24 Feb 2021 – Trustees Executors’ newsletter advised of the recent publication of a final report by the Board of the International Organization of Securities Commissions (IOSCO) outlining nine sound practices for retail investor complaint procedures in financial markets. The January 2021 IOSCO report is titled “Complaint Handling and Redress System for Retail Investors”. https://www.iosco.org/library/pubdocs/pdf/IOSCOPD670.pdf
The FSC has announced that an outlook webinar will be held on 3 March 2021 to hear from Geoff Bascand, Deputy Governor and General Manager of Financial Stability. RBNZ’s first Monetary Policy Statement for the year is set to go ahead during the webinar. This means that webinar attendees will hear about the current economic as well as getting an update on cyber security and other key focus areas. During Q&A, the Deputy Governor will be joined by:
8.00am - Welcome from FSC Chief Executive, Richard Klipin 8.05am - Outlook 2021 with Geoff Bascand, Deputy Governor, Reserve Bank of New Zealand 8.30am - Fireside chat and audience Q&A with Geoff Bascand and Reserve Bank team
11 Feb 2021 – MBIE published updated guidance to help lenders comply with their responsible lending obligations. Most of the updated Code will come into effect on 1 October 2021, at the same time as the law changes it references. The new Chapter 12, which contains guidance on missed payments and repayment difficulties, will come into force four months later. https://www.mbie.govt.nz/about/news/updated-responsible-lending-guidance-published/
11 Feb 2021 – RBNZ released a paper focused upon the extent to which economic researchers use improper methods to produce more “starry” results. For example, researchers often have to decide whether to delete suspicious-looking data points. If researchers use that freedom to favour “starry” results, their work will suffer from exaggeration. https://www.rbnz.govt.nz/research-and-publications/discussion-papers/2021/dp2021-01
22 Jan 2021 - RBNZ advised that it will be postponing publication of most statistical releases. It will provide an updated release calendar when it can but expect delays of 3-4weeks to most publications. At this stage, statistics impacted by this delay will include:
Bank customer lending (C65 & C66): delayed from 12 January
Credit card balances and spending (C12 & C13): delayed from 26 January
New mortgage commitments - Loan to Valuation Ratios (C30-C35): delayed from 29 January
Bank Balance Sheet (C5, C50-52, S10-41): delayed from 29 January
Non-bank Lending Institutions (T1,T4, T11, T21, T31): delayed from 29 January
Bank Liquidity (L1-3): delayed from 5 February
Retail interest rates (B3, B6, B20, B21, B25-27): delayed from 5 February
Other publications scheduled for February and March are also expected to be affected, including the December 2020 quarter Bank Financial Strength Dashboard (scheduled for release on 3 March). Delays to publication are necessary because the file transfer software application, Accellion FTA, recently breached, was used for onboarding data from regulated entities and other suppliers into the RBNZ. The RBNZ will not be collecting data from these entities for statistical production until a new secure file transfer system is implemented. RBNZ expect the new system to become available in February 2021.
25 Jan 2021 – ASIC announced that it became aware on 15 January 2021 of a cyber security incident affecting a server used by ASIC . Like the recent RBNZ breach incident, this incident related to Accellion software used by ASIC to transfer files and attachments. It involved unauthorised access to a server which contained documents associated with recent Australian credit licence applications. https://asic.gov.au/about-asic/news-centre/news-items/accellion-cyber-incident/
Diana Clement wrote a NZ Herald article on the need for being prepared in case of unexpected circumstances. Clement highlights that we need to be mentally prepared for the occurrence of personal or societal catastrophes. Clement continues by noting that getting out of debt and having savings is essential to overcome future crises. The need for budgets is highlighted by using the events surrounding COVID-19. Steve Morris, a financial adviser at SW Morris & Associates notes that we would all benefit from using digital tools such as free digital tools for personal cashflow forecasting such as PocketSmith. Insurance is highlighted as being another essential thing for New Zealanders to have in place to ensure protection. Income protection, mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance are all mentioned, with Clement saying each offers different types of cover that are useful in different circumstances. Although insurance is deemed as essential, Clement concludes by saying that no insurance policy is completely fool proof.
“My usual New Year articles are all about the positive stuff and how you can turn your year around. But after 2020, let's talk about preparedness. That includes being mentally prepared for curved balls, having savings, and taking out insurance.
Mental preparedness. Do you have a plan for the next time the world turns to custard? Unpredictable (black swan) events such as the Global Financial Crisis and now pandemic, hit us every 10 years or so. We can have personal black swan events such as divorce, or illness. Financial adviser Steve Morris of SW Morris & Associates has seen an upswing in couples separating after lockdown. This can be financially crippling. He recommends getting help from organisations such as The Parenting Place before the relationship ends up on the rocks.
Savings. Getting out of debt and building up some savings is essential if you want to ride out the next financial crisis. If you're constantly a few weeks from financial meltdown then this applies to you. It's hard, but you need to change your thinking and create a budget. People can and do turn their finances around. Use Covid-19 as the financial catalyst to get you started.
In an ideal world you need three to six months living costs (not income) squirrelled away. Providing you are still able to work and willing, most people will find a job within that period.
The best tool for this is a budget. I know it sounds boring, but it's simple to write your first budget and the outcome can be truly life-changing. I follow a number of investing and get out of debt forums and see ordinary Kiwis celebrating cutting up their last credit card or beginning an emergency fund. Don't write it off. It can happen.
Morris also recommends using the free digital tools for personal cashflow forecasting from PocketSmith.
Insurance. The whole point of insurance is to cover yourself financially when unexpected events hit. That's insurance cover for your health, income, and property.
A variety of insurances can cover your income/outgoings. They include income/mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance (which often pays out if you're diagnosed with a terminal illness. Each covers different risks and it's a good idea to seek advice from a financial adviser. Everyone is covered by ACC for accidents, but you're more likely to become disabled by illness, and only qualify for Work & Income benefits if you don't have insurance. When insuring yourself, make sure you think about the non-working or lower-earning partner, says Morris. All too often a higher-earning spouse has to reduce hours to pick up parenting duties if the other spouse becomes ill, is disabled, or dies, says Morris. Trauma cover is very good in this situation because it usually pays a lump sum, he says.
Insurance is essential in our modern world, but no insurance policy is 100 per cent foolproof. Because the things you will claim on are unexpected, they could fall outside the policy wording.” Click here to read more