Zurich will divest its shares by March 2020, by transferring them to Openwork’s other main shareholder; Openwork Partnership, which represents the network of around 600 adviser firms and 3,000 advisers.
It is not clear at this stage if Zurich will financially benefit from the transfer of its stake to Openwork Group, as no details regarding payment or value have been disclosed.
The Openwork Group is currently owned, via ordinary shares, by its advisers (67.5%), its employees (7.5%), and the Zurich Insurance Company (25%).
The agreement marks the culmination of the strategy set out by Zurich when Openwork was created in 2005.
Collective ownership
Mark Duckworth, chief executive of Openwork, said: “This agreement marks a major point in Openwork’s development. Advisers can see a clear path, collectively, to owning the network that provides the vital infrastructure behind their own businesses, a benefit which will be available in due course both to existing and new firms that join us.
“This agreement also demonstrates that Openwork has a clear ability to grow and create value, and we look forward to continuing to work closely with Zurich, which has long been an integral part of our proposition.”
Huge strides in profitability
David White, managing director for retail at Zurich UK Life, said: “[Thursday’s] announcement is the culmination of the strategy set out when Openwork was created in 2005 and reflects the huge strides Openwork has made in recent years to become, and remain, profitable.
Openwork achieved operating profit of £5.5m ($7.9m, €7.1m) in 2014, an increase of 230% from £1.7m in 2013.
“The bonds between the two businesses remain very strong and, while Zurich will no longer be a shareholder as a result of this agreement, we will continue to provide our market-leading platform and protection propositions to Openwork’s advisers and their clients,” White said.
