Australian listed firm Plan B says pending court action against its former New Zealand partner and slow progress on regulatory changes has not put it off the New Zealand market.
The financial advisory group entered the New Zealand market in 2006 by taking a 25 per cent stake in Kiwi
business Strategic Asset Management.
Later that year it bought the rest of the business for A$3.65 million ($4.64 million).
But on May 20 it will head to court over a dispute with Alex Fowler, the former owner of Strategic, whom Plan B claim contacted former clients despite signing a contract between them to say he would not.
Plan B founder Bryan Taylor, who spent time in New Zealand last week, said he originally invested in Fowler's company because the two were friends.
Plan B also wanted to take advantage of the market once new regulations were passed governing the role of financial advisers. Six years later that legislation is still in progress and Plan B has yet to reach the expansion levels it had hoped to.
In its accounts for the six months to December 2008 it wrote down $377,000 in impairment in goodwill for the New Zealand business.
Plan B has 20,000 clients in Australia but its New Zealand operations are small.
Taylor is determined the business will stay and says it is making money. "We are not pulling back," he said.
Taylor said the business model relied on two factors; a reasonable understanding of investment by the ordinary person and good structural boundaries for the industry.
"Unfortunately it has taken longer than we expected."
Minimum standards for financial advisers are expected to be introduced by the second half of next year.
"We just need an honest playing field. How can we compete when people are offering 10 to 12 per cent and those same people are able to say this is safe and this is good?
"The client can't tell the difference between my person and the bank's. My company is at a serious disadvantage."
