Watchdog critical of firm’s actions

By Philip Macalister

THE Insurance and Savings Ombudsman (ISO) has hit out at a New Zealand financial services firm, accusing it of undermining the credibility of its scheme in order to avoid a negative finding.

The ISO is a voluntary industry body set up to resolve disputes between financial services firms and their customers, but because complaints are confidential the ISO is unable to name the firm involved.

Ombudsman Karen Stevens says when the firm became aware the office was going to issue an adverse finding it began arbitration proceedings. That took the issue away from the ISO, preventing it from issuing a formal decision.

Stevens is annoyed with the action because it undermines the integrity of the scheme, plus the firm refused to treat the arbitration as a test case.

If that was allowed, it would have given the ombudsman power to decide who should bear the legal costs of the arbitration.

The ISO scheme was free to consumers. Forcing them into arbitration meant they had to pay and was fundamentally wrong, she says.

Stevens also expressed concern about the scope of the problem.

She says the ISO had started to receive a number of complaints about this company in the space of a few months.

“When a pattern starts to emerge we treat it with a certain degree of seriousness because it may indicate a systemic problem,” she says.

Stevens says these developments have highlighted a loophole in the scheme's terms of reference.

Get Sorted!

The Office of the Retirement Commissioner (ORC) plans to do all its public educational campaign online this financial year because the Government has slashed its funding in the budget and it no longer gets money from the private sector.

In previous years, the office ran high profile television campaigns to get its message across to the public. But the Government has now cut the office's public education budget down to $1.5 million. The private sector, which used to provide $1 million annually, no longer gives any money to the office.

Retirement Commissioner Colin Blair says it managed to put a public education campaign together this year because it realised its funding would be cut and was able to save some of last year's money.

"If we had spent last year's allocation we would have been in a real bind," Blair says.

The office last week launched its latest offering, a Web site called www.sorted.org.nz. Public education manager Liz Read saysSortedis designed to give New Zealanders better financial skills throughout life.

It aims to help people: make better decisions about saving, investing or taking on debt; budget better; teach their children better money management skills; and ultimately, to enjoy a better retirement through learning better financial skills throughout life.

Read saysSortedprovides a unique approach to helping New Zealanders improve their standard of living.

"It is a personalised, interactive and fun way to improve your financial skills - but most important of all, it is completely independent."

At the heart of the site are a variety of calculators and other interactive tools.

More changes at AMP

AMP Henderson's senior portfolio manager Craig Brown has left the firm. His departure comes four months after the unexpected resignation of former head of equities Stephen Walker.

Brown took over running AMP Henderson's $1.2 billion New Zealand equity pool (about half of that is actively managed) after Walker's departure.

Walker has established his own funds management business, Walker Capital Management, which will initially manage $85 million for Tower Asset Management.

AMP chief investment officer Chris Wozniak is to lead the group's New Zealand equity team following the departure of Walker and Brown.

Managing director Catherine Savage says Wozniak will lead the team until a permanent replacement is found for Brown.

— Philip Macalister