Under the agreement, Zurich will divest its shares in Openwork by March 2020, by transferring them to Openwork’s other main shareholder, Openwork Partnership LLP. This represents 600 advice firms and 3,000 advisers.
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.”
“The 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.”
Openwork will continue to distribute Zurich’s product lines in the UK, offering them to its advisers through the network’s best-of-breed panels.
David White, managing director for retail at Zurich UK Life, said: “Today’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 reported it made an operating profit of £5.5m in 2014. This was an increase of more than 230% on the £1.7m profit achieved in 2013.
Mr White said: “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.”