AXA goes into the red

Fund manager, Armstrong Jones (AJ) has continued its incredible run in one of the New Zealand industry's top awards programs, racking up the Morningstar Fund Manager of the Year prize for the seventh straight year.

Fund manager, Armstrong Jones (AJ) has continued its incredible run in one of the New Zealand industry's top awards programs, racking up the Morningstar Fund Manager of the Year prize for the seventh straight year.

As well as receiving the top overall prize, AJ was a finalist in four of the seven other categories - winning two of them and finishing first runner up and second runner up in the remaining sectors.

Morningstar managinf director Graham Rich says the performance of AJ is all the more remarkable given that past performance is not a factor in judging with each fund manager assessed on its merits for the year in question only.

"A successful fund manager recognises its strengths, and does what it does do well. Arm-strong Jones stands out in the New Zealand fund management market because it achieves this and does so across a comprehensive range of funds," Rich says.

"No other fund manager in New Zealand has yet matched Armstrong Jones' overall ex-cellence."

Armstrong Jones managing director Paul Fyfe says the company's strong service culture and expert team has enabled it to perform consistently over a decade of major changes in the fund management industry.

"The environment in which we operate has become a lot more competitive, and this has come against a background of increased market expectations in terms of service and range of products on offer," Fyfe says.

"Armstrong Jones has met that challenge maintaining our quality standards and commit-ment to meet our investors' expectations in terms of both service and investment man-agement."

He says one the key challenges facing the industry is the need to educate New Zealanders about the value of saving for retirement.

"We have gone beyond simply providing financial services and have developed a suc-cessful educational programme for financial advisers, the general public and schools," Fyfe says.

Winners of the 1999 Morningstar fund manager of the year sector categories include:

Multisector - Armstrong Jones,

International equities - Armstrong Jones,

Australasian shares - National Bank

New Zealand fixed interest - ANZ Funds Management,

International fixed interest - BT Funds Management.

A new television series, The Money Doctor, has provided a great opportunity to lift the profile of the financial planning industry in New Zealand according to one of the three financial advisers on the show, Dr Rodger Spiller.

Spiller says after being on air for only a few weeks the feedback from the public, other planners and fund managers has been positive.

"The Money Doctor has rated very highly and that is sure to be benefiting the advisory community as one key themes of the show is that if you want financial advice you should go and see a financial planner," Spiller says.

He says the program is more attractive to the public because it features real people facing real financial problems that many others can identify with.

"While the people on the show may not be typical of my clients many of the issues ad-dressed still apply and are relevant, even for high income earners. Much of the advice is generic information about budgeting and the importance of investing with a diversified portfolio."

Spiller says while budgeting advice falls under the general banner of financial planning, he doesn't normally give such detailed budgeting advice to his non-televised clients.

"I do tell my clients where to go to get budgeting advice. I see that as an essential educa-tional service of a financial planner."

Producer of The Money Doctor, Ingrid Leary, says educating viewers on long term finan-cial planning was one of the goals of the program.

"It was quite difficult because television is such a short term medium whereas planning for your retirement and other lifestyle goals is long term," Leary says.

She says viewers seem to be able to relate to the real life examples and pick up on the tips and techniques the show's three 'money doctors' present.

"We don't refer to the advice on the show as a financial plan but we refer people to go to a planner if they want financial advice," Leary says.

"One thing we noticed was that some people on the program didn't know what a financial planner was and others didn't know the difference between a financial planner and an ac-countant."

Money Management understands that the Financial Planners and Insurance Advisers As-sociation (FPIA) has written to The Money Doctor producers complimenting the show but also suggesting it could tackle a broader range of subjects.

However, not all the reviews of The Money Doctor have been positive with one invest-ment adviser calling the show "voyeuristic television that had me reaching for the vomit bucket".

AXA New Zealand has reported a $2.1 million loss for the six months period to March 31 down from the $17.9 million profit in the same period last year.

The funds management and insurance firm attributed the loss to falling investment re-turns and one-off costs associated with its rationalisation process.

Head of AXA New Zealand, Ross McEwan, says profits were also down because of un-usually high claims on its income protection products and a shift in focus towards funds management.

"We have been focusing on strategic repositioning during the six month period," McE-wan says.

"This has involved significant effort and resources being invested in the funds manage-ment business, which is where we see our growth in the future."

Despite the loss, AXA experienced strong growth in its wholesale funds management business over the six month period as well as an increase in profitability on the retail funds management side and good performance from health insurance products.

McEwan says the company is also on target to meet its aim of a 35 per cent reduction in management expenses by next year.