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Task Force delay not necessarily bad

Monday, August 1st 2005, 9:18AM

by Philip Macalister

It's little surprise that the any regulation of Financial Intermediaries is now more years away than many people would like. I did say in a Blog just over a week ago that I wouldn't be surprised if the Task Force report got put back because of the review of non-bank products.

The way it has happened has been a little strange though. The Ministry of Economic Development prepared a press release on the matter which it forgot to send to people announcing a decision, but the Government still hadn't seen the report. (Who is running this show?)

What I think is interesting is the reaction to this "delay". The industry is quite within its rights to be highly disappointed as much work had gone into the issue across the board and it quite rightly had an expectation this effort would lead to changes.

What it has done though is uncover some of the agendas underlying the prospect of change.

The people who are most unhappy with the delay are likely to include the fund manager/life insurance crowds who saw regulation as a way of capturing distribution.

Here's the argument.

One of the fears of regulation, from an advisory perspective, is that small independent advisory firms would be forced to join bigger dealer groups as has happened in Australia.

The task force's options paper made some interesting comments along the line that changes it proposes may alter the shape and look of the advisory industry. It went on to say that that was not its aim or purpose, but it may happen. Sort of like saying if it happens it's not our fault.

What's been happening back in the real world is that there have been a number of groups saying that regulation will bring about rationalization/consolidation and that is a good thing as the small players will have access to resources and systems they currently don't have (probably can't afford).

Others have been a little more blunt and using the fear factor, essentially saying you have to join a big group to protect yourself from being sued etc.

Essentially they saw regulation as a tool to build their dealer groups. (This raises an interesting question which I won't answer - but you may have a crack at. Whose interest is being served here; the adviser or the manufacturer? Oh and what about the clients?)

Bad luck guys that strategy ain't going to work for a while.

One of the pluses of the New Zealand environment, compared to the Australian one, is that we have a good mix of big groups and smaller independent financial advisors. It would not necessarily be in the best interests of the industry, nor the consumer to have an advisory industry dominated by big chain stores.

It's reassuring to see that groups like the FPIA are just going to get on with being prepared for changes when they come. Likewise we hear that at least one other reasonable sized association has been working towards becoming a self-regulatory organisation and has been developing budgets and talking to a prospective chief executive.

If the Task Force has provided a catalyst for organisations to speed up changes, then that is a good outcome.


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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

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