[Weekly Wrap] Pass the parcel

The top two stories this week have been the selling and reselling of the Equity Investment Advisers business and the IFA elections.

Friday, May 16th 2008, 4:12PM

Yesterday we sent one of our reporters along to observe the IFA Council meeting for a number of reasons. It was a historic occasion – the first election of a president. We aim to report on important events in the industry and it was a good way to build relationships with the IFA.

Although we have been invited to council meetings previously – yesterday our reporter was banned from attending.

That is a bit sad really. But I am heartened to see that the new president Lyn McMorran has talked about restoring lines of communications and being "open and available". Here at Good Returns and ASSET we welcome her goals. Our phones aren't off the hook!

What's happening at Equity? Equity is an advisory firm based in Auckland which was owned by Dorchester until last Friday. A week ago it announced that the business was sold to former Spicers adviser, Stephen Rogers.

Then, early this week, it was announced that a subsidiary of Viking had bought it, leaving Rogers with a handsome profit for a couple of days ownership. (Who says it's hard for advisers to make money these days!)

Where this story gets fascinating is that Viking is the investment company of former DPC founder and managing director Brent King.

Viking said in an NZX announcement that it had expressed interest in buying the business when it was first offered for sale but, "for reasons unknown, Viking Capital was excluded from the sale process at an early stage, which we could not understand."

No doubt this story has more to go.

An area of the market which has been very busy (with rate changes anyway) has been home loans.

The past week has seen plenty of home loan rates fall, some by considerable margins. The main protagonists have been the banks, which have dropped rates for terms of six months to four years. The biggest cuts have been for shorter-term loans, with some rates down by 55 basis points.

These cuts have brought about a key change in the market. Up until now five year rates had looked attractive because they were the lowest on offer (albeit they are at historically high levels). Now the shorter-term rates are on par with them and in some cases lower.

In the key two-year fixed term the big banks are sitting at 9.40%. BNZ is offering 9.29% for its Classic and 9.49% for its Standard rate. Kiwibank took the lowest position on the table today with a two-year rate of 8.99%

For our latest Home Loan Report, please click here.

Blog: Its raining rate relief!

A sudden and unexpected easing in home loan rates this week is to the property market, what a bit of rain is to drought-stricken farmers. [more]

On the other side of the fence we have had Dominion Finance post its latest results and South Canterbury announcing it is looking to raise $100 million from the market. Both stories are worth a read, particularly Dominon's where the company explains its position on not getting a rating and reveals its reinvestment rates.

This week's Insurance News reports on growing support of the new software package for risk advisers, and includes news of a new BDM in Wellington for Fidelity.

Last week's Blog on mortgage brokers getting into insurance has provoked a number of useful comments. You can read what others are saying here.

Other appointments this week include a new economist at Arcus.

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