KEY POINTS:
Looming law changes will mean a big shakeout in the financial advice sector, says the head of fund manager Vestar, Kelvin Syms.
Vestar, which was until this week named Northplan, has $1 billion of client funds under management and is owned by Australian investment company MFS.
Syms, MFS New Zealand managing director, says new rules governing financial advisers in Australia prompted a 14 per cent retirement rate in the industry. He expects the same to happen here over the next 12 to 18 months.
In New Zealand there had been a tendency, particularly among chartered accountants, to pick up "agencies" of a system.
"I believe those people are going to be caught up in the whole raft of legislative changes, the tax changes, the regulation of financial advisers that will require them to provide just more than 'a system'."
Syms says it was time to re-name Northplan, since it had well outgrown its Northland origins.
"You can't take the name Northplan to Invercargill - and hand it over to a Southland investor."
Syms said Vestar was anticipating new business stemming from the launch later this year of the government-backed superannuation savings scheme KiwiSaver.
He was, however, worried at the level of service some savers might get from fund managers forced by government oversight to keep their fees too low.
There was very little future in the local market for any fund manager who charged up to 3 or 3.5 per cent in fees, said Syms.
