ClearView pivots to simplified business with wealth exit
ClearView Wealth has shared progress on its exit from financial advice and wealth management as it seeks to become a simplified insurance business.
In its financial results for the six months to 31 December, the firm highlighted it has been conducting a strategic review of its wealth management division.
It has already announced a full exit from financial advice with the sale of its 20 per cent minority stake in Centrepoint Alliance last year to COG Financial Services for $15.2 million.
It is also making “significant progress” on the divestment of the wealth management business. This has included the sale of fund management business ClearView Financial Management to Human Financial in January 2024, and the retirement of ClearView Life Nominees as the trustee of its retirement plan in December 2023.
“The board initiated a strategic review in the wealth management segment to seek out and pursue opportunities to reset and simplify the business with the ambition of retaining its core focus on being a life insurance risk provider. The board is committed to the exit of wealth management business given its lack of scale and limited growth options.
“The completion of these actions clears the way for Clearview to now fully exit the wealth management segment over the coming months (upon terminating two remaining life investment contracts held by Equity Trustees Superannuation as trustee to ClearView Retirement Plan).
“ClearView will then be a simplified and less complex business with a pure focus on life insurance.”
The exit of wealth management also removes a “historical drag on earnings” that it has had on the business.
Instead of wealth management, the firm will now look to increase its share of the life insurance market and explore other potential growth and diversification opportunities. The need for life insurance is underpinned by higher interest rates, population growth and increasing levels of household wealth and debt, it said.
While it has exited financial advice, it pointed out it has a diversified distribution market with over 900 dealer groups comprised of 4,000 advisers and remains well positioned to increase its new business market share.
New business from independent financial advisers was $17.5 million, up from $11.3 million in the first half of 2023, and representing a 10.9 per cent market share. The firm is targeting 12–14 per cent market share by FY26.
“[We are] future-proofing the business to prepare for new regulatory changes and the new cohort of financial advisers that are engaging customers by social media, podcasts and digital tools.
“The overall IFA market has grown over the last three quarters (since Q4 FY23) that has been driven by improving industry dynamics and adviser productivity supported by underlying demand for life insurance products. At the same time, ClearView has increased its share in the IFA market to 10.9 per cent.
“Factors such as regulatory change (the tightening of conduct settings and implementation of education standards), a reduction in adviser numbers, premium rate increases and COVID-19 impacts that previously contributed to a decline in market new business sales appear to have been alleviated.”
AUTHOR
Laura Dew
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