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[Weekly Wrap] Qualification debate

One of the stories that generated a debate among Good Returns readers was about a survey showing support for requiring registered financial advisers (RFAs) to be qualified.

Friday, February 22nd 2013, 10:17AM

by Niko Kloeten

The support for making RFAs qualify was one of a number of interesting results from the industry survey by training body The Skills Organisation, which included different types of advisers as well as some non-advisers.  This is clearly an issue some advisers feel strongly about, as the comments demonstrate.  There are some who believe that to become a true profession all practitioners must first prove their competence by passing some sort of qualification, while others think qualifications aren't necessary in fields like insurance and mortgage broking.  

There's a strong chance all advisers could one day be required to be authorised, but there is little evidence so far that RFAs, many of whom have the qualifications necessary to become AFAs, are causing any problems.  Sadly the publicity has been around investment advisers like David Ross and Andrew Robinson, both of whom have lost their AFA status.

A suggestion by a number of commenters has been to create separate qualification and authorisation categories for financial advisers, an idea industry bodies aren't keen on.  This idea has some merit because, as commenters pointed out, the title RFA implies that advisers have met some minimum standard to become registered (such as registered teachers or even real estate agents).  Being registered on the FSPR is really just a compliance requirement.  

Another big story this week was the news AMP is going to merge the Axa KiwiSaver scheme into the AMP scheme, which AMP boss Jack Regan has explained in more detail here.  The decision to adopt Axa's multi-manager approach should boost results for AMP, which hasn't always had the greatest KiwiSaver returns, something that hasn't hurt it yet but will become more of an issue as investors take more notice of their growing balances.  New Zealanders tend to be suspicious of corporate mergers and industry consolidation but if done well they can not only allow for greater scale and lower cost but also for the best elements of both businesses to be retained.

But while KiwiSaver is going from strength to strength, the life insurance part of the AMP business is being affected by challenges faced by the whole industry around dealing with tax changes. As a general rule, the more something is taxed, the more it will cost and the less of it there will be.  Regardless of the technical debates about the tax treatment of life insurance, it's disappointing that New Zealand's already under-insured population will be even less likely to purchase life insurance.  The latest FSC data shows lapses outweighed new business in the last quarter.

Active versus passive is a perennial debate in investment circles and new research shows that, in New Zealand at least, active managers outperform the index.

In mortgage news, banks are targeting first-home buyers while in deposit rates news, the BNZ is calling in nearly $450 million of notes

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

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans ▲7.24 5.99 6.29 6.60
AMP Home Loans $200k+ ▲7.14 5.89 6.19 6.50
AMP Home Loans LVR <80% - - 5.85 6.29
ANZ ▲6.74 6.05 6.49 6.65
ANZ LVR > 90 ▲6.74 6.55 6.99 7.15
ANZ Special - - 6.09 -
ASB Bank ▲6.75 6.09 6.40 6.65
ASB Bank Special - 5.95 - -
BankDirect ▲6.75 6.09 6.99 6.65
BankDirect Special - 5.95 - -
BNZ - Classic - - - 6.25
Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus ▲6.74 5.99 6.39 6.59
BNZ - Mortgage One ▲7.15 - - -
BNZ - Rapid Repay ▲6.74 - - -
BNZ - Std, FlyBuys ▲6.74 5.99 6.39 6.59
BNZ - TotalMoney ▲6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide ▲6.45 5.90 6.50 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
Lender Flt 1yr 2yr 3yr
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.15 5.85 6.20 6.25
HBS Special - - - 5.95
Heartland 6.45 6.75 7.00 7.60
Heretaunga Building Society 6.25 5.85 6.50 -
Housing NZ Corp 6.50 6.00 6.30 6.60
HSBC Premier 6.59 5.95 5.99 6.25
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.85 5.85 5.85
Kiwibank 6.40 5.99 6.29 6.29
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.30 - - -
Kiwibank LVR > 80% - - 5.85 6.29
Liberty 5.64 - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society ▲6.95 ▲6.15 6.60 -
NZ Home Loans 6.35 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
RESIMAC - lo doc 7.34 7.06 7.38 7.82
RESIMAC LVR < 80% 6.34 6.06 6.38 6.82
RESIMAC LVR < 85% 7.34 7.06 7.38 7.82
Lender Flt 1yr 2yr 3yr
RESIMAC LVR < 90% 8.34 8.06 8.38 8.82
SBS Bank 6.15 5.85 6.20 6.25
SBS Bank Special - - - 5.95
Silver Fern 5.95 6.10 6.55 7.05
Sovereign ▲6.85 6.09 6.40 6.65
Sovereign Special - 5.95 - -
The Co-operative Bank 6.45 6.00 6.00 6.25
TSB Bank ▲6.74 6.00 6.19 6.60
TSB Special - - 5.80 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac ▲6.59 6.09 6.39 6.65
Lender Flt 1yr 2yr 3yr
Westpac - Capped rates - 6.49 6.99 -
Westpac - Offset ▲6.59 - - -
Westpac Special - 5.95 6.09 -
Median 6.54 6.00 6.39 6.60

Last updated: 30 July 2014 9:14am

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