Thursday 21st of August 2008

Weekly Wrap Subject Line: Last week the theme running through the news on Good Returns was what's happening with adviser groups. This is a big developing issue and this week's news has a similar theme. First up I attended the launch of the Grosvenor-backed Camelot group last Friday. They claim to be one of the biggest independent advisory firms in the country already. This week I have spent some time at the Professional Investment Services conference in Rotorua. As today's story says they are looking to be the number one group in New Zealand by this time next year. You can read more about their intentions here. Added to the mix about what's happening in this area PIS delegates were treated to a session where Commerce Minister Lianne Dalziel, and the heads of the Professional Advisers Association and the Institute of Financial Advisers discussed regulation. One of the stronger parts of this presentation was Dave McMillan of the PAA who expressed, strongly, his concerns that the proposed legislation was too skewed towards suppliers. His fear is that independent advisers would be disadvantaged and would be forced to align with suppliers. He, rightly, points out that this is not necessarily good for consumers. This session was also memorable for the passion shown by the minister. The first part of her speech dealt with her view on EUFA (not very flattering). Also, as reported here, she had some disagreements with comments from IFA and PAA. Read more in my Blog. Over on the KiwiSaver front, other media have now caught up with the story Good Returns first reported about New Zealanders repatriating their Australian super funds back to this country. Added to that is a report (mislabelled) as the Top 100 super schemes. However the report only survey 52 firms! The key point of the story is that employers aren't that keen to offer support to staff on superannuation matters. Makes you think that this, plus KiwiSaver, is a good opportunity for advisers. Our popular People Page has a new chief investment officer at BT Funds, a new boss at FundSource and a new general manager at AXA. All the appointments, along with the latest events can be found on the People & Events Page. Deposit rate news this week includes the continuing evolution of Strategic Finance. At this stage a final proposal on an HBOS-backed MBO is unclear. The deal appears to be progressing, but is morphing a little. During the week though the company reported it may have a full-year operating loss of about $15.5 million on write-offs and provisions for bad debts. This isn't too much of a surprise. My expectation is that the write-offs and provisions will be conservative and at the high end of what will be realised as this will impact on the price paid to buy back the business. (This view could be called cynical, but not unusual). Another story attracting my attention was one about Geneva Finance reassessing its loan book. Hopefully such a move is not a precussor to more bad news. Also we have a piece about Grosvenor splitting its income fund and essentially quarantining its finance company exposure. Sobering, I guess, that someone who researches finance companies ends up holding some duds or potential duds. This week's Insurance News covers latest market share statistics, along with the latest opinion piece from Russell Hutchinson where he ponders why have a two-tier system for adviser regulation.