Wealth management shines for Tower

Nine months into a two-year recovery strategy, Tower Limited is back in the black having posted a $4.87 million profit for the six months ended September, 2003.

However the company acknowledges having a long way to go with its full year result being a net loss of $132 million mostly attributable to significant changes in accounting policy reported in the first half.

Tower Australiaremains problematic for the New Zealand-based company, but group managing director Keith Taylor describes 2003 as having been a year of reshaping and refocusing for the Australian arm and is confident of a strong 2004 on the back of a rebound in second half investment income of $132.5 million.

In what was a tough year for Tower Australia, the company’s wealth management arm represented a bright spot, posting a $5.6 million profit on the back of solid performances fromBridges,Tower Trust Australia, and Tower Asset Management Australia validating the group’s decision to increase planner numbers by more than 20 to 150.

The Australian wealth management division registered a 10 per cent increase in funds under management to $3.3 billion on net inflows for the year of $109 million.

Tower Australia’s performance was undermined by a $9.9 million loss attributable to restructuring costs and asset write-offs, remedial work relating to regulatory compliance issues and a disappointing second half with respect to lapses and surrenders.

However Taylor says the group is positioned to contribute strongly to Tower’s bottom line in 2004 on the back of stronger distribution relationships, a streamlined product range, improved investment management and a revamped service model.

Tower chairman Olaf O’Duill says the result shows Tower is making progress with initiatives to strengthen the profitability of its insurance and wealth management businesses in Australia and New Zealand.

“Twelve months ago, Tower’s position was a difficult one. Today it has been significantly improved through decisive remedial action,” he says.

“The group is nine months into what we anticipate to be a two-year rebuilding process and to a large extent the net loss for the year reflects tough decisions we’ve taken to put the group on a better footing for the future,” O’Duill says.