About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, December 13th, 9:47PM
rss
Latest Headlines

NZX stands by funds business

NZX is standing by its fund management business in the face of shareholder criticism - but not all advisers are convinced.

Friday, October 5th 2018, 6:00AM

Elevation Capital founder Chris Swasbrook this week called for the stock exchange operator to sell its funds business and focus on its core operations, slashing spending and reducing head count.

It said NZX’s non-core business segments, such as funds services, were generating about 30.5% of revenue but only 10% of operating earnings. The businesses were subscale, had few barriers to entry and lower margins than NZX’s core business, it said, but at the same time NZX was having trouble growing them.

Being an exchange market operator was a different business to operating a funds service firm, Elevation said, requiring different management and board skills. But spun off, that new funds management company would compete fully in the marketplace via the acquisition of active funds management businesses, private equity and/or venture capital businesses. It could also develop a fund seeding and incubation business to capitalise on investment made in regulatory compliance.

NZX chair James Miller responded with a letter to shareholders, in which he said the board was conscious of the need to improve returns to shareholders.

"Over the past 11 months, we have advanced our business materially and are confident about the future. Our non-core businesses have been divested, customer service s and business efficiencies improved, secondary market liquidity increased and plans well progressed to simplify the New Zealand market's structure and rule set."

He said the board welcomed investor feedback but the shareholders applying public pressure for the NZX to sell its fund management and wealth technologies businesses were a "small group".

"New Zealand's fund management sector has significant growth potential and maximising the growth of our superannuation, KiwiSaver and exchange-traded funds products is a priority. Growing these passive products underpins the development of NZX and the broader public market while supporting several of our key strategic initiatives. These businesses are important for delivering earnings growth."

Adviser Simon Hassan, now consulting and chair of the FInancial Advice NZ certification committee, said Elevation's criticism was fair.

"It's a conflict of interest for the NZX to operate a funds management business."

He said concerns that, if the passive funds were sold to an active manager they might be shut down, were probably unfounded.

Tags: Elevation NZX

« Harbour homes in on real estateFSLAB regime not expected to fully take hold until mid-2022 »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

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