Friday 23rd of May 2008

It seems the financial services industry just got a bill it wasn’t expecting in the Budget yesterday. As Good Returns reported the government is coughing up $9 million for the regulation of the advisory sector and is expecting the industry to pay an additional $4 million. It seems that this bill has come as a surprise to the industry. What’s more it is unclear who is going to pay it and what the money will be used for. (If you have any ideas please let me know!) I would have thought if the government decided it was going to go down the imposed regulation route, as it is doing, rather than the co-regulatory approach it had been traveling, then they should pay for it. It’s just not good customer service to give someone something they don’t want and then bill them. After years of discussion and consultation it seems that not a lot of positive progress has been made with tightening up the sector. It may look good that the government is making noise about “investor protection” but it all sounds a little hollow to some at the moment. I know people from EUFA and the likes would certainly agree with the proposition that the government and officials don’t care, but I don’t go that far. Things are happening, but unfortunately the wheels of justice are slow to turn, and the results often don’t help the investor who lost money. With an election coming up later this year, I wouldn’t be surprised to see some politicians pick up on what has happened in this sector to push their own barrows. My guess is that it will be attractive to Winston Peters. Many of the elderly people in Tauranga seem to have suffered with meltdowns in the finance company sector and with Blue Chip. Also it’s not a new plank for Peters as I recall a couple of general elections ago he campaigned against advisers. Maybe the same will happen again?