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.”
Want to read the full article?
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
Latest News
5 min read
5 min read
Latest Comments
FMA wants clearer fees
@first time caller - I can see the complexity you highlight, but as above, investors should be able to see what they are paying without having to reference multiple documents. Investment admin can track and report deductions for tax, withdrawals, fees et al, would be /should be straightforward to aggregate advice fees into costs at member level... at least I hope so.
6 hours ago Goldcard
FMA wants clearer fees
@goldcard - how would you propose that a fund manager calculates the TER to include adviser fees given not all clients pay them and different advisers charge different fees, not to mention some advisors charge different fees to different clients? The advice fee gets disclosed in the adviser's disclosure statement and the statement of advice, so the client can add that to the published TER of the fund they are invested in to see how much they are paying overall.
1 day ago First time caller
FMA wants clearer fees
Schedule 4 of the FMCA regs 2014, particularly clauses 2(1) and 53(3) provide the basis for excluding individually charged advice fees from the statutory TER. This was introduced with the best of intentions, but now it is little more than an invisibility cloak for deductions from member accounts.
1 day ago Goldcard
Ideas for reforming KiwiSaver
@Ross The evidence is pretty clear on that. When advisers work in the best interests of their customers, as opposed to putting their customers into the products that pay them the most, outcomes are improved. (Makes sense doesn't it? Financial advisers go from sales people for fund companies to client fiduciaries.) It might reduce access, but does someone with $50K in a KiwiSaver really need investment 'advice'? A risk profile questionnaire or similar is a much better way to help consumers get into the right fund, i.e. move from a Balanced Fund to a Growth Fund. Why have more developed investment markets, e.g. US, UK, Canada, Aus, Netherlands etc. have banned adviser commissions from fund providers? I'd also add that there is a large group of KiwiSaver customers that are paying someone an advice fee without getting anything beyond a cursory email once a year in exchange. As @Paul says, it's 'easy money' for advisers...
5 days ago Market Commentator
Financial advice complaints down, but still some concerns, FSCL says
Aside from other questions I have on the inheritance/trustee case, what was the trustee company 'guilty' of to make them liable for the loss? Was it negligence, breach of contract (presumably not), was the trust in breach of its fiduciary duty? Where is the evidence? What is the justification? My understanding is Trusts and Trustees must act prudently and soberly in protecting a beneficiary's interests and does not extend to taking undue investment risk.
How can 'advice' or investment decision be condemned simply on the outcome and with the benefit of hindsight?
The benefit of hindsight can never be the determining factor in liability for inherently uncertain and unforeseeable outcomes, such as investment returns.
If the trustee company had put her money in a growth fund and that had suffered losses over the period compared to a balanced or conservative fund, I have no doubt the trustee company would have been found to have taken too much risk and would again be making good the 'losses'. This cannot be fair, reasonable or just, it condemns advisers to being 'damned if they do and damned if they don't'.
5 days ago Steve Wright