Can a financial product be sold without advice?

There is a good debate on supermarket sales of financial products over there: link.

Once there was only prime home lending, and then there was sub-prime. Now we have a new mezzanine category 'light-adverse'. Given the way kiwis like to spend money on credit, that include about a third of the working population by a rough guess.

Sometimes I don't know whether to like it or loathe it. I had thought I had the spam stuff beaten, between a good spam filter and the junk email folder (for things one can never quite manage to figure out how to unsubscribe from) for a while I did have it working well.

Now there is an American firm that spams me two or three times a night - so they greet me every morning. They have near-english text of gibberish to fool the filters sitting 'below the fold' and the main advertising text is included as an image (not searchable, you see) in the body copy. They emails come from random email addresses and change the sender and subject line every time. They flog investment in penny shares - I am this is punishment for having my email address on public display on my website and this blog.

I was geting really annoyed about it. But every now and then I laugh at them. This morning these two 'investment' offers came from "Freddy McDowell" and "Nathaniel Hammond" with the subject lines "trade-off" - which I suppose is sensible  - and "sacred smutty".

Does anybody ever buy shares from such a company? Why?

The government's shift on its proposed capital gains tax - to what has been described as an 'asset tax' - has not, yet, mollified everyone concerned. The problem with tax is that its damn complicated. Doing things quickly and haphazardly increases the chances of messing it up.

Choice quote:

"It is an asset tax. That is a major structural change and it will not sit easily in the Income tax Act. It will be complex and they are doing it in haste, which means it will not work. There will be loopholes for Africa."

 

It was also a corruption of the tax lawmaking process, Sheppard said.

 

"This is just dressed up urgency, and the last time we had tax law made under urgency was in Muldoon's day."

Hmmm - not a nice comparison. Full article here: go look.

Just when you thought Java-man was dead - he's baaaaack! I know, I met one on Friday.

Wielding his trusty cell-phone and business case he's back in town. Bouyed by the boost of having 900 pound gorillas of new media strutting around (think Google, Ebay, and Amazon) buying things left, right and centre, and rejuvenated pin-ups like Apple because of smart new products he's been tempted out of consulting jobs, IT shops of telcos, and he is back on the hunt for backers, code cutters, and niches that do things you didn't think needed doing. But then again, you didn't think you needed an i-pod nano either, did you?

Sooner or later, one of these guys is going to do online something really, really, clever in the consumer finance space.

Apart from the headline, this article makes perfect sense. Link.

Thank you to all who attended our corporate regulation forum this morning and special thanks to our co-hosts Bell Gully, represented by Mark Todd and Sarah Winterburn. Phillip Matthews and I would like to mention to those that attended that we will be supplying you with Mark's presentation and the notes from the workshop sessions next week.

A good article. Nice to see a few more of these about recently. Debate coming up from a few gentle zephyrs into more of a persistent breeze. Link.

You are going to have to get used to this 'how many angels can dance on the head of a pin' type of debate masquerading as client protection.

Read this article about the to-ing and fro-ing between a financial advisory firm and the Ombudsman in the UK and you will get a feel for where our own regulation will end up - even in the proposed forms.

Well, Roger Kerr is quoted - lets hope he was misquoted - that the RB would be ill advised to increase rates as it would have no impact on inflation, but would push the New Zealand dollar higher, causing more problems for exporters and the economy. Link.

Another interest rate rise would have no effect on inflation? Hmmm. Well, if interest rates have no effect we might as well have them a lot lower. Actually, I suspect this is a reflection of the usual, dismal state of financial journalism in NZ.