ClearView resets its financial advice business

ClearView financial results dividends NPAT income protection ASX the Australian Securities Exchange

18 July 2019
| By Oksana Patron |
image
image
expand image

ClearView has announced the removal of its financial advice segment from embedded value calculations and will suspend the FY19 dividend, with the intentions to institute a share buyback program, as a part of its broader strategy aimed at refocusing its business in 2H FY19.

The company said in an update on its expected results for FY19 issued to the Australian Securities Exchange (ASX) today that it expected the net impact of assumption and methodology changes of $-3.5m on embedded value, as of 30 June, with embedded value further expected to stand approximately at $671.5m.

Further to that, the firm anticipated underlying net profit after tax (NPAT) to amount to $25.1m, including the $1.8m adverse impact on FY19 result from the change in income protection claims assumptions.

The firm also said that is was “actively considering” a share buyback program, in the light of its current share price, and that this would be subject to market conditions as well as its overall capital management strategy.

“Given the current share price, the board believes that buying back shares is a better use of shareholder capital than dividends. Given this, the board had decided to suspend the FY19 dividend and intends to institute a share buy back program in 1HFY20,” ClearView said in the statement.

ClearView also admitted that FY19 was a difficult year for the entire financial services industry due to the impact of the Royal Commission and progressively difficult emerging economic conditions, which were combined with increasing community focus on prices in a lowering interest rate environment.

On the positive note, the company said it managed to complete its remediation program and refocus its business, with key changes including:

  • Revision of its financial advice business strategy and dealer group pricing model;
  • Termination of certain poor performing life insurance distribution relationships; and
  • Repricing of its life insurance and wealth management products.
Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 hour ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 6 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 4 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 7 hours ago