"That gives some continuity and certainty for the investors in it and obviously for Kiwibank who refer to it, so they know it, understand it."
Kiwi Wealth is a default KiwiSaver provider. It was reappointed by the Government to be a provider for another seven years last year while Fisher Funds missed out on being reappointed due to its higher fees.
McLachlan said the main reason for the purchase of Kiwi Wealth was not to buy back the default status.
"The attraction for us in this business was not default. The reason we are buying Kiwi Wealth is not because it is a default provider."
He said being a default provider was not a big moneyspinner.
"The value in this business is not in the default side of things. Default has a role - it is a way of acquiring new clients but it is not a big money spinner at all. It would be a very small part of the purchase price."
Kiwi Wealth's KiwiSaver business had around $6.35 billion in funds under management while Fisher had $6.5b.
Together it was worth $13b or closer to $14b now as markets had moved upwards in recent weeks.
He said Kiwi Wealth had around 270,000 clients while it had 250,000. Combined the businesses would have over half a million clients and be the number two KiwiSaver provider - second only to ANZ bank.
McLachlan said it was hugely excited to be such a large player in a financial services market that had traditionally been dominated by overseas-owned businesses.
"To have a homegrown business at number two in a very substantial competitive market we think is fantastic."
But McLachlan said it had made no secret of the fact it had applied to be a default provider last year.
"We wanted to retain the default status. We see value in default. We went through the process. We only missed out because of price, we didn't miss out for any other factor. All of that still stands. We see value in being default but don't think it is the reason we have done this transaction - not even close."
Fisher Funds will have to apply to get ministerial approval to take over the Kiwi Wealth default scheme but the deal is not conditional on this approval.
"We will go through a process with the minister over the coming months and seek to retain that."
The fees on the default scheme would remain the same for the entire contracted seven years, McLachlan said.
As well as KiwiSaver the Kiwi Wealth business includes a private portfolio service which was reasonably substantial, some managed funds and a small superannuation scheme. It also runs a custody business.
McLachlan said it intended to keep the private portfolio business although it may be not in its current form.
"We think their other clients we think we can deliver them even more is the way we look at it. We are looking at different options for them."
He said Fisher had a lot more managed fund options it could offer those investors.
"All in all we are thinking we can do more for clients compared to what they have been enjoying up to now."
Kiwi Group Holdings (KGH) chair Dame Paula Rebstock said the deal was a positive result that would enable the Kiwi Wealth business to grow as a part of the Fisher Funds family and continue to deliver for its customers across New Zealand.
"Kiwi Wealth's more than 270,000 members will be gaining access to Fisher Funds' award-winning advice and active investment team," she said.
KGH is owned by NZ Post, ACC and the New Zealand Superannuation Fund.
Staff losses?
Ahead of the transaction being announced fears had been raised that it would bring mass staff losses at Kiwi Wealth which employs around 200 people.
McLachlan said the way it had approached the transaction was to prioritise clients.
"This is not a pure cost-out exercise. This is about doing more, delivering more to clients."
He said there was some duplication when it came to staffing.
"But we intend to retain a substantial number of the Kiwi Wealth teams and we want to maintain a meaningful presence in Wellington. We have plans to have a national footprint so we do want to retain a good representation in Wellington."
McLachlan said it would know more once it had a chance to really look closely at the business.
"We will go in with our eyes and ears open. We want to know and understand exactly what makes it tick. We are committed to doing that thoroughly but we are not hiding from the fact there is duplication here."
McLachlan said Kiwi Wealth did a lot of things it did not do and it also had to keep a lot of resources in place to deliver on its default services contract.
The OIO approval is expected to take around three months and nothing would change about the businesses in the meantime.
That application would go in over the next couple of days.
The deal would be proportionately funded relative to Fisher's ownership so its ownership structure would not change as a result of the deal.
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