Weekly Wrap: A spoon full of sugar to sweeten Bridgecorp pain

The most fascinating story of the week is news that the MFS-owned Vestar group is planning some sort of package to appease investors who stand to lose money from their Bridgecorp investments.

Friday, November 2nd 2007, 3:24PM

The original story talked of a "compensation" package, however MFS is hotly denying it is compensation for losses. The tricky part is that it isn't saying what sort of form the package will take.

As imagined the news of any such package is being warmly received by investors and people like Chris Lee. Indeed, the way MFS ceo Jason Maywald described it to Good Returns is positive. His take on it, is that the package is designed to restore some investor confidence.

That is something which is sorely needed at the moment. Today's Good Returns story reveals there has been terrible fund flow figures in the September quarter. These numbers support anecdotal evidence I have been hearing around the traps.
It seems there are a myriad of reasons behind the poor numbers including lots of bad news in the fixed interest space (finance companies, credit crunches etc), but there are also positive things happening such as good KiwiSaver signup numbers, and the introduction of the PIE tax regime.

As regular readers will know I have been a little disillusioned with the way the whole advisory industry has been tarred following some troubles in the finance company sector. There is a real need to build confidence and investor protection. On the latter I watched with interest Helen Clark's much-anticipated cabinet reshuffle to see who would be the Minister of Commerce. Lianne Dalziel has remained in the job and there is some serious work for her to urgently do in this sector.

Memo to Dalziel: Give investors protection
One of the things I was looking out for in the Cabinet reshuffle this week was what happened to the Minister of Commerce.[more]

One story, which we have in SuperTalk, that is very significant is the Minister of Revenue, Peter Dunne, suggesting KiwiSaver should become compulsory.

The Good Returns Mortgage Centre has reports on what is happening with home loan rates. One of the big banks is hiking fixed rates (from tomorrow) and others are expected to follow. In around a month the two-year rate has gone up more than 40 basis points in many cases. These are big hikes.

The other main story advisers should read is further changes to commissions paid to brokers. Today's story highlights changes being made by Westpac, Sovereign and Bluestone.

Related to the mortgage world is what's happening in the housing market. ASB put out its regular housing market sentiment survey this week. Our interview with economist Nick Tuffley makes insightful reading. You can read it at landlords.co.nz.

Tax is a topic of the moment again this week. We ran a story on how the new FDR regime impacts returns on international shares and bonds. A full set of numbers to go with this story is now live in the Features section. These numbers provide some further detail on expected returns. In addition to that we have had some comment on FDR's impact on returns which we aim to publish next week.

The other tax story run on the site this week was a review of a new book which explains many of the tax changes. We know from reader feedback this has been hugely popular. To find out more about the book read this article. Details on how to order it are on the footer of the story (or just call Amy on 0800-345675).

The latest appointment news includes changes at Arcus and Mercers. You can read those in People.