Pioneering NZ superannuation and investments legal specialist, Alasdair McBeth, has stepped down as DLA Piper partner after more than 45 years in the Wellington-based practice.
McBeth joined what was then known as Phillips Shayle George in 1978 as a law clerk, rising to partner ranks the following decade while the business itself morphed through various ownership changes to its current form.
“Now we’re part of the largest law firm in the world,” he said.
Back in the early 1980s, however, Phillips Shayle George was a boutique operation specialising in property law and estate planning (at a time when inheritance tax was a thing) – fields that ultimately led to McBeth to the adjacent legal niches of unit trust and superannuation.
“I became a trust lawyer,” he said, moving into the investment sphere by way of one of the firm’s largest client at the time, Government Life (later to become Tower), which managed the third-largest super fund of its day.
Along with another senior partner, Ross Mulholland, in the late 1980s, McBeth spun out a “rudimentary business plan” to focus the business on investment and retirement savings.
“We saw that the sector would grow. And there was more compliance and more regulation coming,” he said. “We were the first law firm in NZ to say that we specialised in managed funds and super.”
But the growth of the funds management and super sectors in NZ has been erratic. Prior to a law change in 1989, for instance, super offered “huge tax concessions”, McBeth said with tax-free contributions, investment returns and withdrawals at retirement.
On the downside, though, pre-1989 super investments had to flow through opaque, insurance-linked schemes that had poor-to-no disclosure requirements.
The 1989 legislation – and later disclosure upgrades – may have tamed the super wild west but a tax-related side-effect of the new regime saw the funds industry stagnate for decades.
Managed funds, which were mostly taxed at a high flat rate, suffered relative to direct investments (including property) that could be finessed into more concessionary structures.
If the 1990s and early 2000s were an arid period for the local super and funds markets, the introduction of KiwiSaver and the portfolio investment entity (PIE) systems in 2007 marked the beginning of the financial renaissance in NZ.
“From 2007 through to 2013 [when the Financial Markets Conduct Act came into force] saw the biggest changes to the industry in my career,” McBeth said.
Despite handing in his partner badge, McBeth’s deep technical and historical knowledge of the NZ funds management, KiwiSaver and super sectors will not be lost to the industry or DLA Piper.
“I’m staying on as a consultant,” he said. “I’m still fired-up.”
