Two Code Committee members resign

So two of them got fired. Why wasn't it a clean sweep of the advisers with Mike Staahl a director of NZ Financial Planning whose plan was rated disappointing?

Advisors have been ripping Joe avaerage off for years. I was misslead and so were friends. Put money into a loss making scheme, that, with the help of a calculator and the advisor, was going to make a very good return. The industry needs to be sorted.

Whilst on Public Confidence, is Ms Cotton related to the Chair of Fisher Funds Management, whose 'Growth' Fund has 63c remaining of each dollar invested two years ago? Just slightly worse than Hanover's estimated pay-out.

New developments in the industry and also costs of compliance have now swept completely away the figure of the independent advisor.
Till someone doesn't solve the knot on what the advisor is supposed to live off, the road is open to have advisors that are ONLY sales reps of the asset management schemes of their parent organisations NO MATTER HOW GOOD OR BAD THOSE SCHEMES ARE.
And Joe Bloke has also to reply honestly to the question:
"Would you be willing to pay an adequate fee to a serious pro to manage your money enabling him to be YOUR adviser ?"
Till that is not solved and reoplied, we are wasting each other time and taxpayer's money in useless commissions.
The key is : "He who pays the fees, drives the cart" so far the fees are paid from the product issuers...so what you want from advisers??? Ain't they got to live ?
If you want them competent and independent, pay them a fee that enables them to live and study to be oon the cutting edge..but prohibit the product issuers to pay them or worse...TO OWN THEM OR TO EMPLOY THEM.
The issuers flocked to buy the adviser's businesses, it is so easy to own a passive distribution channel and feed them any kind of indistinguishable stuff...provided is home branded.
Let's be serious....

So 2 members of an influential committee "fall on their swords" [as the ad goes - yeah right!].
The consumers survey was designed and focussed on finding fault - they always are and it's a pre-requisite for these instutions.
There is no doubt that what is happening with the Financial Services arena is needed and important and will help to give some much needed structure to the industry and it is a shame that those involved here have gone - they are at the sharp end and could have given invaluable input to this Committee - what a shame the Chairperson did not have the courage to tell them to stay and create something special!
If we the public believe that all that is happening will make all things better and protect us against all things we are in for a big shock because it won't!
It will help significantly but it will not remove all the issues and actually as buyers we should always take some responsibilities for the actions we take and the decisions we make - please let's not become a blame culture in NZ - look at the USA and the UK if you want to see where that road takes us!
I wish the Committee well in creating the building blocks of a new start!

If you provide 33 individuals with a specific request you may get some variance. What we have is almost half of those approached not providing a written plan - which appears to have been the objective sought by Consumer. Questions have to be raised about the requests made to those specific individuals. If there are 5000 advisers working in the industry the sample is less than 1% - well within any margin of error. The survey is rubbish.
The only thing worse than a bad survey is what has been drawn from that survey - one, that somehow the way individuals are paid had something to do with it; where was that measure? And two, that only independent advisers can provide acceptable advice - once again where was that measure. More rubbish.
The findings are only compounded by the poor journalism of Mary Holmes who managed to garner both of these points from the poor survey.
The survey did more damage than good. If indeed it was a fact-finding mission from the powers that be it is indeed a poor reflection on them.

I would like to hear more from Bruce - as it is a refreshing reminder / wake-up-call about how consumers are really feeling.

Come on industry - lose the rose-tinted glasses and start paying attention to investors.

So what exactly are "advisors"? If they were as good as they say then they wouldn't have to be advisors - they would put their money where their advice is and make their living that way. Financial planners can suggest proportional allocation of funds to minimise risk, but to take advice as to where to put your money is no different to taking advice from tipsters on the racing pages.

Bruce & Independent Observer are at least two of the comments which reflect a disenchantment with the services provided by financial planners.
There will always be lower class members of any group. Many of us will have experienced poor tradespeople, or medical advice and so on.
The issue is whether there is in fact a relatively high number of poor advisers...or otherwise.

Surveys can be quite useful if the methodology is correct and competent.
The 'outcomes' are important, and if they are bad, they stick for a long time.
Much like the age-old saying, " it takes a lifetime to build a top reputation...and only literally minutes to ruin it..."!

This Consumer Mag survey has appeared to result in lasting damage to the financial planning profession, without doubt.
I believe in the benefits of surveys, and I would actually like to see this area expanded on.... rather than lots of energy expended on picking holes in this one.

The next one needs to be on the various fees charged, and the question of "supposed value-added."

eg: The likes of the larger groups such as Money Managers have charged what they claim is a "monitoring fee" of 1% pa.
If you compare the performance of a monitored portfolio to that of an UN-monitored one, the monitored portfolio performs precisely 1% pa less than it's UN-monitored 'sister!'

Would this tend to suggest that "monitoring" is not actually applied?

That is just one example of a fee which needs to be surveyed.
Do you 'get my drift?'

Other fees which can be added to the list are those which are more deeply 'hidden' inside related party transactions, where several in-house funds are used to filter investors money through to the ultimate fund, and while each 'little' fee along the way may be small, their sum total actually can amount to quite a permanent loss to the investor/s.

Roll on the surveys I say.
However, unless advisers (& investors) offer some advice on how any surveys are conducted, the barrow-pushing media divisions will retain their power and control, and as has been proven....to the long-term detriment of the financial planners.
This would be of particular concern to those who have spent such a long time building their reputation...only to see it undermined in one short foul swoop.!
Michael Donovan 'Old' Money Manager.