Brokers merge

Dorchester Pacific Limited is merging its sharebroking firm Direct Broking with fellow broker DF Mainland.

"It is clear that the broking industry is suffering from reduced volumes. Rationalisation is critical to the future," Dorchester managing director Brent King says.

He says the deal will mean there is an increased volume of trade through the existing overhead base.

"All future share trading will be through Direct Broking. The DF Mainland business will be a seamless transfer to ensure that existing clients’ services remain uninterrupted as a result of the merger."

DF Mainland Securities managing director Rick Flower says that the decision to merge both broking operations follows negotiations that culminated in the realisation that the most efficient way of moving forward was together.

"There is no doubt that the broking climate is getting tougher in New Zealand, evidenced by the withdrawal of a number of larger international players.

"Combining both broking operations will not only ensure that the expanded Direct Broking business will remain a strong competitor but it will also be better able to cater for the increasing needs of clients," he says.

DF Mainland will continue to focus on its core investment banking business. It is anticipated Direct Broking will have a close relationship with this operation.

"For broking firms to be successful in the future, the industry will need to rationalise and to be able to provide the public with a positive reason to invest. We have previously added a fixed interest division to Direct Broking with well respected operators Chris Lambert and David Speight, joining Direct Broking in March 2001. This division has been very successful for Direct Broking and we anticipate the latest addition to be of similar value," King says.

Staff and systems will be absorbed into Direct’s offices in Auckland and Wellington.