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Zurich to offer advisers shares in multi-tie firm

Zurich is to offer advisers a 75 per cent share in a new multi-tie business that it hopes to float or sell for 300m in three years time.

The new franchise-based business – which will not carry the Zurich name – will aim to be within 10 per cent of the cheapest providers in all product areasThe as yet unnamed business will launch with a 2,000 strong salesforce in the second quarter of 2005 when Zurich will back it at a value of £50m until either a trade sale or flotation in three years, which it estimates will net £300m. The operation is planned to be 75 per cent owned by its advisers with a view to becoming completely independent after three years.

The business will absorb the Zurich Advisory Network, which currently comprises just under 3,000 salesmen, as well as external appointments which are ongoing. It will be headed by chief executive Stephen Leaman with ZAN sales director Andy Ferns taking a similar role in the new entity.

Advisers’ stakes in the business will be determined by current turnover and assets under management with bonus shares being dispensed annually based on turnover and persistence of sales. This share entitlement provides a business valuation for each individual adviser, providing them with an exit strategy if they wish.

The business, unlike ZAN, aims to major on pensions through a single-tie and is expanding its range to include stakeholder, drawdown and transfer products. Investments will no longer be single-tied to Threadneedle with the ZAN Sterling platform being expanded to offer funds from 22 external groups.

Protection products will be rebranded Zurich from Allied Dunbar in January and the range broadened with commission of up to 100 per cent on replacement plans.

Mortgages will be whole of market, while Zurich is set to launch group life and a range of general insurance products.

A Zurich spokesman says: “The new company will be positioned as the leading directly authorised multi-tie business in the UK.”


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