Clearview Wealth is shifting away from the lower end of the life insurance business because it believes Australians in that market simply aren't getting any richer.
Clearview said on Monday it expects to lift full-year underlying net profit by 30-35 per cent, and that its ambition is to target the middle of the life insurance market.
"Real per capita incomes are not increasing," chief executive Simon Swanson said.
"While the GDP is increasing, that's only because of population growth."
Mr Swanson said increased competition, including from the likes of supermarket giants Woolworths and Coles, had also made life harder at the lower end of the life insurance market.
It has also become harder to reach those customers, Mr Swanson added.
"The Do Not Call register gets a higher and higher number of people on it," Mr Swanson said.
"It used to be the higher socio economic demographic on there but now it's just moving its way slowly downmarket as people get sick of being called during dinner."
Shares in the life insurance and financial management firm, which reported an underlying net profit of $20.5 million in 2015, are in a trading halt as the company raises $50 million from existing shareholders via a rights issue.
Clearview will pay off $45.5 million of debt and use the rest to fund growth.
"What we've done is raise the capital and keep the debt facility in place should our growth accelerate to a level beyond what we anticipate," Mr Swanson said.
The one-for-10.2 fully underwritten offer is priced at 85 cents per security, a 10.1 per cent discount to the 94.5 cent share price at the halt.
Private equity firm Crescent Capital Partners will take part in the raising despite looking to sell its 53 per cent stake.
Mr Swanson said Clearview "could easily remain listed" even if Crescent offloads its holding, and said there was nothing unusual about the sale.
"There's three certainties in life," he said.
"Death, taxes and private equity selling."
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