Friday 16th of July 2010

It’s not a good look when the head of an association representing an industry group has to walk. But Vance Arkinstall probably had little choice in the matter after charges were laid against in his role as a director of failed finance company Dominion. What has been the surprise is that it took a week between the two announcements (charges being laid and resignation) and that the resignation wasn’t immediate I note Chris Lee had a go at directors the other day. Here I agree with him to some degree. There are a number of directors out there with form and just seeing them being involved with a company is a warning sign to investors and advisers. I don’t, for a minute, put Arkinstall into that camp. I never understood why Arkinstall accepted a board position at Dominion Finance (I haven’t asked either). There was always the possibility it could be seen as a conflict of interest. Curiously you could argue that finance companies were the enemy, or at least fiercest competitors, fund managers (whom the ISI represent) faced. It seems to me that Arkinstall has become collateral damage in the finance company fallout. Only time (and a court case) will reveal the full story. Arkinstall’s resignation is a blow for the ISI. It is an association without a lot of profile and one which was in the process of change. Arkinstall was leading that process and had already done at lot at the ISI including getting it more streamlined and functional. During his time he succeeded in getting good engagement with officials, bureaucrats and politicians in Wellington. It’s the sort of stuff we don’t see, but is a critical for the industry when it comes to lobbying for change. I have no doubt Arkinstall has always had the best interests of the industry (including advisers) at heart. The timing of the move couldn’t be worse for the ISI in many ways. It has been in the news quite a bit this year advocating some changes. Readers of Good Returns will see the great debate going on about its “anti-churning” policy around life insurance. Also the ISI has announced that its members were going to introduce a voluntary code of practice and stop remunerating advisers on a commission basis for investment product sales. While the policy was promised sometime ago, details haven’t been revealed – yet. Maybe they will come before July 31 when Arkinstall steps down?