Margaret Wilson sends Stalinesque shivers down advisers' spines

By Michael Coote

Friday 3rd September 2004

Investment advisers will be in for a tickle up now Commerce Minister Margaret Wilson has decided to appoint a six-member taskforce to examine regulation of their industry.

An old and trusty friend of business, Wilson conveyed the glad tidings to a recent meeting of the Christchurch Financial Planners and Insurance Advisers Association.

One imagines that her pronouncement triggered the sort of spontaneously ecstatic applause and incontinent aisle-rolling that used to greet Stalin's latest ukase.

Investment advisers fall into the moral issue concentration camp of government considerations.

Wilson's speech referred to the unsuspecting victims to be protected from capitalist evil when she spoke to her new-found investment industry comrades of how, "Consumers need your expertise to help them to save and invest wisely." The C-word! Advisers are doomed already.

"How New Zealanders invest their hard-earned income is critical to their future living standards in retirement. Maximising the opportunities for New Zealanders to increase their wealth is an issue of particular concern to this government."

Lucky, lucky investment advisers, right at the forefront of the government's master plan to colonise Siberia and enrich New Zealanders, although a good many of presently rich, or for that matter even middle-class New Zealanders may well take heart that suddenly the government appreciates their needs. But don't look for tax cuts.

As Margaret Thatcher was wont to say, a leader leads. Her near namesake has felt the same insight fall upon her and has taken up the heavy mantle of Great Helmswoman to an investment advisory industry adrift rudderless in a sea of confusion and qualms of conscience.

Over and again in her speech did Wilson lay claim to government leadership in the vexed area of regulating advisers with much the same insouciant panache as Napoleon Buonaparte when he crowned himself emperor with his own hands.

At least Stalin waited to be asked to do this sort of job, so maybe this country is not so socialist after all.

Advisers could heave something of a sigh of relief that Wilson had heard their pleas not to have an Australian-style gulag system imposed upon themselves.

But she did say that she had an open mind something that may make her speech memorable and went on to remark that the government was committed to harmonising transtasman economic policy, not to mention heeding the snippy comments of a recent IMF mission's report on New Zealand as part of its financial sector assessment programme on regulation of financial intermediaries.

"I also want to respond positively to that report," quoth Wilson breezily, in much the same way, no doubt, as great Stalin responded positively to the latest unmasking of yet another nest of spies, traitors and wreckers caught out stiffing the five year plan.

Differences between Australia and New Zealand could mean the full Australian regime might not be imposed here, it was commented, perhaps in passing allusion to our lack of salt mines.

Wilson's task force, which will include some C-type people, will spend time working out what the investment advisory industry actually is. Well, it is a competitive retail business. Which leads to the question: why does yet another competitive retail business need any sort of government inquiry about regulation at all?

And what generally ageing advisers would like to know, more than anything, is not how many more regulatory hoops they are going to have to jump their creaking bones through, or how if they get up to anything naughty they will have their greyhaired coljones fed into the crusher but rather how they can sell out of their businesses and exit a contracting industry at an ever-diminishing profit.

More regulation is not likely to pad out the price tag for a business of a kind where would-be sellers outnumber potential buyers.

Nutcracking with a sledgehammer will put the sickle to new industry entrants.

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