PIEs are the greatest things in the investment market since sliced bread (if you’ll excuse the poor pun).

This has been clearly demonstrated with the enthusiasm fund managers have had in baking PIE-compliant funds across their product range, and excitement by managers to introduce new funds to the market which are tax efficient.

There has been one notable exception though, which in my view is significant. That exception is in the area of cash PIEs and in particular alternatives to bank term deposits.

Currently there is a flood of money finding its way to bank coffers on the back of troubles in the finance company sector. No doubt much of that money is invested by people on tax rates other than 33%. The simple conclusion here is that banks aren’t necessarily doing their customers a great service.

What is also fascinating is that we have attempted to find out what banks are doing in this space, yet all the ones we have talked to have been pretty tight-lipped.

It makes one wonder whether there are problems, not so much with the product manufacturer, but maybe more with technology issues?

Since the PIE rules came into effect on October 1 there have been plenty of PIE funds available. The only cash PIE we are aware of is one made by AMP Capital and marketed through RaboPlus.

It’s a pretty appealing product for advisers and investors. While its blackboard rate is 8.00%, for a 39% tax payer, we are told, that the effective rate is 8.79%.

While it is being pushed by Rabo to retail customers, we understand AMP Capital has put it on the major platforms (Aegis and FNZ) for advisers to use.

I do have to express my surprise again at the IFA’s annual results and its apparent lack of disclosure to members.

As this story reports the IFA made its second consecutive loss in the financial year ending June 30. In the recent results it reported a loss of $170,821 and as a result members’ funds have fallen more than 60% in the past two financial years from $522,531 to $206,271.

A couple of things are interesting from the story, that is subscription revenue has decreased at  a  time subs have gone up. This would tend to indicate that membership of the body is falling.

Secondly, it must become difficult to set up an APB with such limited resources. It appears the association is expecting help from the government on this matter, but there is no sign, yet, that it will be forth coming.

For the record, Tarawera Publishing has published the annual report for the association, the last time being three years ago.

With the state of the relationship at the moment being poor, we have no expectation that the association would ask us to do this job at the moment.

But at least the former leadership was prepared to keep members in the loop of what their association was doing and the state of its books.

With good reason I guess as the members funds had been built to more than half a million dollars.

I do find it bewildering that the president, at the start of his term, gave me a rather passionate speech about how, as the body representing advisers, the association had a higher fiduciary standard than other organisations. He said the association had to go one step further than others with financial matters.

It’s a pity actions don’t fit the words.

I do wonder what members of the association think about this apparent lack of disclosure by their association?