This merger has also provided us with some insights and “must dos and haves” when integrating financial advice business in the current environment.”

Duston said industry consolidation is “on the cards” due to a range of factors such as rising and changing compliance factors and an aging adviser force that was beginning to look at their next stage of life.

FANZ has a total of 21,000 clients nationwide and more than $1.4 billion of funds under management, while Lodestar is a boutique brand with a strong local focus.

Tags: FANZ SBS