[Weekly wrap] Raising the bar
Do the minimum qualifications for AFAs need to be increased? That issue was one of the big stories this week on Good Returns.
Friday, April 13th 2012, 11:01AM
by Niko Kloeten
Industry training body ETITO has issued a survey asking participants in the financial services industry for their thoughts on qualifications, including whether the National Certificate in Financial Services Level 5 is the appropriate minimum for AFAs and whether RFAs should also be required to meet this standard.
The questionnaire met with some skepticism from Good Returns readers, who claimed ETITO was self-interested in its line of questioning. It will be interesting to see what results ETITO gets from this and other questions in the survey.
Good Returns also revealed this week that prominent advisory firm Diversified had pulled out of its new distribution agreement with OnePath.
OnePath seems mystified by the criticism of its agreement, but comments on the story from Good Returns readers suggest Diversified aren't the only ones who have a problem with it, particularly around the requirement not to act in a "manner that is prejudicial to OnePath".
Meanwhile, the Financial Markets Authority has finally revealed its case against the former Hanover directors and promoters it is taking to court on behalf of investors.
FMA, which is seeking pecuniary penalties as well as compensation orders, claims Hanover misled investors about the financial health of the company in the lead-up to its demise, particularly around rapid declines in its liquidity. This will be an interesting test case for the FMA's power to take action on investors' behalf.
Meanwhile, the four Lombard directors are appealing their convictions. The case has taken on a high profile due to the presence of two former Cabinet Ministers among the four convicted in relation to Lombard. Attention has focused in particular on Sir Doug Graham, whose conviction has sparked calls for his knighthood to be stripped.
Speaking of finance company executives, where have they all gone (apart from prison)? Good Returns has located a few of the ones that kept their noses clean. We're keen to hear from you if you know of any others.
In other people news we report, late this afternoon, that the head of Spicers Wealth Management (now owned by AMP) is moving on.
Beleaguered financial services company NZF Group has had another setback, with the High Court freezing its assets at the request of the receivers of its finance company subsidiary NZF Money.
The news is better for Heartland, however. The company that wants to become a bank some day has edged closer to meeting its annual profit forecast after posting a $5.3 million operating net profit for the three months ended March.
Heartland has also announced its chief financial officer Sean Kam has resigned and will leave the company in June. Kam says he is best suited to "transformational" roles and the transition which created Heartland is now complete.
In insurance news, Sovereign has announced it will offer life cover for both new parents for the first year of their baby's life as part of its ‘Choose precious' campaign.
Also, the Financial Services Council says its research into the country's underinsurance problem will "challenge" the insurance business model. FSC chief executive Peter Peilson has also defended the decision not seek the views of advisers or adviser bodies in the investigation.
Finally, in Good Returns blogs this week: Russell Hutchinson argues advisers need to adopt a new "normal" for life insurance cover, rather than just selling the most expensive policy; and I argue there are a number of other fixes required for KiwiSaver besides the default provider system.
Niko Kloeten can be contacted at email@example.com
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