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Secret Savers

The BBC has this little item on 'secret saving' by women. This is an interesting subject. Saving secretly - from one's partner in life is a resonably common phenomenon.

Much has been written on the subject. Experienced financial services advisers frequently find that sitting down with an adviser is often the first time money has been explicitly discussed between partners in life. Usually this leads to a healthier openness on the subject - sometimes it masks deeper problems in the relationship.

Men do it too. Men's movement literature identifies the secret saving of money with dis-empowerment and a gradual withdrawal from the relationship - a contrast to the positive spin that the Marketing Manager from Scottish Widows puts on it in the article.


You will see a lot of new distribution initiatives over the next little while - because that is the place where value really gets added in this business.

Onesure, one of the most recent initiatives, will carry on without the help of Todd Jones who was co-architect with Paul Lyons. It will be interesting to see where fortune takes Todd next.

Onesure is a new initiative for Orange.

Dunne is really reaching now

The desperation of Dunne...

Apparently Peter Dunne is blaming opposition to 'his' new capital gains tax on off-shore investment companies. His arguments are spurious. Yet they also appear to be a desperate attempt to defend a tax that is widely seen as a tax too far.

Far from opposition being orchastrated by shadowy UK investment trusts - most of whom could not give a fig for what happens in little old New Zealand - the opposition to the tax has come from Kiwi investors.

Gran and Grandad, who saved for retirement and heeded the call to diversify. People that read Mary Holm, or Peter Hensley, and decided they would put a bit of money in shares. This is how they will be rewarded for their prudence.

New Zealand stock brokers representing these clients are aghast. Sure they have a powerful self-interest, but they have justifiably fought their corner pointing out the inconsistencies with property investment, here and overseas, and with managed funds.

Alerted to little-publicised features of the new tax such as the 'death duties by stealth' aspect of the deferred tax component, or the 100% tax on income possible in certain circumstances (see earlier post) there has been a justifiable concern about the proposed policy.

If Dunne really has form letters he says have been manufactured by off-shore investment trusts, maybe he should produce them. But were they all form letters that recently hit the select committee? Nope, there were not - more than 3000 submissions, over 1800 'substantial' according to John Key who also said they might normally only get 30 or 40 on a technical tax bill.

Recently polling (see earlier posts) showed that there was broadly based opposition to another new tax - even amongst labour voters - I am sure they would have asked a United Future voter too, but maybe they couldn't find anyone that remembered, or would own up to, voting for them.

Time to wake up and smell the coffee.

Reality Gap - What's 1.5 million between friends?

It is often a challenge in consulting assignments to get past commonly held assumptions and actually test these against real world data. Ian Hendry, my former boss at Sovereign said to me "I hate paying for research it usually only tells me what I knew already" - and I heartily agree. Ian was actually a regular user of research but was simply bemoaning the cost.

That is why I like debates about figures, especially when large discrepancies are discovered.

Like the extra 1.5 million people that a research firm says live in the UK in - how to put it kindly - "constrast" to official figures. Apparently the scandal is not new and the 2001 census in the UK was particularly bad - illustrated by this quote:

"As Westminster Council famously said at the time in relation to the Census’s claimed sharp drop in the Westminster population, if they are paying Council tax, it means that they probably exist."

The full article is here - it may require registration but that is free.

Capital Gains Tax can create 100% taxation scenarios

How could I almost let this one go?

These authors, Paul Mersi and Mark Russell, think that with the new capital gains tax, periods when taxpayers could be paying 100% of income in tax may not only occur occasionally, but quite frequently.

Unlike my views of KiwiSaver - which are supportive, generally of the policy, I am wholeheartedly against this particular bit of the new tax proposals.

Well worth a read.

Sentinel - relentless

Sentinel goes to Spain
A week after announcing its entry into South Africa, Sentinel has said that it will launch in Spain too.

It is initially tackling the expatriate market which represents around 10% of Spain’s 44 million population.

Sentinel has teamed up to form Seniors Money Spain with Blevins Franks International, established more than 30 years ago. With 12 offices located in Spain, it is the largest firm of financial advisers to retired expatriates in Southern Europe.

From: www.goodreturns.co.nz

Bomber Command

Where I used to live in East Anglia, we were surrounded by airbases. A testament to the description of the British Isles as an 'unsinkable aircraft carrier' - a description it picked up at the end of the Second World War, and retained during the Cold War. This story from back home caught my eye: link to bomber command memorial.

While the raids were 'controversial' to some it seemed to make sense at the time that in order to win a war infrastructure would have to be destroyed and people killed. Sad, but a fact of a terrible conflict.

Still more on KiwiSaver

Having spent a very busy day talking to fund managers about the changes I would say the industry is very happy with the proposed changes – one remarked “its rare for government to listen and adopt the recommendations so comprehensively” another said “we even got a tax incentive!”

For my own part I say this:

  • Overall – a big improvement and now a decent bit of policy
  • Used to its full extent the tax incentive is comparable to Australia’s for most taxpayers
  • The shift to deducting from first paypacket is sensible – event though there is more pressure on the employer to provide information early
  • The shift in timeframe is helpful for employers, but cosmetic in practice for fund managers – and means that first payment into schemes still happens in first week of October
  • The housing diversion scheme is tricky and may not be used much – it could be seen as a complicated yet limited form of mortgage tax relief – likely to cost as much to administer as it saves members.