Weekly Wrap: Do we need RFAs?
As we get closer to the silly season there’s still plenty of serious action going on in the financial advisory world. Niko Kloeten explains.
Friday, December 9th 2011, 6:13PM
The most controversial story on Good Returns this week was about IFA president Nigel Tate’s comment that there shouldn’t be Registered Financial Advisers (RFAs), only Authorised Financial Advisers (AFAs) - apparently there is no such thing as an RFA.
Although this was his personal opinion rather than that of the institute, he brought up an interesting point: that consumers could be confused by the AFA/RFA distinction. He also said advisers didn’t really have to do much to get registered, and questioned the way some products are categorised.
Another industry figure who always attracts a lot of comment on the Good Returns website is Partners Life chief executive Naomi Ballantyne.This week we revealed Partners Life’s estimate that it accounted for about 10% of new insurance business written in the September quarter.
Ballantyne says the business is evenly split between new policies and exisiting business, with most of the business appearing to come from OnePath and Sovereign. However, she says Partners Life won’t really affect Sovereign as it is not its competitor.
Regulation continues to be a hot topic and this week Good Returns covered a new initiative that will see the IFA provide Westpac’s AFA staff with training. IFA chief executive Peter Lee dismissed concerns the training would be up-skilling advisers’ competition.
The biggest story this week, at least money-wise, was the SFO laying 21 charges against five people associated with South Canterbury Finance. The SFO hasn’t named the five, although it’s reasonable to conclude Allan Hubbard, who died earlier this year after a car crash, won’t be one of them. You can see Good Returns publisher Philip Macalister discussing the case on TVNZ here.
The SFO is working with the FMA on the case, which involves the largest alleged fraud ever in New Zealand. Meanwhile, the FMA has finally completed the recruitment of its leadership team.
Australia is looking at widening its commission ban on superannuation advice but New Zealand shouldn’t follow suit, according to Mint Asset Management chief executive Rebecca Thomas.
While New Zealand’s big four Australian-owned banks all got downgraded last week, Heartland, which hopes to become a bank, has had its outlook upgraded by Standard & Poor’s.
Bad news for savers - Reserve Bank governor Alan Bollard is expected to leave the OCR on hold until at least the second half of next year due to continuing international economic woes.
Despite the low interest rates, New Zealanders are still piling into term deposits, meaning banks don’t have to rely as much on offshore funding.
BTW: The answer to the question is: hell yeah We need RFAs.
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