Openwork shareholders secure 30% equity in Zurich deal

Openwork shareholders, two thirds of whom are the network's financial advisers, have voted in favour of a major financial restructuring deal with Zurich which sees them pick up 30% preferential shares in the company.

The deal transfers 30% of the 100% preferential shares in Openwork, which Zurich negotiated in a deal in 2005, to the network's shareholders or 'partners'.

Zurich will remain a 25% ordinary shareholder in the mulit-tied network.

Openwork says the deal will enable its transition to a fee-charging model, including funding the building of a platform which chief executive Martin Davis (pictured) says will begin this year.

He says: "Any firm without access to the funds required will struggle post-RDR. The intention of building the platform is to enable advisers to move to a charging model."

The 30% equity transferred to Openwork's partners in today's deal will also fund tools and services to support advisers through RDR, and support the network's growth plans to ensure its post-RDR future, Davis says.

Openwork advisers will have the choice of operating a single tie model, a multi-panel multi-tie model, or a whole-of-market IFA model post-RDR.

Under the deal, they will have access to Zurich products until 2016.

The terms of the renegotiated deal were agreed in principle this afternoon between Openwork Holdings Limited, Openwork Partnership LLP (which represents about 880 Openwork advisers) and Allied Zurich Holdings Limited (Zurich).

Openwork says the deal will also provide a more "equitable formula"  for shareholders and advisers.

The proposed restructuring will not affect the ownership structure of Openwork's ordinary shares, or the composition of the Openwork board and management, according to the network.

Openwork remains an independent company and will continue to be led by  Davis and the Openwork Board.