FSC collapse spectacularly bad timing

Could the Financial Services Council have picked a worse time to fall apart?

Monday, February 29th 2016, 12:00PM

by Susan Edmunds

With the Financial Advisers Act review in full swing, it seems more than unfortunate that the FSC is not there to make a clear argument of a united industry.

It is believed that talks are under way to reunite the association but it will have to overcome a significant amount of damage if it is to get back on its feet.

The FSC seems to have been in a period of tumult since 2014, when it closed its Wellington office and made redundant Deborah Keating and Marilyn Max, both well-regarded in the industry.

The last submitted accounts in 2014 show a deficit of assets and the FSC acknowledged it had had to pay the costs associated with those redundancies and breaking the lease on its Wellington premises.

Now it has the costs of ending chief executive Peter Neilson’s contract to add to that bill and the $200,000 spent on a report by actuaries Melville Jessup Weaver.

That report then prompted a number of insurers to quit, taking their membership fees with them.

There appears to be little or no advocacy being done on behalf of members as it goes through its reformation phase, no management of initiatives and opportunities. The Commission for Financial Capability is planning its review of retirement income policy this year without an FSC chief executive to offer input.

While talks continue on what the future of the FSC might look like, the organisation missed its chance to make a submission on the FAA options paper that would be taken seriously by regulators as representative of a cohesive industry.

It should be hoped for the sake of the industry that a solution can be found quickly.

Tags: FMA

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