News
News round-up
Monday 13th of July 2009
ING investors reach end of timeline
Investors in ING’s two CDO funds have reached the end of the timeline for accepting one of three offers on the table.
ING and joint venture partners ANZ gave investors in the DYF and RIF funds three choices which close today (July 13), in the hopes of staving off further legal action.
The options available to investors are:
- Cash-out under the same terms as previously, ie a unit price of 60c and 62c for the DYF and RIF funds respectively
- A five-year option where investors can sell units at the cash-out price with the proceeds transferred to a no-fees ANZ on-call account with an interest rate of 8.3%
- Hang onto existing units in the hope the underlying investments will improve.
Code Committee due to be announced
The Code Committee for new adviser regulation is to be announced any day now, with the last interviews wrapping up last week.
It is also understood some advisers that applied for one of the seven to 11 part-time positions on the committee have been receiving rejection letters.
The committee, headed by the interim Commissioner of Financial Advisers Annabel Cotton, is due to have its first meeting at the end of this month to kick-start the regulation process.
Call for Marlin to delist
A Marlin Global shareholder is lobbying for the company to be delisted and transformed into an open-ended fund, as a way to lift the value of its units.
Garry Cross placed newspaper advertisements promoting his idea to convert Marlin’s publicly traded shares into units which would change hands at their net asset value.
Marlin, which invests in overseas shares managed by Fisher Funds Management, has seen its shares consistently traded at a discount to NAV (98.3 cents) since its October 2007 IPO.
However, the company did not think the initiative would come to anything.
Slow but steady for insurance industry
Insurance clients are looking to cut costs, but some are increasing coverage for fear of inability to withstand an income shock in the current economic environment, according to the latest BNZ Monthly Confidence Survey.
Many insurance advisers who responded to the survey were noticing more clients taking up risk cover like redundancy, life and income insurance.
“We are finding that there is still strong interest in personal risk products but investments are a lot tougher. People seem to be very aware of risk at the moment and this is making them look at things like life and income insurance and getting the appropriate policies and structures in place,” one respondent commented.
Another trend was seeing clients cutting premiums and deceasing cover, with some advisers commenting their “size of book deteriorating”.
“Existing insurance cover is being relooked at by clients to try and cut down the premium they are paying,” another adviser commented. “Customers VERY careful with their spend but careful to remain insured.”
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FMA outlines its latest expectations for advisers
Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
2 days ago Steve Wright
FMA outlines its latest expectations for advisers
Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood.
Ironically, my last sentence was not likely read.
2 days ago Backstage
FMA outlines its latest expectations for advisers
All things said are great aspirational goals for a great financial advice industry, it mirrors what both the legislation and the code requires.
However, like most things discussed it talks about what's expected not how it's done. The hardest aspect of financial advice today isn't what it is, it is how it is done.
The how only comes from those that have done it, the how is only provided with examples. Guidance documents that spell out what's required along side how it it done.
We’re still dealing with the same issues we started with in 2021, figuring out the how. And figuring out the how in every advice business is consuming resources that could easily be shortcut by the FMA demonstrating what they are expecting.
It's not about “do it this way” its about this is the sorts of things we’re looking for.
In the absence of standards and expectations, guesswork prevails. That represents significant risk to FAPs and the result is onerous overcooked advice processes for multiple advice operations and undercooked she’ll be right for single operators focused on getting the work done.
Both approaches have potential for harm and as its been said earlier, leaves advisers open to explain they haven't been speeding with the authorities have pulled them over.
The advice industry needs guidance on the how we know the what already.
4 days ago Jon-Paul Hale
Who is responsible for notifying policy changes?
Sticking an oar in, while we have “service” requirements the expectation that an adviser is responsible for discussing said change is relying heavily on assumption.
1. That the client hasn't moved and contact details haven't been updated. It happens more often than many think.
2. It assumes there is a servicing agreement in place to provide service. Remember the requirement is to scope service not provide it. A client deciding to have ad-hoc service on their request is a legally valid position to have.
3. If there is a service agreement that's realistic to what is expected, how long does the adviser push the issue to have the discussion before moving on with everything else they have to do? Again, a point that is not clear in the guidance to date.
The challenge of the present rules is the adviser is responsible for ensuring the client understands the advice provided.
How do you ensure you're covering this if a client doesn't engage despite genuine attempts to manage it?
There's still a lot of “what if’s” in this whole are we’re only going to have clarity on once someone is taken to task about it.
But first we need to have clarity on what ongoing service actually is, because right now demonstrated by the direct providers a letter once per year with a please call if you want to discuss is the current minimum…
4 days ago Jon-Paul Hale
FMA outlines its latest expectations for advisers
To correct errors in my previous post: "policies, templates, and controls" should read "policies, processes, systems and controls", and "is more conductive" should read "is more conducive".
4 days ago Paul Flood