Friday 18th of April 2008

This week I have been fascinated by the goings on in the advisory industry, and some of  the things that make it look silly. It started with a statement from Commerce Minister Lianne Dalziel that the government was working with the Institute of Chartered Accountants to provide free advice to Blue Chip clients. I say good on both parties for doing this. I wish they could have done it earlier as it seems to me that many are preying on these Blue Chip "victims" and making money from their unfortunate situation. The obvious question the ICANZ/Govt release raised was how come the Institute of Financial Advisers wasn't selected as the partner? I don't know the answer to this question, however its release the following day seemed to suggest they were in catch up mode. But the story hasn't stopped there. None other than Chris Lee has added fuel to this little fire turning it to bonfire status. In yesterday's newsletter he ripped into the minister castigating her for supporting the IFA (when in fact it was the ICANZ she did a deal with). He says "minister Leanne (sic) Dalziel (is) urging investors to get their advice only from the very same groups who have so often misled investors." "Dalziel has consistently opted for the lazy solution, the one that will seem clean and tidy, and she has done so again in urging investors to go to the members of a selling group (in this case the IFA) as their means of obtaining good financial information or advice. "I will demonstrate in a minute why such a suggestion is lazy, facile and incorrect." He goes on to say that Dalziel thinks that "pretending that membership of a selling group, and reciting of academic mantra, is the certification of competence that an investor should seek to avoid problems" I have no problem with what Lee says about good advice, but  he  then launches into major criticism of various people which is factually incorrect in places, has incorrect name spellings and is vitriolic. I am in no way going to pass judgment on the named persons as it is unhelpful. Yes some of them have chequered careers. Some may have made poor decisions. But what is the point of tarring the whole advisory industry with the work of 10 individuals. Sure Lee does give some credit to other advisers (some IFA members, some not). He also is critical of the process that led to some of these people winning Financial Planner of the Year Awards. As the organiser of these awards I can assure you the process was rigorous. I give these people credit for coming forward and being prepared to be judged on their work. One of the named people - Mike Shaw (who has been having an on-going battle with Lee)  - made his position clear: This is part of his email: "Having read Chris Lee's latest Taking Stock, I hereby nominate Chris Lee for the position of President of the Marxist Financial Advisers Union. This is the Union for Advisers who think they are too  good to be members of every other professional financial advisory organisation in New Zealand. The bully Chris Lee has yet again thrown his considerable weight and ego around the confines of the email margins. As usual his research has got it wrong. Shaw has never been or aspired to hold the privileged position of President of any IFA chapter. Nor has Shaw ever had the wish or inclination to follow in Lee's footsteps and appoint himself baron of any kind of New Zealand territorial financial advisory fiefdom. Lee referred to his departure from General Finance in 1985. I wonder whether the door hit him on his ample behind on the way out or the back of the head resulting in convenient memory loss. It seems Lee has forgotten the reason he left. As this happened some 23 years ago it seems irrelevant to some, but for those there or near at the time I guess it is hard to let go. Lee talks a lot about no research or ratings for Bridgecorp. Has he conveniently forgotten the two favourable rating reports prepared by Ron Keene of Rapid Ratings latterly Axis Ratings? Has Lee also conveniently forgotten about the favourable Morningstar ratings reports for the ING funds? Is Lee asking for these reports to be ignored and passed into irrelevance? Lee also accuses Shaw of being out to discredit him. Shaw's view is that Lee is doing a fine job of that himself. What Shaw is merely doing is asking Lee some questions which Lee has extreme difficulty in answering so Lee reverts back to his usual tactics of being the school yard bully.