Commission remains evergreen issue

Weekly Wrap: A round up of all the top financial planning, investment and mortgage stories during the week.

Friday, July 27th 2007, 1:24PM

I spent the second half of last week at the recent IFA Conference being held here in Rotorua – The Home of Good Returns.

I have only ever missed one of these conferences since they started in the late 1980s when the association was the IAFP. That leaves me well placed to make some comments. As usual the event was well run, and the new Events Centre is a fantastic venue.

There were a number of good sessions, however I felt some of the key topics like tax (both on investments and insurance) were missing. Also absent was a good update on the association, adviser issues and regulation. The head of the IFA's Australian equivalent, Joanne Bloch, gave delegates some good ideas around the issues advisers will face with regulation.

No doubt some will have a go at me for being critical, but it is useful to comment as it highlights the importance of ASSET and Good Returns as key sources of information for advisers and broader financial services industry.

The SWOT analysis of the industry was useful too, if only to highlight that charging commission is an evergreen issue with no conclusion. We cover the debate here on Good Returns and I encourage you to read it.

Another theme, which is new and a little worrying, is what is happening with some investment products. This is what I talked about recently. That is there are some real issues developing around credit products. A number of delegates raised this with me during the conference and it is something we will continue to keep tabs on. One story on this topic during the week had the Absolute Returns Association suggesting hedge funds weren't for direct retail investors. Another piece in depositrates.co.nz touches on the issue too.

Finance companies was another area where there have been concerns. There was only one session at conference about this and it was more about S&P and its ratings. It seems to me there is a real issue developing around liquidity and rates.

We also ran a story last week regarding further consolidation in the advisory industry. The Grosvenor-owned company Tranzact has bought into another couple of firms and tonday we have news of another Australian company doing deals in New Zealand.

The key People announcements this week include a new equity analyst at Tower, BT's appointment of a new manager and also details of the new working group looking at adviser regulation and APBs. Full details in People.

It's no surprise that the Reserve Bank has dominated mortgage news during the week. Jenny Ruth reports on the OCR announcement and you can see all the rate changes here. ANZ has been the first bank to move its floating rate up to 10.55%. ASB has followed, increasing fixed rates too. Expect the others to follow closely behind.

Our main KiwiSaver story this week is from the conference where John Key suggested that earnings on savings should be exempt. If that's National's policy then it's a big change.

The current Special Report is the Kauri Notes from Savings and Loans. Read about this capital protected offering and Merrill Lynch's involvement in the Special Report. Also there is a roadshow for advisers on the product this week. Details have been posted in the Diary.