NAB unveils FirstCape in bid to create leading NZ advice entity

NAB announced in an ASX listing on Monday that it will be joining forces with Jarden Wealth and Asset Management Holdings Limited (Jarden Wealth) to merge their New Zealand wealth advice and asset management businesses. The collaboration aims to create a new entity, called FirstCape, with NAB, Jarden Wealth, and Pacific Equity Partners (PEP) as the primary shareholders.

The proposed transaction will bring together NAB’s JBWere New Zealand and BNZ Investment Services Limited businesses, together with Jarden Wealth and Harbour Asset Management to create a "leading advice and asset management business" for clients in New Zealand.

NAB's JBWere currently prides itself on being "a leading wealth manager" that offers tailor-made investment advice to a diverse range of clients.

Under the proposed transaction, NAB and Jarden Wealth will each receive a cash payment along with a retained shareholding of 45 per cent and 20 per cent respectively. PEP will acquire a 35 per cent stake, with its investment used to fund the payments to NAB and Jarden.

“We’re pleased JBWere New Zealand will be part of a leading asset management and wealth advisory business. At the same time, we are committed to continuing to grow our JBWere business in Australia, which is a critical part of NAB’s integrated High Net Worth offering," said NAB executive private wealth and CEO JBWere Michael Saadie.

The new business will have a combined 113 advisers, NZ$29 billion of funds under advice and administration and NZ$15 billion of funds under management, including NZ$5 billion of KiwiSaver funds under management.

According to the ASX listing, the business is poised to cater to a broad spectrum of wealth journeys, encompassing individuals at various stages such as those saving for retirement, first-time home buyers, high-net-worth individuals, institutional clients, and not-for-profit organizations.

CEO JBWere New Zealand, Craig Patrick said: “This is an exciting opportunity to grow the JBWere New Zealand advisory business and provide JBWere New Zealand advisers a wide range of advice tools to continue to offer a high-quality advice proposition to our clients”.

This development follows closely on the heels of NAB's recent announcement that it will carefully evaluate the Australian government's proposal to usher banks back into advice with the creation of a new class of advisers - qualified advisers.

As previously reported by ifa, NAB has been the only big bank to directly address Michelle Levy’s Quality of Advice Review recommendation, which pushed for the banks to return, with Ross McEwan, the bank’s CEO, telling the House standing committee on economics in July that the change in legislation would have to be “dramatic” to “convince” the bank to “go back into that market”.

“We’re out of that space,” Mr McEwan said.

“It would have to be quite a change in legislation to twist my arm to go back into it.”

However, in a statement provided to ifa on Monday, a spokesperson for the bank hinted that NAB would be assessing its position in due course.

"NAB is still working through the details of the government’s financial advice reform package,” the spokesperson said.

“Financial advice is a critical service to Australians and it’s important the industry is set up for success.

“We will take the time to assess how the proposed changes may be reflected in the modified advice model we currently provide”.