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, July 19th, 9:10AM

News

rss
Latest Headlines

Govt ignores its own rules: Lee

Government has made a mockery of its regulation of the financial advice sector with the Mighty River Power shares sale process, says investment adviser Chris Lee.

Tuesday, April 16th 2013, 6:00AM 1 Comment

by Susan Edmunds

He said the regulation of the financial advice sector was meant to focus on giving consumers the right advice for their situations and making sure they got it from qualified people. About 18,000 people had left the industry and there were fewer than 2000 advisers left.  “They put us through all these hoops.”

But he said Mighty River Power sales process had run contrary to all those ideals.

“It’s completely inappropriate to have a campaign saying ‘get on board’. It isn’t appropriate for everyone to buy shares in Mighty River Power.”

Lee said he had heard from people who were using their credit cards to buy shares.  Others had said they would take out a loan of $20,000 to grab their slice.

He called on the Government to get the process right before Meridian came on to the auction block – a float that would be twice the size of Mighty River. “I think everyone who gets advice on Meridian should get it from a financial adviser, not a politician.”

He acknowledged that few of the financial advisers currently operating in the market had come from a background in investing in equities. “Most financial advisers have come out of the insurance industry. Only a very small number have anything much to do with equity markets.”

But he said rather than offer shares only through three lead brokers, as with Mighty River, and alienate smaller advisers, the Government should approach independent advisers and offer them the chance to attend analyst meetings and get up to speed in order to offer Meridian shares to their clients.

“No one is getting any real advice at all.”

Lee said the Government had a fine juggling act on its hands with the Mighty River Power sale. It needed to keep Kiwi investors happy but would also need to keep big foreign investors on-side because they would be needed in a float the size of Meridian.

A fear of not getting the price intention for Meridian would drive the share allocation of Mighty River, he said. If foreign investors did not make money out of Mighty River, they would not be as keen to come back with wallets open again. 

“They’ve got to give as many as possible to New Zealanders but on the other hand, they have to get the best possible price. They want to give people a good experience so they come back again and the easiest way to do that is not to give anything to the institutions but then they won’t invest in Meridian. Managing the conflicting objectives will be a difficult process.”

« Price can't be sole selling point: FMAIFA working on pro-bono offering »

Special Offers

Comments from our readers

On 22 April 2013 at 2:59 pm paul Carrick said:
As a person coming from an "insurance background , I will add my comments while I have some empathy for some of Mr lees comments and I have made my representation to other parties, I do think his comment around advisers "coming out of insurance" is a bit self promotionary, I know many insurance based advisers who know and understand equities who are CFPs etc and would do a great job in explaining equities(or shares for the more common folk who like plainer language), there is a difference between understanding and having Quality discussions with a person around equities and selling it, Maybe a more honest point would be that there are not many members of the public who will pay for advice and then also pay for brokerage fees to buy MRP.
Also for the adviser giving the advice, it needs to be profitable for them.
Personally I think there will be some future issues for MRP shareholders to work through, such as when they may not receive a dividend, or the company requires a shareholder contribution etc,this will be especially pertinent for those who have not invested into shares before, and even more so when it is a business like MRP with unique characteristics.

Sign In to add your comment

 

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 7.14 6.75 6.39
ANZ 8.64 ▼7.45 ▼7.09 ▼6.95
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.85 ▼6.49 ▼6.35
ASB Bank 8.64 7.14 6.75 6.39
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 - 7.14 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 7.74 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 - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 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 6.89 6.55 6.35
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 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 18 July 2024 10:19am

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