Tower leaning to alliances

By RICHARD BRADDELL

WELLINGTON - Financial service group Tower expects annual savings of $5 million to $6 million in a head office restructuring that will free its managing director to pursue strategic alliances that could result in equity swaps with suitable partners.

The restructuring will also see Tower lean more heavily on its Australian foot with a fourperson senior executive team split between Wellington and Sydney.

Wellington will remain the domicile of managing director James Boonzaier and chief financial officer Keith Taylor. The Sydney office will be headed by Ken Boag and IT and human resources group general manager Peter Herborn. Mr Boag, currently the head of Tower Life Australia, will take up a newly created position as chief operating executive officer.

Mr Boonzaier said the restructuring would free him to focus on strategy and developments in China.

Strategic alliances could result in equity swaps, most likely at the corporate level, with potential partners who might be in banking, insurance, funds management, or just as easily a major retailer who wanted to get into a financial services distribution alliance.

Mr Boonzaier believes an alliance will be in place within two years.

However, he said the drift of some head office responsibilities to Australia reflected the need to develop Tower's business there which already represented 60 per cent of activities.

Mr Boonzaier said Tower's business was heavily dependent on information technology and marketing expertise and Mr Boag's responsibilities would embrace the group's distribution, marketing and servicing.

Under the restructure, several of Tower's businesses will be amalgamated, with Tower Trust Australia and Tower Trust New Zealand being merged.

Both are under the control of Sydneybased Brenton Wood, who retires in July.

The Australian and New Zealand arms of Tower Asset Management will become one company under the leadership of Paul Bevin, who currently heads the New Zealand operation.

Although Mr Bevin has been given the option of moving to Australia if he chooses, Mr Boonzaier said his current intention was to live in Wellington.

The NZ managed funds and unit trust businesses will also merge with the superannuation and savings businesses, to be headed by Stuart Fish.

Mr Boonzaier said more changes would be announced next week, but he said the restructuring did not reflect a move away from Tower's "fleet of ships" approach of operating through a number of autonomous subsidiaries.

However, there would be fewer and larger ships, and the structure would free his time for strategic initiatives.

"If you look at my schedule, I attend in excess of 70 board meetings a year which is a huge number and I need time to focus on strategy."