3 Items to consider.........
At a private function earlier this week, an industry colleague reminded me of a blog I sent out on Trevor Slater’s departure from FSCL in 2015. I posed the question whether Financial Advisers would regard FSCL’s value proposition in the same light in Trevor’s absence.
Apparently, the question was appropriate – despite a challenge being presented to me at the time – as Fairway has since recruited Trevor Slater after his stint at the now Strategi-owned IDS Ltd. Progress for Fairway since the new appointee arrived has been significant and the Adviser community has responded positively – there is no substitute for quality.
As John Ruskin opined –
“It's unwise to pay too much, but it's worse to pay too little. When
you pay too much, you lose a little money - that's all. When you pay
too little, you sometimes lose everything, because the thing you
bought was incapable of doing the thing it was bought to do. The
common law of business balance prohibits paying a little and getting a
lot - it can't be done. If you deal with the lowest bidder, it is well
to add something for the risk you run, and if you do that you will
have enough to pay for something better.”
In another item, the news from the Royal Commission of Enquiry in Australia continues to reverberate throughout the financial services industry with momentum gathering for the Vertically Integrated Organisation (VIO) structure to be abandoned. Repercussions for some major Australian organization remain to be seen, as does any carryover of the investigations into the New Zealand industry. Further, there is growing pressure for individual licensing to be introduced in Australia as entity licensing is being generally regarded now as a failure, despite the apparent robust nature of the Australian regime. It is indeed ironic that NZ moves toward a proven failed model of regulation, apparently in the belief that the Australian experience will not be repeated here.
Finally, the UK media reports a new scandal in the selling of Payment Protection Insurance (PPI) by major British banks over recent years. The figures being quoted are, to say the least, eye-watering with £18bn of inappropriate sales estimated and with commission percentages of 76% cited as being commonplace. Credit Card Repayment Insurance is a staple part of the major banks’ credit card packages in New Zealand and the product needs to be closely scrutinized. There has also been some activity on social media around the issue of banking practices – perhaps the mainstream media will also pick up on this thread and review whether a formal enquiry is needed.
I can’t help thinking that the redoubtable Ms Rowena Orr, QC, Counsel Assisting the Commissioner in the Enquiry in Australia, would be inexorably thorough in digging deep into the issues mentioned above in NZ.
However, an RBNZ/FMA team is on the job, so we should keep an open mind and await the outcome of the current investigations.