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Advisers stand behind Openwork as Zurich eyes exit

Sam Brodbeck and Tom Selby

Openwork member firms say they are prepared for Zurich to sell its 25 per cent stake in the network and may consider upping their own share as a result.

Last week, Money Marketing revealed that insurance giant Zurich is exploring offloading its share of the business.

The insurer has appointed investment banking advisory firm Evercore to explore exit opportunities as senior management look to rid the company of any liability risk associated with the business.

Sources say the move has been sparked by a shift in strategic focus for Zurich.

One source close to the situation told Money Marketing: “Zurich is exploring exit opportunities for the Openwork business. It is clear it doesn’t want the regulatory burden of owning an advice network.

“They are focusing on building up general insurance with the acquisition of RSA.

“Owning an advisory business is also open to regulatory scrutiny and that is something Zurich does not want to remain exposed to.”

Openwork is 67.5 per cent owned by member firms and 7.5 per cent by an Openwork employees trust, with the remainder held by Zurich.

But member firms say a sale would not come as a shock.

Coast to Coast Financial Services practice principal Tony Butler says: “It is something we’ve been preparing for for a while. As a member we own part of the business and we have plans in place for a sale.

“It doesn’t worry me that Zurich wants to concentrate on other areas. There is always going to be a need for financial advisers whether it’s done with Zurich or not. Zurich are only part of our panel now, so if it wants to sell its products it has to be very competitive.”

Appletree Financial Solutions practice manager Nicky Gallagher says: “We don’t know what they plan to do with the 25 per cent stake so it’s hard to say how it will affect us right now. But I don’t think it changes our relationship with Openwork. We have thought about buying a bigger stake and perhaps that could be offered but at this stage we don’t know if that will be an option.”

Oakhill Partnership partner Peter Lofthouse says: “I don’t think it’s necessarily a bad thing if the implication of this is we have to stand on our own two feet. It won’t make us reconsider being part of Openwork. We are very happy with Openwork since joining three years ago.

“Our last network was becoming less business orientated – they became too scared to do business because of regulation – so it was refreshing to come to Openwork and we’re quite content there.”

Last year Openwork delivered operating profits of £5.5m, a 230 per cent increase on the 2013 figure of £1.7m. Omnis Investments, the fund range launched by Openwork in partnership with Octopus Investments in February last year, attracted nearly £1bn of new investments during 2014, taking total assets past the £2.5bn mark.

Last month, the network announced a “radical restructure” following an in-depth review which will see the business split into wealth, mortgage and protection divisions, each headed by a director.

In November last year Openwork took control of MetLife’s network of 930 protection advisers, taking the total number of advisers to around 3,000.

Zurich and Openwork declined to comment. Evercore could not be reached for comment.

In numbers:

25 per cent

Size of the stake Zurich currently holds in Openwork

67.5 per cent

Share of the network owned by member firms


Operating profit delivered by Openwork last year



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