There are three significant reports about to hit the airwaves which will all have some impact on the financial services industry. On Tuesday afternoon the Financial Markets Authority/Reserve Bank conduct report on life insurance companies is due out.
My prediction is that it will be much more strongly worded than the previous report on the conduct of banks. It seems many felt that one was more of slap with a wet bus ticket, if even that. Also it will have a strong focus on commissions. The FMA has made its view very clear that it doesn't like commissions and wants changes. The Reserve Bank joined that party with its Monetary Policy Statement at the end of last year.
In it there as a graph which said that life insurance commissions in New Zealand were some of the highest in the world.
Their arguments often seem academic rather than founded in the practical reality of selling life insurance. Maybe a few of them should get out and have a crack at being an insurance adviser?
Also next week the Royal Commission in Australia is due to hand in its report. This, undoubtedly will have repercussions in New Zealand considering many of the large players on this side of the Tasman (banks, AMP etc) are Australian-owned.
If that wasn't enough it's likely the Tax Working Group's report will be released by the government some time soon. This is bound to create a massive amount of discussion right up to the conclusion of next year's general election.
Here's a bit of a preview. [Read on]
One of the interesting stories this week is that UDC plans to repay all its debenture holders by the end of this year, that means 8000 investors will potentially be looking for a new home for $922 million.
And on a sad note Jack Bogle passed away recently. We have a piece from Robin Bowerman in Vanguard Australia here.
Last week NBR journalist Rob Hosking died. For many years Rob was part of the Tarawera team writing for Good Returns and ASSET Magazine. Rob "became a distinctive voice in Wellington’s political and economic discourse, his coverage of events often laced with a mix of deep background knowledge and a playful turn of phrase," NBR publisher Todd Scott writes. He will be sadly missed.
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