Goldman Sachs JB Were’s Martin Allison said some of the “sham little finance companies” didn’t deserve one dollar of the money invested in them.
Finance companies weren’t the only ones in the firing line – fund managers were labelled by one adviser as being “arrogant”.
Auckland-based adviser Trish Lynds said one of the big problems was that clients who had lost significant sums of money when international share markets tanked haven’t forgotten what happened. This was partly because they were only just getting back to even.
“They haven’t forgotten and as advisers we shouldn’t forget that,” Lynds said.
Her warning was that “clients won’t be in the industry if returns are down for another year.
“They have had enough,” she said.
She criticised managers and suggested they had become “arrogant” and said that it was their job to know what was going on during the late 1990s and 2000.
There was also questions asked about some of the terms fund managers used to describe their products.
“I just wonder if fund managers are using particular words just because advisers and investors want to hear them when really their funds are pretty vanilla,” Fisher Funds Management managing director Carmel Fisher said.
Another of her frustrations was that people put money into a fund it does well for a couple of years then take money out and invest it somewhere else.
Allison said it was a very difficult market for fund managers as there was no compulsory superannuation, no tax incentives to save and a lack of “apparent political will to do anything about (the problems).”
He said this led to managers wondering, “why bother” with the New Zealand market.
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