Financial Services in a Jam? Try Honey

Did you ever sell a product that can kill people?

According to a quick web search, within the last few weeks there have been 17 confirmed cases of Tutin poisoning. You get it by consuming honey where the bees have been feeding on Tutu bushes. The victims included a 70 year old woman, a mother and her three year-old son, a tourist, and the most well-known case was for a couple and their son, one person was in hospital for six days. The symptoms include seizures, vomiting, giddiness, and increased excitability. As little as a teaspoon of toxic honey can affect the human nervous system and it can be lethal – although no one has died in many years. It is entirely preventable. No commercial honey growers will have Tutu poisoned honey. 

Now, whatever you might say about one of the many failed finance companies, or even, say BlueChip, none of them poisoned their clients. We shall not contemplate directly how the word poisonous might be applied in a broader sense…

Of course, long gone are the days when the task force on adviser regulation described the industry as ‘not in crisis’. Today it is in crisis. The extent of company failures and the scramble for banks large and small to shore up their balance sheets and issue less lending is enough to tell us that. The constant news of another group of investors, another receiver, and more threats of legal action speak volumes. But I remind you once again – nobody got put in hospital by a serious nerve toxin sold to them by a financial planner in recent months -not that I wouldn’t put it past some that I’ve met. They are just too busy making money.

The financial services industry is going through an incredible period of reform. KiwiSaver, Tax, Product and Providers, Securities Markets, and Adviser Regulation are the major areas – but you can throw in tougher anti-money laundering measures and the recent re-vamp of the credit legislation as well. 

Real estate recently got regulated directly – no friendly “Approved Professional Bodies” for them. The deepening financial crisis may yet see such an approach taken with our industry. 

But maybe bee-keepers are a nicer, cuddlier bunch, so they get different rules. In fact, pre 2001 there were tight controls on honey production. But in December 2001, this was weakened substantially. While a “Harvester Declaration” was introduced, requiring beekeepers in the risk areas to declare their honey was harvested safely. Hobby beekeepers, it was decided, do not have to sign the declarations if they sell locally. How this makes it safer, it is hard to say given the recent series of poisoning cases. Where is the spirit of full disclosure? I know plenty about financial services, and I like plenty of disclosure. I know naff all about honey – and I definitely want to know a little thing like whether it’s poisonous – or could be – written in quite large letters on the pot.

The poisoning was even predicted. A Hort Research report warned an outbreak would be a consequence of the new rules – warning of a "loss of confidence in honey” and that “sales and price will crash". Much like sales of inner city apartments, or finance company debentures perhaps. 
A newspaper almost braying for the blood of directors of a failed investment firm thought little of the poisoning of holidaymakers, children, and tourists (there’s a few people’s livelihoods in that too you know). They noted that although it could be fixed through ‘a return to the more restrictive regulations’ there was ‘little call for this’. Even, laughably, that ‘most people seem able to differentiate between the small-scale supply of the toxic Coromandel comb honey and the product they buy.’ 

Frankly this beggars belief. 

The investors in some apartment developments couldn’t seem to differentiate between their investment and something a little safer down at the bank. Yet these same folk are expected to know that in the autumn bees in some specific parts of the country may make poisonous honey, and this need not be disclosed? Huh? I didn’t know that.

I wondered - Isn’t there a bit of a double standard at work here? 

It appears I am not alone in this suspicion. Commercial honey producers were quoted as ‘frustrated’ and ‘knew it would happen’ but because the hobbyist is a ‘green and happy’ person there's ‘no regulation whatsoever’. Well that’s Okay then. If he’s a friend of Keith Locke’s and he’s taking his Prozac – let him be.

Will we get exemptions from new disclosure rules for organic investments? Or exempt KiwiSaver consultations from roadside stalls perhaps?
For the record: I support probably 98% of new proposed laws. Indeed, I have spent a lot of time helping clients with implementation. I took plenty of flack for saying I thought KiwiSaver was Okay – though like your humble author, it has its faults. But why does honey catch a break?
It’s even harder to justify when, to look at a small, local, financial planner, who has basically been providing a good service for donkey’s years – and has never hurt anyone. Many people like this will be driven out of our industry because they don’t want to work full time – and yet new requirements will make it impossible to remain accredited without a lot of extra investment. 

You know what I reckon they should do? Take up bee-keeping. Maybe they should sell their home-produced wares in Wellington. Until we can get a little consistency, that is.

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