tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, March 29th, 10:40AM

News

rss
Latest Headlines

Macquarie removes the cash management edge

Macquarie Investment Services has announced the closure of its Macquarie Gilt Edge Access Account (Macquarie GEAA), though it said it remains committed to the New Zealand market.

Friday, December 10th 2010, 5:00AM 3 Comments

by Benn Bathgate

The closure comes in the wake of a review which found "it is in the best interests of unit holders to terminate the Macquarie GEAA on March 7, 2011."

The GEAA was one of the first cash management accounts in New Zealand and was widely used by advisers.

International Financial Planning director Robert Oddy said "for a number of advisers their clients are going to be disadvantaged."

He said advisers may have problems if they don't act as providers may still pay out clients' money into the account. He also said there was no comparable account available for advisers, with both bank and broker accounts lacking the flexibility of the GEAA for merging client funds and investments.

The company said the decision to close the account - established in 1996 to provide an at-call cash investment with wholesale deposit returns - was based primarily on two factors; a fall in funds under management that resulted in increased servicing costs and competition from banks able to offer higher interest rates.

"The main reason for the decrease in competitiveness is that banks are generally offering higher interest rates on retail banking products than the Macquarie GEAA can achieve from returns provided by the wholesale securities and deposits in which it invests," Macquarie said in a letter to unitholders.

Macquarie also said that with the fund pool diminishing "there would have needed to be an increase in management costs for all unit holders, had the Macquarie GEAA continued."

Oddy said in the wake of the closure it was "disingenuous of Macquarie to say it remains committed to the New Zealand market," a claim emphatically denied by Macquarie Private Wealth head Ian Witters.

"Macquarie Private Wealth is very keen to build its business here," Witters said, adding they had "grown our advisory business by over 25%."

He said the GEAA was launched in a very different market to now when products such as cash PIEs "certainly weren't around" and that the decision to close was simply because it "could no longer be competitive."

During the account's lifetime Witters said it had "done a good job particularly for the independent financial advisers."

He said the group sees opportunities arising in the market thanks to the new regulatory landscape and that "we are actively in the market looking for advisers to join Macquarie. We have plans to continue to strengthen."

Witters believes that while the adoption of new regulations may be painful in the short term, "if they can give confidence to our market then a deeper capital market will be good for our economy."

At November 30 the account had $161.5 million in funds under management and at its peak in June 2008 had $310.2 million.

In order to facilitate the closure of the account Macquarie will automatically close all unit holder accounts which are open or active on March 4, 2011.

The letter outlines two options for Unit Holders; redeem funds prior to termination with the option to transfer into another account or withdraw by cheque, or do nothing in which case the funds will be returned by cheque.

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

« KiwiSaver enters ‘hard yards’ phaseKiwiSaver mismatch a 'huge challenge' for advisers »

Special Offers

Comments from our readers

On 10 December 2010 at 11:33 am Steve Wiltshire said:
I view this as another Macquarie product failure like several others they have sold into the NZ market.
On 15 December 2010 at 2:32 pm Michael Taylor said:
Would love to know of any innovative solutions to replace this account.
On 17 December 2010 at 11:19 am jaded said:
Great way to erode any remaining goodwill. Encourage everyone to pay all their divs etc into this account, then close it. (Since we are too thick to realise that keeping it open is not in our best interest) At least its from the front this time, the no lube CMT closure still hurts.
Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 28 March 2024 9:42am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com