[Weekly Wrap] Back to the drawing board
This week we saw surprise over the low take-up for an offer of free financial advice as well as changes to controversial legislation affecting advisers.
Friday, September 14th 2012, 5:41PM 4 Comments
by Niko Kloeten
The Institute of Financial Advisers will have to go back to the drawing board after its pro bono programme during the inaugural Money Week attracted only 30 enquiries nationwide. It’s a shame the turnout wasn’t higher because there are undoubtedly plenty more people out there who could use a dose of financial advice, free or otherwise.
It’s always tempting to engage in a round of blamestorming when things don’t turn out as hoped. However, one adviser’s message to others who signed up for the initiative is to get out and promote it themselves rather than waiting for someone else to do it. The feedback from those who did take part has been positive so it’s up to those running the programme to find a way of getting more interest next year.
Authorised Financial Advisers (AFAs) around the country will be breathing a sigh of relief after politicians saw sense and changed a controversial section of the Financial Markets Conduct Bill dealing with “unsolicited offers” of financial products. AFAs and QFE advisers will be allowed to make offers “in the ordinary course of business”, which should allow them to carry on as usual.
However, Registered Financial Advisers (RFAs) and “information-only” salespeople will have their ability to sell financial products (this doesn’t include risk products) severely curtailed. This is probably the outcome the MPs were looking for when they originally wrote the section, but trying to guess what politicians intended is difficult and it’s best they fix problems in bills before they are passed.
Something new to watch: Video is coming to Good Returns' readers. Watch Magellan's Hamish Douglass here
Meanwhile, the court battle between Perpetual and the FMA over the regulator’s search raids in April has ended in somewhat of a stalemate, with the High Court declaring the FMA’s search notices unlawful but allowing it to keep the documents obtained during the searches. Perpetual’s owner Pyne Gould Corporation is considering its options and it has a strong starting point if it decides to take the case to the Court of Appeal.
Could self-managed KiwiSaver funds be coming to a client near you? Local finance industry figures say it’s only a matter of time and advisers could find a great opportunity in helping KiwiSaver members manage their own funds. An interesting issue with KiwiSaver is that although for many Kiwis it is likely to be a significant part of their retirement savings, the scope for advisers to help out is pretty limited given that investors are limited to one provider. Self-managed funds would allow advisers to play a much more hands-on role in what is currently quite a commoditised scheme.
And a former regulator has called on advisers to take a different view on regulation, saying the regulations can protect advisers as well as just their clients. This is sure to generate some debate as many advisers don’t see any benefit from the regulation and see only higher costs and greater risk if they become AFAs.
In insurance news this week, Tower’s chairman has resigned as the company considers offers to add value to the business for shareholders. And in his weekly column Russell Hutchinson showed why insurance is about much more than just the claim.
And finally, in deposit rates news, Fisher & Paykel Finance could receive a ratings boost if Haier is successful in its takeover bid for its parent Fisher & Paykel Appliances.
Niko Kloeten can be contacted at firstname.lastname@example.org
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