Some need to know, with a bit of WealthDesign nice to know thrown in.

The shape of our families in 2017 looks somewhat different than the family shape in 1977. Today many families are blended families and often with more than just one set of children.  Blended families can make financial planning just a little complex!  Often there are issues around how assets are split if one or both partners die untimely. 

We are now seeing KiwiSaver scheme balances getting up to the stage that they need to be considered within the estate planning process too.

There are legal issues and often people don’t want to open the door and play the ‘what if game’, but from my experience, planning for the worst and expecting the best is always best done before a crisis.

Once you can articulate what you want to happen, planning requires an input from lawyers. One of the largest issues we see is that people get the first two parts right, but never finish the paperwork. The outcome can be a basket full of pain, despair and wasted money.

As financial planners, we have experience in organising this process, and understand where insurance can play an important part.

Expect the best and plan for the worst – give us a call today – we make the complicated simple. It’s just what we do.

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John Barber
WealthDesign – a life well planned

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Fun with words

If you watch the Big Bang Theory, my favourite programme ever (apart from Dukes of Hazzard –  nothing is better than that!), you’ll know about Sheldon’s cable show ‘fun with flags’.

Well recently some people have been having ‘fun with words’.  People have been talking about ‘putting clients’ interests first’.  That this was even a discussion was a bit of a revelation for the team at WealthDesign, because we never realised it was a new thing.

The basic idea is that where the outcome for the adviser and the client are in conflict, the right thing to do is ensure the outcome favours the client.  Do the right thing and so on.  Rob Everett from the FMA recently said that ‘clients’ interests first’ “can mean different things to different people, in different situations”.

No, it doesn’t.

I prefer a higher standard – ‘clients’ best interests first’.  This one can be much harder to meet if you can only sell one or two product lines, rather than compare and choose from a wide range of providers and products.

For example, if you go into a bank that sells its own KiwiSaver, and the teller suggests you change to that KiwiSaver, they are considered to be putting your interests first, because they don’t receive a commission for making that sale.  The bank product is not being chosen by the teller over another product, because they can’t sell any other product, so there is no conflict.

What if that bank’s KiwiSaver has much higher fees than the one it replaced?  It might have much poorer returns (we know which KiwiSaver schemes have consistently underperformed) than the one it replaced.  The bank teller doesn’t compare the old scheme to their one.  They won’t give a written statement of advice outlining the pros and cons of switching.  They won’t tell you that their salary-not-commission job is tied to targets, bonuses and KPIs that require them to sell things. They are having ‘fun with words’, at your expense.  That sale would not meet the standard of ‘clients’ best interests’. 

And this is the problem.

If you go to a doctor or a lawyer, and they said to you “just so we’re clear – my duty is to put your interests first, but I won’t necessarily be acting in your best interests”, would you take their advice?

At WealthDesign when we say we put our clients’ best interests first, we think it means what you think it means.

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Regan Thomas
WealthDesign – a life well planned

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The Financial Markets Authority (FMA) has recently released information about advisers who are allowed to give personalised financial advice – these are the Authorised Financial Advisers (AFAs).  There are only 1800 AFAs in New Zealand, and the number of these is falling every year (as the qualification isn’t easy to achieve, plus AFAs tend to be experienced advisers, who are of retirement age).  In the Manawatu, there is only one AFA for every ten thousand people.  If you take out the advisers working as Qualified Financial Entities (QFEs), like the banks etc, the number of advisers who aren’t going to only sell you their employer’s products, are few.

Private banking or personalised advice offered by banks, is only for the wealthy.  For example, you need $1,000,000 in assets to get personalised advice from the BNZ, or $2,000,000 if you are a Westpac customer.

At WealthDesign, we have been offering personalised financial advice for over 16 years, backed up by independent research.  You don’t have to be ‘wealthy’ (although we have clients who are) to get personalised advice,  as we understand that different people, at different stages of life, have different needs.  We have advisers of different ages who will work alongside you, who take the time to focus on your stage of life, and your unique life experience. 

We aren’t owned or licensed by any one insurance company or bank.  We aren’t part of the QFE telling us what and how we should manage your money.  We deal with a wide range of insurance companies in the market and back up our recommendations with independent research.  If you work with us, you have the peace of mind of knowing you have someone who works just for you.  We have your interests at heart, and will be there today and in the long term, working alongside you, to get the best outcome for you, and you alone.  You get total transparency when you work with WealthDesign. 

Give us a call and discover how easy it can be to gain peace of mind with your finances.

John Barber
WealthDesign – a life well planned

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DIY Wills – not such a good idea

There are many things in life that you can DIY – and many that you cannot, or at least, really shouldn’t.  Wills fall into the second category.

You can easily go and buy a DIY Will Kit from the post office or a news agent, but unless you are an expert in Wills yourself, that’s where the ease stops. 

  1. At best, a DIY Will Kit is only good for a “simple Will”. What that really means is a simple family situation, where you are a couple or single person with only a few beneficiaries and you all live in absolute harmony. Or you only have a limited number of possessions such as some household goods and a few bank accounts. So if you were able to time-warp yourself back to the 1950’s, you might be okay. But the moment you have more than this, such as superannuation – and these days that’s everybody, then the Will Kit won’t cut it!
  2. Families will have no way of really knowing if the DIY Will is suitable, because there is no advice. Sure, there may be lots of information provided with the kit, but how do you apply it? And how do you even know if it is correct?
  3. Also how good is the kit in the first place? You can be guaranteed that it has not been prepared by an “expert” (even if it says so on the packaging) – because a real expert would never let anyone do their own Will!
  4. Even if you managed to put a “proper” Will together, there is the big issue of getting it signed correctly without legal assistance. The Courts are littered with cases of DIY Wills that were not signed correctly and the resulting problems of beneficiaries fighting for control of the estate.
  5. Finally, at the end of the day you have to acknowledge that “you don’t know what you don’t know”. Without the help of a properly qualified and experienced lawyer, you may not realise the issues that you are missing in your “simple” family situation. For example, how do you deal with non-estate assets such as superannuation or assets held jointly (especially your own home) or a family trust? Or children/other beneficiaries with special needs, or who are still young when you die? Or families with second spouses and children of previous relationships – there are so many unique situations we live in.

Get an expert to help you. Don’t be tempted to save a few dollars now with a DIY Will Kit, because you may end up risking your entire estate later – and at a time when your family can least afford it! If you want to be referred to a lawyer, just give us a call and we can point you in the right direction.

John Barber

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Is investing in China for you?

China is the world’s second largest economy yet Western investors continue to ignore the investment opportunity that China represents.

Wage growth in China is running at somewhere between      15 – 25% p.a. and the Chinese economy is changing from a mass producer of cheap low quality goods, to a more mature market.

Up until now investing in China has been problematic. This is how it worked.  Chinese incorporated companies had A-Shares that only Chinese investors could purchase.  These companies also had B-Shares available to non-resident investors (non-Chinese).  These shares were on the Shanghai and Shenzhen Stock Exchanges (mainland China).

However from November this year, these stock exchanges will merge with the Hong Kong Stock Exchange.  This will mean that A and B Shares, that couldn’t be purchased outside of mainland China, will now be accessible via the Hong Kong Stock Exchange.

The outcome of this will be that Chinese listed companies will be accessible by the rest of the investment world (for the first time).

Watch this space … the investment world will take this opportunity to buy into Chinese companies. 

If you wish to talk about how you can participate in this changing investment scene, give me a call.  I’ll be happy to talk you through this exciting opportunity.

 

John Barber

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