Weekly Wrap: Santa is coming to town

One of the things I have observed over the years is that the government and others tend to have a habit of giving the financial services industry big presents at Christmas time.

Friday, December 7th 2007, 3:49PM

Like all Xmas presents, there are some you want and some you can do without. Under the tree for advisers this year is a new bill before Parliament regulating advisers, plus a brand new set of disclosure rules to play with in three months time.
Good Returns is working hard to keep you up to speed with these developments and we have a few sneaky peeks at both presents on the site this week.

Advisers, being people with an interest in amassing rather than dispersing money, may be pained to see that officials reckon it will cost between $1,000 and $5,000 to belong to an APB. On top of this advisers will no doubt be urged to join an association as well.

This means a significant hike in professional costs for advisers.

We reported on the state of the Institute of Financial Advisers accounts during the week and with another year of losses it will be fascinating to see what happens here. One could assume that to get back into the black the association will have to again increase its fees?

The state of the IFA's accounts induced a Blog.

Disclosure and disclosure
I do have to express my surprise again at the IFA's annual results and its apparent lack of disclosure to members. [more]

The other big news is the Capital + Merchant collapse. I have read the judgment where the company tried to stave off receivership. It is fascinating reading and shows the company had a poor quality loan book, had the same cash flow problems as Bridgecorp (capitalised interest) and, according to the judge, unrealistic expectations about its viability. The judge even commented that company has been "operating in name but not substance for some months". You can read more about the judgment at depositrates.co.nz

While many other asset classes have development PIE compliant funds to take advantage of the new rules which came into play on October 1, it has taken until this week for the first tax-efficient cash fund to be launched.

In depositrates.co.nz we have an update on the latest rate changes: Banks play cat and mouse and some other news.

Also this week KPMG launched its latest report on finance companies. While the report provides good analysis of the sector, it also takes a go at advisers and how they have operated in this sector. To see what they are saying read: Advisers in spotlight over finance company collapses.

Mortgage and economic news this week was dominated by the OCR announcement yesterday. Reserve Bank governor Alan Bollard didn't deliver any presents to home owners, but suggested these may be on, in the form of rate cuts, next Christmas. We have a report on his statement here.

In other mortgage news ANZ/National has picked up market share recently and rates have remained relatively unchanged during the week.

Our main appointments this week are changes at Sovereign and Bernard Long's move away from being Goldridge CEO to being an adviser.

We have a new Special Report this week – it is the ABN AMRO Hindsight fund. This is a capital protected fund which tracks BRIC economies. Find out more here.

The ABN AMRO Global Equities Hindsight Securities are a capital protected investment which track the BRIC economies. The securities are ideal equity investments whether the markets rise or fall. For more information click here.

If there was ever any doubt that advisers should be thinking about KiwiSaver then it is the latest enrolment numbers. According the government more than 300,000 Kiwis have joined up to the scheme – far surpassing expectations.