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

KiwiSaver is ten years old now. There is more than $43.2 billion invested collectively. Of that figure, do you know the details of your slice of that pie?

Even today, 20% of members still have their funds invested in a conservative default scheme. These investors are missing out on potential returns as the average default scheme returned 4.1% for the rolling 12 months, compared to 7.8% for the average balanced fund. If you do the numbers, that means that if you have a balance of $30,000 in your KiwiSaver fund, and it’s in a default fund, you have lost out on $1110 in just this year alone! When you compound that up (over however many decades until you turn 65) it could make you weep!

We have been doing some research and we are finding that:

15% of people don’t know who their investment is managed by.

62% of the members don’t know if their fund is doing okay compared to the market.

43% don’t know if their PIR rate is correct.

53% of members have never had any KiwiSaver advice.

Of the 47% who have had advice, 13% of members got it from a qualified adviser and 19% got advice from a bank employee (who can only give information about their bank’s products).

The trends are interesting. Those who got advice, seemed to understand and have invested in the right fund for their age and stage of life, and they tend to have an understanding of the tax implications. They also understand market volatility and how it will impact on their individual KiwiSaver.

It is nine years since the global financial crisis smashed the global equity markets. For those investors who don’t understand risk (the chance their balances could fall), a market correction could cause a lot of sleepless nights when they see thousands wiped off their KiwiSaver balance.

If you are one of the 53% that has never had KiwiSaver advice, or one of the 47% who wants to ensure management of your KiwiSaver fund is optimised, give me a call and come and have a coffee. I don’t charge for the first appointment. Let’s first see if we are a good match, and then we can go about optimising your investment plan for you and your circumstances.

John Barber
WealthDesign – a life well planned


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Investment strategy counts

We have a new government and despite which side you of the political divide you sit on, one thing we all agree on is things are going to change.  Over 50% of the New Zealand sharemarket is foreign owned and what none of us knows, is how they are going to react to the new order.

One thing I know is we will read about their reaction in the paper the day after it happens. If foreign investors get spooked, they will sell and take their money out of New Zealand.  Our markets will fall and our dollar will go south. Interest rates and inflation in New Zealand will go up. Cost of fuel and living will go up and if we aren’t careful, New Zealand will have a very tough time.  There is already talk of wage inflation, as if just paying people more is good for our economy.

We are tiny on the global stage. Melbourne has more people than all of New Zealand, yet we think we are world leaders – oops, wrong! We are a little island nation miles from anywhere, and really the world doesn’t care (or in some cases) even know we exist.

For over 12 months we have been talking to our clients about building cash reserves and of paying down debt. Our investment strategy has been to buy quality companies with solid underlying assets. Focusing on companies with little debt and strong cash flows.

If and when the New Zealand sharemarket falls in value, our clients will be sitting on the other side of the table, happily buying any shares in quality companies that spooked investors (both foreign and local) are willing to sell, at a discount.

As an adviser, I’ve been through times like this before, and I’ve seen the winners and the losers. I know what strategies work. If you would like to have a chat, my door is always open. Remember, the first meeting is always free.


John Barber
WealthDesign – a life well planned

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Sometimes I think the share market is nuts!

Z Energy (ZEL) is a well-known New Zealand brand. The company owns the Z Energy and Caltex fuel distribution network. It is an integrated supply company, from crude oil to your local fuel stop.

In my view, this company is an infrastructure stock – the success of this company is based on their strong cash flow, and dominant brand.

On the 28 September, ZEL informed the market that they would dial back their debt repayment schedule, and increase the dividends paid to their investors. The weird market has responded by selling down ZEL and the share price is today trading at $7.36 (29th September 2017).

I think ZEL is a great long term investment and any time great companies sell at a discount, I’m the first to suggest being on the other side of the table, and being a buyer.

I suggest investors do some reading – visit and look up the announcements and their annual reports. Make up your own mind, as it is your money.

If you would like to talk about investing, I love nothing more than sitting down over a coffee and sharing ideas about savvy investment.

John Barber
WealthDesign – a life well planned

Disclaimer: Please understand this is not personalised advice. I recommend any potential investor gets qualified advice before making any investment decision.

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Is your insurer for sale?

At present, there are two insurance companies for sale. Both OnePath and Sovereign Life are on the market. They are owned by Australian banks (ANZ and Commonwealth Bank of Australia respectively).

It isn’t surprising the banking organisations are selling these assets as insurers don’t have the return on capital, like other parts of the banking businesses (lending for example).

Banks are in the transaction business while insurance companies are in the relationship business. Insurers rely on good relationships; products that meet the clients needs both today and in the future.  Banks specialise in transactions like lending, overdrafts and mortgages (one-off transactions).

With the potential sale of these insurance companies, we don’t know who will end up owning them, or what the outcome will be. What this will mean for their existing clients is yet to unfold.

If you want to talk over the impact of your insurer being sold, give us a call as we love to catch up for a chat.

John Barber
WealthDesign – a life well planned

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