[Weekly Wrap] The gloves are off

There's nothing like a good stoush and that's what we have had over the week or so with DNZ - the old Dominion Funds property business which was associated with Money Managers.

Friday, December 4th 2009, 4:00PM

We have run a number of stories during the week criticising DNZ's $140 million IPO as it seemed incredibly unfair to existing investors. The story has gained a fair bit of traction, especially as MMG (formerly Money Managers) fought the IPO aggressively.

Late last night MMG and others could rightly claim victory as DNZ pulled the IPO, postponing it until next year. What will be interesting is to see what changes are made to the offer.

Commissions have also had a good billing this week, including a piece in the Sunday Star Times which looked at the issue. As I said in that article, "fee-based advice is no route to a Utopia of investment advice".
I look at this issue some more in today's Blog on Good Returns. I'm also concerned that sharebrokers have been ignored in this debate, and the majority of people who invested in dud finance companies did it off their own bat, not through advisers.

Have a read and comment here.

We also asked AMP New Zealand this week if it was going to follow the lead of its Australian counterpart and move to a fee basis. You can see what they said here and make up your mind whether it is moving to a fee basis in New Zealand.

Another story which has received a number of comments from readers is about the definition of what an independent adviser is. As many old hands will know, very few advisers are truly independent and I had often thought the term had become redundant in the industry. This is a topic which will surface and be debated some more off the back of the Code Committee's work.

Monday saw the release of the independent report in the Allied/Hanover deal. It wasn't a great surprise that the report's authors and the independent directors recommended the proposal. What was interesting were the comments that it's either the deal or receivership. Also, yesterday Allied told brokers it was confident it could do a better job at collection than Hanover. I guess time well tell on that one.

The meetings to decide the outcome of this proposal are still some time away, but we are hearing confident noises around the place that investors will give the required support. In this blog I outline Seven Reasons why Allied's deal will succeed.

There was a simple message to insurance advisers this week: "Sell as much level term insurance as you can". That's the advice Fidelity Life chief Milton Jennings gives this week as we look at the effect life insurance taxation will have on premiums next year.

Meanwhile, our opinion piece explores the need for variation with insurance and looks at how 2010 could be the catalyst for innovation with all the regulatory changes to be made.

On the corporate activity front we finally saw the sale of the PLAN mortgage group this week. The buyer was Ray White's Loan Market business which now makes them one of the biggest players in the mortgage broking space.

And finally some good news on the finance company front. Dorchester says it is looking to come out of its moratorium and Strategic is about to make its first payment to investors, plus comments that the market isn't as bad as it was.

For this and all the latest and best investment news visit www.depositrates.co.nz.

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Have a great weekend
Philip

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