It’s not often I get shocked by an announcement in this industry of ours. But yesterday’s deal between St Laurence and Dorchester is a show-stopper.

Who would have thought that these two would get together? Certainly not me, and from the many people I have talked to I am not alone on this.

My take on this is that the deal has some logic to it. For some that is difficult to comprehend as all the Dorchester suitors named previously have been Bridgecorp and Hanover. Confusing the situation is that shareholding of Dorchester which includes a passive holder in Hugh Green (17%), Bridgecorp (17%) whose holding is currently in hock to St Laurence, former chief executive Brent King (9%), and St Laurence (13%).

St Laurence is probably in the box seat as it has lent money to Bridgecorp and has control over its stake, plus it has an agreement to pick up more of the company.

I couldn’t get hold of St Laurence’s Kevin Podmore last night (who I know quite well). But I did speak to Dorchester’s Andrew Walker – who I don’t know.

Walker impressed me.

Clearly Dorchester, under his captaincy, has changed course significantly and is sailing off in a new direction.
This is what the market is confused about as they still see Dorchester under the reign of Brent King. They still think of the boardroom stoush. And they still think of the Bridgecorp deal King tried to do.

My suggestion to you is throw away your old perceptions of Dorchester.

While Dorchester has played in the consumer lending area and car finance it is moving away from here. This is well-explained in this Good Returns story.

However the challenge will be executing the deal.

Podmore is a straight up guy and who does things well and doesn’t cut corners. My guess is he can see things far more clearly than you or me.

Also I suspect that he and Walker are a good fit. One comment made was that there was a “karmic” feeling between the two.

One of the highlights of last week’s Super Conference was the unequivocal speech from National Party finance spokesman Bill English.

However, I wonder if it will be a low point for him?

Why? Well English made it absolutely clear that compulsory superannuation was off the agenda. It just wasn’t an option, he said.

What surprised me was that at the previous conference less than six months ago National’s then finance spokesman and now leader, John Key, and Labour’s Shane Jones, who chairs the finance and expenditure select committee (FEC), gave a completely different story.

These two men seemed to have a bit in common, and it was clear that FEC was working quite constructively, as opposed to being split down party lines.

Key and Jones indicated compulsory super was becoming more attractive.

Their view could be summed up by the comment that politicians were keen to go down this track, they just wanted to know how to do it.

Well that ain’t what English said last week. When I quizzed him on this, recounting the Key and Jones’s comments, he said, simply, things have moved on since then.

I wonder – and I do hear a rumour – that maybe it will be Mr English who will be moving on….to a new role.

Maybe Michael Cullen has been right with his suggestions that English and Key are out of step with each other?

The start of the KiwiSaver scheme is just months away and you can feel this beast, or should I say bird, slowly starting to prepare to rise up.

A discussion we had at our Monday morning staff meeting showed me that the awareness of KiwiSaver’s birth is starting to rise beyond just the people in the industry.

For something different I thought I would write an occassional series of Blogs on what KiwiSaver means from the perspective of a SME business owner.

Hopefully it will help people in the industry and other business owners deal with the issue, and maybe even promote some discussion.

The catalyst was when one of our staff asked what we, as an employer, were going to do about KiwiSaver.

It would be fair to say, and possibly maybe a surpise to many because of our place in the savings industry, that as employers we had done very little!

We have always had a desire to establish a company superannuation scheme in the past, but enquiries to various people in the industry hadn’t got us very far and it all fe l l into the too-hard basket.

I have always found it interesting that the workplace super providers have done little for SMEs in the past. No doubt there are economic reasons for this, or maybe other reasons. Any ideas from people in this space would be interesting.

I ask this question as I wonder if this trend will flow through to KiwiSaver.

No one has made much attempt to strike up a conversation with us so far. There has been one letter from our bank which said KiwiSaver is coming, and that they will offer a product. I thought it was a bit of a light attempt to strike up some dialogue on the issue really.

We will see (and I’ll report) on how this develops and what else transpires. Maybe other providers will start reading this series of Blogs and all be knocking down our door, or perhaps they will be too scared to contact us as they may ger criticised! Heaven forbid.

If you would like to comment on KiwiSaver email me at blog@goodreturns.co.nz

It’s not often I can say I agree with politicians – especially two who are opposites

For some time now I have been watching this perception develop that KiwiSaver will morph into a compulsory super scheme in no time at all.

Indeed it was an underlying theme I took away from last year’s Conferenz-organised superannuation summit which I chaired.

There Tower’s Tony Hildyard even argued that KiwSaver would be a compulsory scheme before the next election.

These thoughts have been fuelled by a Herald poll and editorial which essentially argue the time is right.

Well it’s all bollocks.

Kiwis have said for years that they want compulsory savings. Russell Hutchinson provides a useful take on this in his Moneyblog.

I have for years argued these poll results are meaningless.

Where I agree with politicians is firstly with this presser from National’s Bill English where he quite rightly points out the Australian system is very different to NZ (low and tight state scheme along with payroll tax versus universal state scheme and voluntary workplace savings).

Secondly Finance Minister Michael Cullen has always opposed compulsion. His argument (which some from the right will struggle with) is that compulsion is interfering too much in individuals’ lives.

But, yesterday, in Parliament he put up a good case.

My take on it is simple and pragmatic. KiwiSaver is here to stay. Learn about it and how to make money from the scheme.

Secondly don’t get caught up in all this speculation about compulsion. It’s wishful thinking.