About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, September 2nd, 4:54PM
rss
Latest Headlines

Money Managers double whammied

Investors told their $20 million bond won't be repaid on time and Securities Commission suspends First Step investment statement.

Friday, April 27th 2001, 10:50PM

by Philip Macalister

New Zealand's largest financial planning firm has hit two major snags this week. First up the Securities Commission has suspended the investment statement for Money Managers' highly popular First Step mortgage funds.

Secondly, 1700 investors who put money into the Metropolis property development are about to get a letter from the trustee saying that the $20 million bond issue won't be repaid on the due date - May 20.

Marketing manager Al Scott says the trustee, Tower Trust, is sending a letter to bondholders telling them that it is "unlikely the developer will be in a position to repay the bonds (on the due date)."

Investors put $21 million into the bonds and there is a further $4 million due to be paid out in compound interest.

Scott says Money Managers are "reasonably concerned" about the missed payments, especially since it was not made aware of any problems until quite recently.

The Metropolis Subordinated Property Bonds were issued in September 1998 and offered to pay investors 14% annually, over an estimated term of 19.5 months.

The money raised was used to refinance existing mezzanine debt of the Metropolis development in Auckland's High Street. The 38-level development consists of 345 apartments and 23 penthouses with 17 retail/commercial premises and 210 carparks.

Scott says the problem is that the developer hasn't managed to sell as many apartments as forecast, consequently the money isn't available to repay the bonds. While the news seems bad investors still have their security and refinancing packages are currently being negotiated.

On top of the Metropolis problems, the Securities Commission has suspended the First Step investment statement over the issue of fees.

First Step is a series of four mortgage funds which were set up in September last year to replace traditional contributory mortgage funds and to take on the mainstream mortgage backed trusts. It has been highly popular with Money Managers' clients, attracting more than $125 million since launch date. (Previous story)

Money Managers promote the fund as having no fees, however the manager, Securities Registries Limited, take a portion of the margin, that is between the money invested and what is paid to the investors.

Scott says the "no fees" marketing is based around the fact that the fund has no entry or exit fees.

He says the issue is "semantic". However the company is happy to meet the Securities Commission's demands and has withdrawn the investment statement and all other advertising.

Since there is no investment statement for the product, Money Managers can't promote the funds.

"We are not too concerned about it," Scott says.

He says the company is working to fix the problem: "We want to comply (with the commission)."

Scott says the tax structure of the trusts is not under question.

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

« Super 12 and superannuationSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Two advisers investigated
    “I find it very interesting that by far the majority of the FMA's investigations and Enforcements involved product providers...”
    4 hours ago by Comprehensive Planner
  • Vertical fund businesses – a broken model?
    “The problem for advisers is: do I get fired if I don't use enough of the boss's product.And if they do follow the party line,...”
    6 hours ago by traveller
  • Funds for fee-conscious customers
    “So just to clarify David, does the 1.85%( for instance) include the currency transaction fee, MER's of underlying funds and...”
    9 hours ago by gaman AFA
  • Appetite for annuities
    “Hi Brent, yes collecting research data can be challenging. Nonetheless the focus groups we did up and down the country...”
    10 hours ago by Ralph Stewart
  • Vertical fund businesses – a broken model?
    “Nice article. Don’t expect anyone in the Government or the FMA to upset historic or prospective employers by properly...”
    11 hours ago by Brent Sheather
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 6.24 5.10 5.25 5.59
ANZ Special - 4.69 4.89 -
ASB Bank 6.50 5.05 5.25 5.35
ASB Bank Special - 4.69 4.89 4.99
BankDirect 6.50 5.05 5.25 5.35
BankDirect Special - 4.69 4.89 4.99
BNZ - Mortgage One 6.65 - - -
BNZ - Rapid Repay 6.24 - - -
BNZ - Special - 4.69 4.69 -
BNZ - Std, FlyBuys 6.24 5.09 5.09 5.19
BNZ - TotalMoney 5.99 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.75 5.75 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 5.85 - - -
HBS Bank 6.14 5.39 5.39 5.39
HBS Special - 4.69 4.69 4.99
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.45 5.10 5.40 -
Housing NZ Corp 6.49 5.19 5.49 5.59
Lender Flt 1yr 2yr 3yr
HSBC Premier 6.60 4.89 4.89 4.99
HSBC Premier LVR > 80% - - - -
HSBC Special - 4.49 4.49 4.49
ICBC 6.75 5.99 6.39 -
Kiwibank 6.15 4.79 5.49 5.69
Kiwibank - Capped - - - -
Kiwibank - Offset 6.40 - - -
Kiwibank Special - 5.09 4.65 4.99
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.70 5.65 5.95 -
Lender Flt 1yr 2yr 3yr
NZ Home Loans 6.60 5.39 5.49 6.29
Perpetual Trust 7.70 - - -
Resimac 5.59 5.37 5.40 5.52
SBS Bank 6.14 5.39 5.39 5.39
SBS Bank Special - 4.69 4.69 4.99
Sovereign 6.35 5.05 5.25 5.35
Sovereign Special - 4.69 4.89 4.99
The Co-operative Bank 6.20 4.69 4.79 4.99
TSB Bank 6.24 5.10 5.39 5.45
TSB Special - 4.69 4.69 4.99
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.15 4.99 5.19 5.19
Westpac - Capped rates - 6.15 6.15 -
Westpac - Offset 6.15 - - -
Westpac Special - - 4.69 -
Median 6.40 5.09 5.25 5.35

Last updated: 18 August 2015 3:39pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com