[Weekly wrap] Crossing the Tasman
This week saw the announcement of a mutual recognition agreement that will allow financial advisers to operate in both Australia and New Zealand; meanwhile, TNP announced a new share scheme and the IFA raised questions about KiwiSaver distribution.
Friday, July 6th 2012, 9:40AM
by Niko Kloeten
The agreement between ASIC and the FMA is the latest step on the continuing path to New Zealand and Australia becoming essentially one market in financial services. New Zealand and Australia have both benefited from freer trade in other industries, and this shows New Zealand's financial adviser regulations are respected across the ditch.
However, there is still a gaping hole in the trans-Tasman financial services market: the inability for those moving from Australia to New Zealand to transfer their superannuation funds. New Zealand has already signed its part of the agreement and Australia needs to stop dragging the chain on this issue.
The FMA was also in the news this week with the Institute of Financial Advisers cautiously welcoming its guidance on KiwiSaver distribution. However, it questioned how registered financial advisers could sell KiwiSaver given some of the requirements of them.
This issue is likely to be addressed when the FMA issues its revised guidance in a few months after the initial consultation process. The regulator has shown in its brief history a willingness to listen to industry concerns and alter its approach when things are seen to be unworkable for those at the coalface.
But regardless of what regulators do, financial planning won't become a true profession until it is seen as one by consumers, a financial services veteran says. Also important is how the industry sees itself; when financial planners think other financial planners are crooks it doesn't bode well for what outsiders will think.
The point about regulation is an important one as there are plenty of examples of heavily-regulated industries behaving in unprofessional ways (Wall Street bankers being a prime example). It is also worth noting that perception is reality in this regard; it doesn't matter how many actual "cowboys" there are so much as whether the general public thinks the industry is full of them.
Also this week, TNP launched a new share scheme for advisers, which will enable those with high production levels to get an increased share of the business. The company has rejected claims this will lead to a tied agency structure.
The FMA appeared in another story this week, this time regarding its investigation into related-party loans by Perpetual to George Kerr's Torchlight Fund. The loans, made after an emailed request by Kerr, have been the subject of a court case that has been revealed after a confidentiality order was lifted. This is not a good look for Kerr or Perpetual.
In insurance news, Asteron is undergoing some big changes under new managing director David Carter. It has changed its name to Asteron life to show its focus on life insurance, as well as adding new products and changing its commission structure. It has also made some new appointments.
Meanwhile, Christchurch-based health insurer Unimed has received its latest ratings update from AM Best.
Niko Kloeten can be contacted at email@example.com
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