After contributing to a
famous victory against the forces of financial bigness you’d think the Frozen Funds Group (FFG) would want to chill out a little.
But, no, the group that ran a truly brilliant consumer campaign against the ANZ/ING conglomerate and its imploded CDO funds, wants more; it wants blood on the floor.
The FFG has just embarked on a campaign to have ING (now, of course, wholly-owned by ANZ) struck off as a default KiwiSaver provider.
In a message sent out this week the FFG notes: “More than 14,000 elderly New Zealanders have seen the financial security under their retirement jeopardised by the behaviour of ANZ/ING… We believe the 300,000 New Zealanders who are currently saving for their retirement via ANZ/ING – as one of the nation’s default KiwiSaver providers – are facing exactly the same future.”
This is the point, I believe, that the FFG has, in sitcom terms, ‘jumped the shark’.
The group lists four arguments why ING should be relieved of its default KiwiSaver status – all of which can be distilled down to a single point: revenge.
This is about payback, not fair compensation or just punishment.
Commerce Minister Simon Power has reportedly dismissed the FFG’s demand – if so, that’s the right call.
The six default schemes are by law conservatively invested and the most closely monitored of all KiwiSaver products. These strict controls make them behave almost identically.
And if association with a loss-making fund was criteria for the removal of default status not one of the six providers – AXA, AMP, ING, Mercer, Tower and ASB – would be immune.
The CDO debacle has cost ANZ/ING a fair whack both in monetary terms and reputation. It’s probably true that the bank paid out the quoted amount of about $550 million to investors as a business decision rather than a moral one – but so what?
Because the bank wants to remain in business, those frozen fund investors received pretty reasonable compensation in the circumstances and it was ANZ/ING shareholders wearing the costs.
As the FFG looks to twist the knife still further into the hated big Aussie bank perhaps it could spare a thought for the many thousands of other investors who have either lost almost everything in finance firms less committed to longevity or passed their contingent liabilities onto taxpayers who, according to the latest government accounts, could be up for almost $1 billion.