[Weekly Wrap] TOWER sales start

We have some meaty issues in this week's Wrap, but before we get to them there is a bit of news out.

Friday, November 2nd 2012, 9:07AM

by Niko Kloeten

First up TOWER has sold its health business to an Australian firm which does quite a bit of direct sales. The story is here and we will have an update later on (all going to plan). If you have any questions for the new owners flick an email to editor@goodreturns.co.nz and we will see if we can get answers.

A source suggested earlier this week that this deal was imminent - seems they were correct. The other tip was that Fidelity are talking to TOWER about acquiring its life insurance business, and maybe KiwiSaver. Watch this space.

Also in the news we have a "Life Insurance company of the Year" from last night's insurance industry awards - not to be confused with the NZ Music Awards which were just down the road.

This week saw SIFA members debate the future of the organisation, which brought up the wider issue of what will happen to owner-operator financial adviser businesses over the next few years.

The organisation has seen its membership drop by 50% in the past five years but is looking to reverse that slide. However, according to prominent SIFA member Murray Weatherston, what will determine the future of SIFA is not what it does or doesn't do but rather the state of the market for sole practitioners. A common complaint is that regulators don't understand what regulations such as the new anti-money laundering requirements cost these advisers, who don't work for big banks or insurers that can absorb the cost and have specialist people to deal with compliance.

And in case financial advisers don't have enough headaches, they could face new competition in the form of stockbrokers. Pathfinder's John Berry has outlined his view on the future of fund management in New Zealand and he has predicted that pressure will come on stockbrokers' traditional revenue stream as brokerage fees come down. This, he said, would result in a change of focus with more emphasis going on financial advice and funds management.

Meanwhile, the battle for control over the LM Investment Funds reached a conclusion yesterday. We have a new story on this in the pipeline.

The saga has some parallels to Elevation Capital's bid to remove Fisher Funds as manager of Marlin Global and wind up the company, a proposal that was rejected by investors despite receiving support from the New Zealand Shareholders' Association.

Amongst our Poeple news we have a new chief executive at the AAA; and OnePath's Mark Hattersley has already popped up somewhere else. Details in PEOPLE.

Lots of new jobs on the site too. See what's on offer here

Also this week, AMP launched its listed infrastructure fund in New Zealand, while warning that not all ïnfrastructure investments are alike. It will be interesting to see what sort of response the fund receives from investors (and financial advisers), given what appear to be favourable market conditions for this sort of investment.

Another event this week was the Meet the Managers forum, where Ric Ronge of Pengana Capital discussed the future of the resources sector and said the future looks good despite the current uncertainty. One interesting statistic was that one-third of forecast copper demand in 2025 hasn't been accounted for yet. It may pay to attach a flamethrower to your hot-water cylinder...

In insurance news, the number of New Zealanders with health insurance has remained static. Also, the Financial Services Council's claim people don't know where to turn for insurance advice has been rejected by those in the industry.

And in mortgage news this week, Kiwibank has had its credit rating cut, BNZ has become the latest bank to announce a big profit increase and the OCR has been tipped to rise as high as 5.75% in the next few years.

Have a good weekend.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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