Friday 8th August
Regulation grinds a notch closer

Hi

Well, we’re back with a new plan for adviser regulation. It seems this latest proposal is getting closer to something that people can live with, although I note that the FAANZ grouping is, at first take, only luke warm on the idea.

Good Returns has full coverage of the changes with a story outlining what is now being proposed, reaction from the industry, and a full copy of the Select Committee report plus a Blog and reader feedback.

Finance company news continues to be a theme this week with Strategic yesterday freezing redemptions and stopping new investments. As reported previously Strategic’s management is looking to execute a management buyout with wholesale fund Bank of Scotland (HBOS) taking a stake in the business. We understand due diligence has been completed and management are now waiting for a decision from Edinburgh. The outcome of this transaction, one would guess, is critical to the future of the company. The whisper is that a decision may be known today or early next week. That’s one we will watch with some interest.

While regulation of advisers is an on-going theme we haven’t heard much about the regulation of the non-bank sector. One development was the decision yesterday by Axis Ratings (formerly Rapid Ratings) to withdraw from the market. This is no real surprise as there are far fewer companies to rate, the business never really got traction and officials seem to have little enthusiasm for local rating organisations. The changes indicate that Standard and Poors’ will become the default rater of non-bank organisations in this country.

A story Good Returns ran on Wednesday should make advisers sit up and take notice about the impact of KiwiSaver on their industry. It was the story that said something like $5 billion of 'lost' Aussie super money could come into the industry if a proposal between the Australian and New Zealand governments comes into effect. Under this proposal money in the compulsory Australian super scheme could be transferred back to New Zealand as long as it goes into KiwiSaver accounts.

Change of plans but are we there yet? So we have yet another change of plans for regulating the financial adviser sector. As we reported yesterday the latest recommendations from the select committee have a couple of key features. [more]

In our Insurance News section this week we have more detail on AXA’s half-year results, the rollout of Tower’s new illustration software and also Russell Hutchinson’s latest opinion piece: Did your first love scar you for life?

Also, AXA’s former head of marketing has taken on a new role at a health insurance business. The other highly notable event in the People section was news that Simon Botherway and Paul Glass have stepped down as directors of Brook Asset Management. (What can that mean?)

This week we have the latest market reviews from Tyndall and London-based economist Andrew Hunt. Click here to see how the numbers stack up.