KEY POINTS:
The age of the financial engineer is over. We are now entering the era of the financial restructurer.
Everywhere you look, complex financial products are being stripped down, retooled and repackaged.
Often it's the same people dismantling these complex financial products who built them in the first place but I suppose that's a good thing - they should at least know where all the bodies are buried.
New Zealand hasn't been hit quite as much as Australia with overly-engineered financial products. The Sydney Morning Herald's Michael West has been doing a great job of detailing the excesses of MFS and the like (see his latest expose of Rubicon).
West's information is after the fact, of course, and not much use to those with money tied up in the various entities - but it is interesting.
New Zealand has its own complexities to unwind, however.
This week, for example, we've seen a number of finance companies update the punters on their "restructuring plans" - Dorchester, St Laurence, Strategic, Hanover, to name a few.
Restructuring, in essence, is a conversation between management, trustees and regulators to change the rules. Oh yeah, there might be a few lawyers involved too.
But it's not just finance companies on the restructuring bandwagon.
For instance, late last month Guardian Trust announced a 35-day freeze on its CashPlus fund while it regorganised things to, it said, access the government guarantee on cash deposits.
What's amazing about the Guardian Trust story is that a so-called cash fund needed restructuring at all. Cash is, or should be, the simplest investment product of all - cash equals immediate availability of capital.
Guardian had plonked about 35% of its CashPlus fund into the (now-inaccessible) Guardian Mortgage Trust.
A better name for the fund would've been Cash (minus 35%). It wasn't a secret, though. The information was all there in the Guardian product disclosure statement - the one that hardly anybody reads.
David Chaplin