We live in a world of acronyms, so here’s another one: QFE.

Also known as Qualifying Financial Entity, the QFE concept was dreamed up to fast-track the registration and supervision of financial advisers under the new regulatory regime, which is due to come into effect late next year.

The QFE rules allow any approved organisation – generally only large financial institutions are expected to take on the challenge – to assume responsibility for advisers acting under their auspices.

QFEs will take on some of the workload of the Securities Commission, who will not have to approve and authorise every financial adviser who is caught by the new legislation.

It’s a pragmatic response to a difficult regulatory exercise – estimates of how many financial advisers there are in NZ range from about 5,000 to 20,000 – but it also hands some competitive advantage to financial institutions at the expense of smaller, independent operators.

This week the government increased that power even further with a number of changes to the QFE rules.

Previously, QFEs were only to be responsible for their employees but will now also be able to shield named “contractors” under their regulatory banner.

As well, QFE advisers will be sell a greater range of financial products, rather than only those created by the QFE itself. In the legal language, QFEs will be able to push products down their chains where they are “promoter” as well as “issuer”.

It might seem a subtle change but it allows financial institutions to cut in on the business of independent advisers without necessarily having to jump the same compliance hoops.

Some independent (or ‘non-aligned’) advisers are feeling aggrieved at the changes and warn that the QFE regime could reduce consumer choice, leaving them only to select which bank to buy almost identical products from.

This could happen but one industry insider pointed out to me that independent advisers can survive QFEs.
“It’s already tough being an independent,” he said.

Another acronym can’t hurt.

Scrawled across the low, curving concrete wall that borders the motorway on-ramp near the ferry terminal is a word that I would never have expected to see rendered in graffiti form.

But there it is: ‘Kiwibank‘.

What sort of self-respecting tagger would waste their spray-can on daubing the name of a financial institution by an on-ramp?

It is possible the street artist was busted before completing the message – was it to be ‘I H8 Kiwibank’ or ‘Kiwibank 4 Eva’ ? We may never know. But it seems to me this is a great step forward in financial literacy.

The other possibility is that Kiwibank’s advertising budget has been cut dramatically.

It’s not a bad ‘viral marketing’ idea. And the graffiti is strategically placed just past the Westpac Stadium in Wellington.

Perhaps in anticipation of the landmark ruling against Westpac this week, some Kiwibank marketing guru saw a ‘positioning’ opportunity.

In a 200 plus page judgement that almost no-one will read, Westpac was found guilty of tax-avoidance and will have to stump up for a bill approaching $1 billion.

Unless it appeals. And the consensus is – at least in the room I was in when the news broke – that Westpac, as BNZ has done already after losing a similar case earlier this year, will appeal.

Why not? With $1 billion at stake, what’s a few million more for the lawyers?

The bank can surely recoup these costs somewhere else. And if Westpac would rather not squeeze a little more out of its customers, I know where it can save on marketing.

Over the 12 months to March 31 this year, KiwiSaver providers collected a total of about $26 million in fees, according to my calculations.

If my calculations are correct – of which I have my doubts – then KiwiSaver has come reasonably cheaply. Based on total funds under management (FUM) at March 31 of about $2.6 billion, a figure I arrived at in my recent  KiwiSaver survey, then the whole show has been produced for about 1 per cent of FUM – which in fund manager and superannuation terms is a real bargain.

But as I said, my calculations may be off. Although I believe I did a thorough job, considering the circumstances, my fee numbers didn’t look absolutely, actuarially consistent.

And that’s because there is little consistency in the way KiwiSaver providers report fees. I must’ve waded through 40-odd reports looking for the word ‘fees’ and found it in thousand different places.

Call me suspicious if you like but I’m positive there were other fees lurking somewhere out of my gaze, masquerading, perhaps as ‘management expenses’.

It’s not that providers are necessarily hiding their true fees, it’s merely that there is no agreed standard for how they are reported – a problem that extends across the managed funds industry.

Last week a relatively new fund manager, Pathfinder, issued a challenge to the industry to come clean on how it describes and collects fees. It is true the Investments Savings and Insurance Association (ISI) – a collective of fund managers and insurers – is working on a new fee disclosure standard but you have to wonder why it’s taken so long.

In the interim, my attempt at KiwiSaver fee clarity will be published in this month’s edition of ASSET magazine. Out as soon as I can get it finished.

With riveting article titles like ‘Anchoring fiscal expectations’ and ‘Quality of bank capital in New Zealand’ it’s unlikely that the September issue of the Reserve Bank Bulletin captured the public imagination. My guess is that not one issue in the 71.75 volumes of the Reserve Bank Bulletin published to date has ever captured the public imagination.

And that’s a shame because, from what I understand, the Reserve Bank is a powerful institution that has a significant influence on the direction of our economic and social lives. It could be useful for the public to become familiar with the ideas and people who flow through the Reserve Bank and occasionally pop up in the Bulletin.

I’ve certainly enjoyed flicking through the Bulletin in the last year or so but it’s obvious the content can’t compete with the more pressing mainstream media issues like disasters, sport, weather and celebrity gossip.

Hence the lack of ads, which for someone like me who operates in a more commercial medium is truly shocking. Really, there was a bit of fat in Matthew Wright’s piece ‘Mordacious years’: socio-economic aspects and outcomes of New Zealand’s experience in the Great Depression’ that might have been better filled with a quarter-page vertical (Prozac? Viagra?).

From the bits I skimmed it seemed Wright is arguing that the Great Depression in New Zealand wasn’t as bad as people thought it was at the time – or as he puts it there was “a disconnection between social effects and the economic experience”.

He even quotes John Mulgan, who I only know as the author of ‘Man alone’, the Depression novel we were forced to read in college. I don’t recall anything of the plot but I do remember the dreary, oppressive sense the book induced in me at the time. The man knew about depression – Mulgan died after ingesting an overdose of morphine on Anzac Day 1945.

‘Financial crises, sound policies and sound institutions: an interview with Michael Bordo’, however, adds a cheerier note to the September Bulletin.

It has the funniest line in the entire issue. Recalling his first ever published academic paper Bordo says: “I’d put in a ton of work – it was one of the best papers I ever wrote. Only a handful of people remember it.”

You may be able to track Bordo’s masterpiece down in a back issue of the academic journal ‘History of political economy’.