by Niko Kloeten
The reaction from our readers has been intense, with 27 comments so far making it the most commented story this week. Attention has been focused in particular on OnePath winning fund manager of the year, adding to the list of accolades it has won this year (and its parent ANZ has also been winning awards).
Some readers referenced the ING CDO debacle, but what does that have to do with the current state of OnePath and its performance? We have argued many times that in the end OnePath did a pretty good job cleaning up the mess. Far better than what happened with other product failures including the finance companies.
But what was really interesting to me was the cynicism around the process of picking the winners. We did post in the comments a description of how the awards were decided.
We think there is a place in the market for awards like these and people should recognise excellence (and understand the process behind the awards).
Keep an eye out for a feature on research houses in ASSET in the not-too-distant future.
And as its fund manager wins accolades, ANZ is also looking to beef up the financial advice part of its business by doubling the number of salaried wealth advisers in Australia and New Zealand.
It is interesting that they are looking to increase the number of "in-house" advisers as opposed to "tied" external advisers. I believe banks will focus more on this in future as they could risk losing clients to independent advisory firms if their advice service isn't up to scratch. And as I have written previously, banks are seen as the enemy by some in the industry but others see them as playing a valuable role as the largest source of new financial advisers in the country.
**** Have you checked out our new News Bites section? Lots of interesting little stories here
Also this week we learned that FSCL, Ross Asset Management's dispute resolution scheme, tipped off the the FMA after receiving complaints from investors. However, it said some clients had been trying to withdraw money for up to nine months before complaining. This case will surely be a lesson to investors that if your fund manager/financial adviser doesn't give you your money when requested, you should complain immediately. Who knows how much money RAM has lost in the past nine months? It is startling that it would take investors that long to speak out, particularly given the strong public awareness of what happened to the finance companies.
Meanwhile, Pyne Gould boss George Kerr says Perpetual will be sold by Christmas. It will be interesting to see who buys the rest of it as there have been rumours that local banks SBS and Kiwibank are interested in the financial advice part of the business. I've even heard there was a bid put together by a consortium of Perpetual staff, which would fit with the management buy-out of Perpetual's corporate trust business.
However, the company says Kerr is in Australia closing the deal at the moment which may suggest a firm like Macquarie is in the frame?
Whatever happens, we're unlikely to see Pyne Gould operating on these shores much longer.
An interesting story in the People section is what has happened to the managers at BT Funds Management. Where have they gone?
Investors in the LM First Mortgage Income Fund have also received the unwelcome news the fund's unit price has been cut from 73c to 59c. This fall, and the fees being charged by LM, are sure to give extra fuel to Trilogy's bid to take over the fund. Receivers and liquidators are often criticised for high fees but, as this case shows, the question is whether you pay the receivers or pay the company that got the fund into the mess in the first place (unless a white knight fund manager steps in).
In insurance news, Partners Life has had a lower-than-expected drop in medical business after axing upfront commissions on medical insurance products. And Tower has seen a bounce-back in profit after a quake-hit 2011.
And finally, in the "continuing stream of bad news for NZF" file, Mike Pero Mortgages has been valued at a fraction of what it was worth when NZF acquired it.
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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