Correst me if I'm wrong, but don't NPCs - since they can always convert some dice to stance dice on their Initiative check - always have a very slight advantage over PCs when it comes to rolling Initiative?

I don't have my core books with me, but I believe that unless there is a valid reason the GM allows, no PC or NPC will start the encounter outside of the neutral stance (i.e. all encounters start in Neutral). Since initiative occurs before individual turns (when they adjust stance) this would suggest the initial initiative checks are made without stance dice.

According to the FAQ section "Initiative: What Stance?" NPCs are always in their default stance as indicated in their stat block, and convert dice as they do in any other check; also, the GM may allow players to convert one of their characteristic dice into a stance dice based on their dominant stance.

I think this slight advantage on the NPC's part is offset by the fact that PC's preempt NPC's in ties. Additionally PC's have access to Fortune Points if they want to increase the possibility of additional successes. So overall, I think it balances out.

Plus if you look at it, Conservative dice have 7 faces with hammers on them, 2 of those have delay symbols which can be penalized with being moved down one slot. Reckless dice have only 5 faces with hammers on them (50/50), though admittedly 2 of those are double successes. However, 2 have fatigue symbols, meaning NPC's could start combat with wounds (fatigue => wound conversion).