[Weekly Wrap] How much is advice worth?

Despite a short week due to Easter, Good Returns has noticed no shortage of activity in the financial adviser space.

Thursday, March 28th 2013, 12:31PM

by Susan Edmunds

The most-commented piece of the week was on Clayton Copplestone’s comments about fund managers and advisers needing to provide quantifiable value to investors.

He said advisers needed to provide returns significantly above what their investment clients could achieve with low-risk products.

Coplestone reckons investors need to be offered a premium of about 6%, net of fees, to make it worth their while to hand over their cash. Comments quickly rolled in, telling Coplestone he was dreaming and such returns were not possible.

Also on Monday, we reported on the news that most of Perpetual is to be sold.

This week, I had a meeting with Patrice de Marigny, Sovereign’s general manager of adviser distribution. He is extremely buoyant about the industry and told me that advisers had nothing to fear from banks – basically, that it’s just a matter of adapting and working with new types of competition.

LM Investment Management’s administrators held a phone conference with advisers this week.

It was a slightly jumbled affair, which started 10 minutes late. What came out of it is that the administrators, FTI Consulting, think they needs longer than normal to come up with a plan for LM.

Normally, administrators would report back to creditors in about a month on whether a business is salvageable. In this case, the administrators want three months.What happens to adviser commissions is still unknown.

On the mortgage front, there’s been a lot of activity out of the Reserve Bank this week. Moves to increase the amount of capital banks have to hold on housing loans have led to suggestions that just means higher interest rates, particularly for high LVR loans.

There has also been some movement in the people space.

Is there anything that you think we should know about? Email editor@goodreturns.co.nz

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