[Weekly Wrap] Risk profiling: who's responsible?

One of the stories I found interesting from this week was about the different approach taken to risk profiling by adviser firm Newton Ross.

Thursday, October 11th 2012, 10:34PM

by Niko Kloeten

Many advisers these days use some sort of psychometric risk test to assess client risk tolerance but Mike Newton does things a very different way. Comments on the story suggest he's not the only one skeptical of some of these testing methods, which have been referred to as a "dark art" by more than one adviser I've spoken to. Whatever method one uses, ensuring the client makes an informed choice of portfolio is the ultimate aim.

Another interesting story was about the difference between relying on economic reports and actually getting out and taking a look at the economic conditions in various countries for yourself. Kevin Stirrat of Forsyth Barr has recently returned from such an overseas excursion and says the economic headlines don't always match the reality, for a number of reasons. The story describes his views on the state of the US economy and how it may not be as bad as many people think.

Meanwhile, Kiwibank is rumoured to be interested in Perpetual's advisory business. While Kiwibank is obviously not commenting, the story discusses why such a move would make sense for the company. An interesting issue for anyone buying this part of Perpetual's business is the age of its advisers. One adviser described it as a "retirement farm" and wondered what the advisers would think about working for Kiwibank or whoever else ends up buying it.

Also this week, a new rescue plan was launched for investors in funds run by Australian Manager LM Investments. Trilogy Funds Management said it had been approached by New Zealand investors to take over one of the funds. However, LM has called the rescue bid "opportunistic". It has questioned Trilogy's property management expertise and its previous history of fund takeovers. This looks to be an interesting stoush.

Investors in one of SPI Capital's property syndicates will also have a decision to make in the near future, after the mortgagor called in its loan on the syndicate's property. Refinancing will be tough, according to SPI, but being forced into a sale could lower the value potentially fetched by the property. There is also a $2.2 million related-party loan outstanding on the syndicate's books.

In the insurance section this week, Russell Hutchinson discusses how you can use peer review to improve your recommendations for clients. And in the people section high-profile insurance industry figure Dr Antony Vriens has received a new appointment.

And finally, in deposit rates news, auditors for Allied Farmers have taken the unusual step of refusing to provide an opinion on its audited accounts.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

« Local favourites fight for Perpetual

Fund managers call for level playing field »

Special Offers