A few weeks ago we ran an NZPA story about AMP closing up funds. If you didn't read it you should. While it may have failed to express things the way AMP wanted, it provides a glimpse into what's happening in the market place at the moment.Government should immediately name a high-level task force to inquire into the closure of New Zealand funds. An early outcome should be a process of consultation, determining the optimal number of funds Kiwi investors should have available for their savings. The opportunity to input in the process should be available to all industry participants.
Simultaneous regulation should be introduced ensuring all New Zealand managed funds are of a high average standard, safeguarding the hard-earned wealth of Kiwi workers. [Late Note - Insert: "The range must include appropriate not-for-profit funds and allocation to SRI"] . It may be that subsidies, or tax concessions, will be available for Qualifying Approved Managed Funds ("QAMF's").
At the same time, experts at The Inland Retinue Department ("TIRD") should be tasked with tackling the cause. A new regime should be drafted limiting the volatility of underlying. A scale of surcharges will be imposed on excessive gains. The new programme will be administered by the IRD using it's existing resources.
Anon
The Nationalisation of the Funds Management Industry
We all know that the ridiculous tax position of managed funds has held back the industry for years, albeit that is about to change, but too little too late.
We also know that the voluntary saving structure (which I support), meaning an absence of incentive or compulsion for saving, has also meant that fund managers have not had an easy ride. It also means that fund managers have probably failed to meet the challenge.
However, the final straw leading to further withdrawal from retail fund management services is probably Kiwisaver. Think of it like this.
The government undertakes standard funds management through ACC, Earthquake Commission, National Provident Fund, Government Superannuation Fund, the NZ Superannuation (Cullen) Fund and now Kiwisaver. Why would a fund manager bother competing, when they can simply offer management services to these funds at a wholesale level? Even NZX is in on the act, offering passive management to the government funds.
The evidence is in, not only with fund managers providing management services to the government funds, but with many former high flyers in funds management such as Bevin and Dyer, being employed direct by the government funds.
Enough said. Saving via managed funds has just about been nationalised, also meaning, of course, that many of the underlying investments also have significant government ownership. Interesting!!
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