KEY POINTS:
Chris Lee has been getting a fair amount of media attention of late.
The managing director of Kapiti Coast financial advice and sharebroking firm Project Resources has been rating finance companies for years, but the spate of collapses in the past 18 months has pushed him further into the spotlight.
The highly respected commentator and critic is accessible and knowledgeable, and clearly enjoys an audience.
Crucially, he is not shy of skewering the companies and individuals who through negligence, stupidity or dishonesty have seen more than $1 billion worth of New Zealanders' savings put at risk through the recent rash of finance company failures.
"I've been in this industry for 33 years and I'm 57 and I can't be too many years away from being put aside as a dinosaur. I don't want to leave an industry that is regarded as being made up of a whole lot of self-serving, self-interested people who are convenient with the truth and will do anything to make a buck at the expense of anybody."
Despite his strong opinions, he doesn't see himself as an activist.
"I don't fight the system. I've been very much part of the mainstream for most of my career."
He comes from a family of business people and after a brief early stint as UK-based freelance sports reporter, he got a job with a London-based international investment firm when in his early 20s.
Returning to New Zealand, he got a job with General Finance in 1977.
"At that time the finance industry was being taken apart by Muldoon. It was just survival time but was probably the making of me in some ways."
Lee was with General Finance for eight years in various roles, ending up as assistant general manager of what he estimates was a billion dollar company owned by the banks.
"We reported to a board which had good bankers on it. You couldn't help but learn."
Among his contemporaries and mentors in the industry at the time were John Anderson, who was running South Pacific Merchant Finance at the time; and Don Brash, who was in charge at Broadlands Finance.
Then in March 1985, as part of the deregulation of financial markets, Roger Douglas floated the dollar.
"The money markets went absolutely bloody crazy."
Lee realised General Finance had to either completely change or it had no future. As it happened, General Finance's owner, Lloyds Bank, decided to sell-up to UDC in 1988.
By that stage, Lee had left to set up his own sharebroking and financial advice firm.
"I didn't see there was any industry going to be left. From 1987 to probably 1993 there virtually wasn't. There was UDC, AGC, South Canterbury Finance and bugger all else."
Setting up shop on the Kapiti Coast - because that was where his father lived - his business has thrived thanks to some "big breaks".
He pretty quickly discovered the area had a fast-growing, relatively high socio-economic population, "which lends itself to the sort of work I do".
While his firm has done a fair amount of sharebroking business, he regards his expertise in fixed interest investments as his competitive advantage.
His business also got a boost when the financial advice column he was writing for a local newspaper was picked up and syndicated by Independent Newspapers.
Even then, his outspoken style saw him lock horns with a range of individuals and companies.
"For all those that like the way I think and operate, there's probably a lot of people who think I'm an idiot and don't agree with me.
"When you go out and criticise institutions or investment styles you're going to offend some people.
"I got mixed up with some people who were pretty stroppy. Some of the corporate leaders in New Zealand in 1987 were clearly advancing themselves rather than their shareholders, and there'd be a fairly decent pile of letters I've received from lawyers over the years that have had a crack at me.
"Rod Petricevic would have been one of the people I would have been very critical of 20 years ago. I think of him as someone who's never really had any money; he's always taken risks with other people's money."
Meanwhile, what he regards as his third lucky break was the rise of the internet, around the time his column syndication came to an end when INL was bought by Fairfax.
"My ratings thing published on the website probably was another thing that expanded our business. The result is now we've got seven staff and a damn good business that in its own area does pretty well."
Today, his business has about 4000 clients and manages about $700 million on their behalf.
While Lee is unlikely to be one of the agencies the Government will appoint to rate finance companies, as part of its new regulatory regime for the sector, he is confident his system compares well to the big operators.
"I visit finance companies, I look at their balance sheet, I have a fair amount of market information because I know a lot of guys in the industry. I get to know their board and their executives. I'm very impressed with banking experience and I'm very unimpressed with sales experience.
"I probably place a lot more emphasis on the owners of the company and of their willingness to be honourable if they ever have a bad year, than other raters would."
He regularly receives treasury reports from a number of firms.
"If I can't offer decent information to my clients with that sort of level of data, then I must be an idiot."
Companies don't pay for Lee's ratings. He performs the service on behalf of his clients, and there are some firms he just wouldn't bother with. One of those was Alan Ludlow's National Finance 2000, which last year became the first of the current rash of failures.
However, Lee freely admits to having egg on his face from recommending Provincial Finance to his clients.
"That's something I wish hadn't happened."
Lee met Provincial's David Lyall in 2003. At that stage the company was winning industry awards for its prodigious growth.
"David showed me through their balance sheet and lending model, and they were clearly properly capitalised. They had a good chief executive in John Edilson, who was a banker. They had independent directors.
"For two years they did well, and we had 2.8 per cent of our client money in Provincial Finance, and then they went bust. "It didn't happen overnight. They'd signalled for some months they were in trouble, so in the last several months I'd taken them off our list - but it was too late."
Lee himself wrote a cheque for $700,000 as part of an industry bid to save Provincial. But when that attempt fell over, his money was returned.
When it became clear that his clients stood to lose some of their Provincial money, Lee, after consulting with his wife Giovanna ("one of my greatest assets in this business") decided to underwrite their eventual losses, which could be up to $1 million.
"It was not a nice thing to have to do, but I don't like my clients being in strife."
Aside from the recent failures, another big problem Lee sees in the industry is the sheer number of people who have set themselves up as financial advisers "with no experience in money markets, no experience in sharemarkets and investment markets, who think they can run a business with a couple of hundred clients".
However, he believes crooked and lazy operators will be forced out soon by new regulations and the fallout from recent finance company failures.
"You would expect there to be a lot of litigation faced by those people who just carelessly, ignorantly, or dishonestly recommended Bridgecorp. Investors should be talking to their lawyers."
He also expects the number of finance companies in operation will fall.
"There will be many that will have to sell out or merge or exit gracefully, which is what happened in the 1980s. For the companies that have got no real competitive edge and have just been milking the big margins, it's probably much better to sell or close down."
He is also pleased with most of the new regulations for advisers and finance companies, and is happy to take at least some credit for them.
"My parting gift before I retire was to ensure that the authorities are forced to have an ombudsman funded by an industry levy, and that the courts are asking the questions of crooked planners and sharebrokers."
Chris Lee
Managing director, Project Resources.
* Age: 57.
* Family: Married to Giovanna, three sons.
* Education: Lindisfarne College, Hastings. Bachelor of Commerce at Victoria University. Certificate of Journalism from Wellington Polytechnic.
* Career: Freelance sports reporter. Various finance roles with a UK-based investment company and with General Finance in New Zealand.
* Interests: Cricket, golf, bowls and fishing.
