[Weekly Wrap] Ownership changes in the spotlight

The issue which is really in the spotlight at the moment is ownership changes in the financial advisory industry.

Friday, April 20th 2007, 4:35PM

A couple of items this week pick up on the theme. One is an interview Good Returns did with MFS ceo Jason Maywald about his firm’s current buying spree.

A comment many people have made to us here at Good Returns is that advisers are getting inflated ideas about the value of their practices following MFS’s $52 million purchase of Vestar. Maywald makes it clear that there is more to this deal than just funds under management and price. The formula used for Northplan is not necessarily the one used for other firms.

Sticking with this theme Phil’s Blog discusses this further. While the Blog is called Advisers and Shoemakers, it could equally have been titled A load of cobblers for advisers.

Advisers and shoemakers
One of the things which has been fascinating to watch over the past couple of years is the effort fund managers and the like have put into trying to buy up distribution. [more]

Before we leave this theme we also look at what Grosvenor and its ASX-listed company Tranzact are up to in the market place.

I highly recommend all advisers read these stories.

One of the outcomes of pending tax changes is the treatment of passive funds. This week we have a story about AMP Capital’s latest moves. It has decided that in its diversified funds it will chop the allocation to passive international shares from 27% to zero.

Perhaps the biggest story of the week is in the home loan space where ANZ is preparing to slash the commissions it pays to mortgage brokers. According to the NZ Mortgage Brokers Association such a move will slash brokers’ income by around 25%. One key advisory group has described the result as “total mayhem”.

Also we have a fascinating look at what banks are up to with mortgages. The view expressed in the Good Returns Weekly Home Loan report is that discounting is over.

On the other side of the ledger banks, in particular, have gone crazy with increases to term deposit rates. There have been some significant increases which must be putting huge pressure on finance companies. Added to that online savings account rates for Westpac, RaboPlus and Kiwibank have all increased.

Also this week Hanover has secured a rating from international agency Fitch. Hanover is arguably the last of the big finance companies to get a rating.

Check out the details at www.depositrates.co.nz

Lots of new appointments at the moment. The biggest is the new job for Tyndall’s former boss Anthony Quirk. Our view is that top talent like this is always going to find a new job pretty easily.

The other interesting appointment is former Consumer’s Institute boss David Russell turning up on the board of an emerging financial services organisation.

The start of KiwiSaver isn’t far away and I get the impression that a number of advisers are finally starting to see there are some good, long-term business opportunities. In SuperTalk we have a story about Ricky Bennett’s firm employing a dedicated KiwiSaver adviser.

Also in SuperTalk is Michael Cullen’s latest speech on KiwiSaver and superannuation.