Wednesday 17th of November 2004

For the first time in more than a decade a long-held dream of the funds management and advisory community has finally looked like it may actually become a reality.
The dream has been that investors in managed funds are treated from a tax perspective at their own marginal tax rates, as opposed to been taxed - often at a higher rate - in a fund.
A report released today, which was penned by former BT Funds Management chief executive Craig Stobo, on the taxation of managed funds proposes (as Good Returns has been saying for a number of weeks) that foreign funds be taxed under a form of RFRM and local funds will be treated like bank deposits.
The upshot of this is that managed funds will be pretty much on par with other forms of investment.
Investors will be responsible for their own tax - rather than leaving it to fund managers.
In a funny way this is a Labour government telling its citizens to take responsibility for their own affairs - sure an oxymoron?
To me the report, which Finance Minister Michael Cullen seems warm on, achieves what organisations that preceded the ISI (the IFA and UTANZ) have fought for. It reminds me of people like Mark Pickering. Mark was a senior manager at Westpac and one of the people behind the formation of the ISI. He fought for this cause for years and has now left the industry.
I spoke to Craig this afternoon and he is clearly very pleased with the outcome and his contribution saying it is something he failed to achieve during his long tenure at BT and as a member of the ISI.
Although the story of his sudden and unexpected departure from BT has never been told, we may one day thank Westpac for its actions. Without them Craig probably wouldn't have written this report.