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New Technology

The world's been changed by interactive media. Imagine having a relationship with someone without conversation. Difficult.

Yet financial services companies still talk about relationship marketing and yet have no real conversations.

Consumers are ready - it is the industry that lags. The proof? This post. It may be a poky screen, but, courtesy of my new JAMin telephone I am mo-blogging real-time, and loving it. Soon you will be safe nowhere!

A Tale of Two Tax Articles

Mary Holm continues her inexplicable crusade to create more unwilling converts the the proposed changes to the taxation of international investments in this article. Several things lead me to use the term inexplicable - Holm fails to explain what great problem this proposed change is meant to solve, and why this solution - for preference over the others proposed - is best.

Instead Holm provides us with a comparison of the effect of the tax change on two types of funds -

  • International index funds (very popular with investors, and suffer under the system)

compared with

  • International active funds (not very popular with investors, and will enjoy a modest improvement in tax treatment).

Yet she completely ignores that the greater problems with our tax system are probably around investment in property. She completely ignores the effect of the proposed tax changes on investors that hold international shares directly - and they are not all held by John Key. Lots of kiwis hold and trade international shares. When we worked with the National Bank to develop their online share-trading system we knew this was a crucial part of its functionality - and it has been a major factor in that system becoming the market leader.

The fact is that this is a band aid fix of a band aid fix. The current FIF regime is a nonsensical piece of a tax system. Within that system it is a lesser piece of nonsense. Going to the expense and effort of prioritising it above the other areas, and then replacing it with something equally non-sensical is simply a waste of time and money.

Defending it is a waste of Holm's talent. Especially given the comment in an earlier article by Holm that:

"All in all, I think the status quo is better. "

Why not make that message clearer, louder, and longer, and we can move towards more sensible proposals?

Diana Clement on the other hand, in an article buried on page 10 (which you can read here) of the same section of the paper has discovered yet another unintended consequence of the new tax - a disincentive to migrants.


How not to sell loadings, as identified by Ronald Verzone of United Underwriters.

"He believes that in order to get consumers to sign insurance applications, too many advisers quote unrealistically low rates. "Perhaps up to 40% of those who apply for coverage may not qualify for a company's standard rate. When an application is processed and all relevant medical information has been reviewed, it comes back at a higher cost than the original quote." Then the adviser has to go back to the customer with the bad news. While advisers can try to blame it on the underwriter, that does not stop the client feeling betrayed, disappointed, unhappy and angry. It is not very professional either. As well as not serving the best interests of the consumer, it ultimately does a disservice to the industry and the adviser. "The customer does not get the protection, the adviser loses a sale as well as the customer's trust, and the industry gets a bad reputation.""

Hat tip - Brian Klee.

TOWER share price

TOWER shares have consistently performed well since the arrival of its new corporate heavyweights on the share register and Jim Minto at the helm. Attentive readers might recall that I bought a few hundred shares  when they were really, really low, as an example of performing a share trade online. Now I wish I had bought more. A recent article highlights a substantial rise over the last few weeks which has little corporate news to support it. It is obviously fuelling speculation.

Understanding the new marketing environment

This article should be required reading for understanding the new marketing environment. Any company which does not have a strategy for:

  • Integrated content creation and re-use infrstructure
  • A porous knowledge management structure (because without allowing itself to be refreshed and regenerated knowledge becomes old too fast...)
  • CRM's that record all interactions with client's  allowing a conversation to develop
  • Distributed content creation (staff, managers, clients)
  • Plans to engage content creators in the new media space
  • An understanding that the game in communications has shifted from the precision of the 'mass media' 'set piece' to 'open-ended' and 'fallible' - yet self-correcting - 'conversations'.

The critical point might be summed up by this quote: [mainstream media] “don't get how subversive it is to take institutions and turn them into conversations”. That could apply just as well to financial services marketing.

KiwiSaver and The UK Pensions Recommendations

You can find out about the elements of KiwiSaver that are being considered in the UK by following the link to this recent report below.

The Pensions Policy Institute (PPI) publishes its latest report NPSS policy and design choices.  This paper explores the lessons for UK's proposed National Pensions Savings Scheme from the only other planned national auto-enrolment scheme: KiwiSaver in New Zealand.

You can download the paper at: