WealthDesign

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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In New Zealand we are fortunate to have a world class accident compensation scheme. We all hear the sad stories of ACC not meeting people’s expectations, but it is still a great scheme in my opinion, and has many benefits.

At present we are seeing a lot of insurance advisers giving blanket advice to reduce ACC and take out private insurance. In some cases this is prudent, especially if your income would continue in the event of a period off work i.e. dairy farmers. But it’s not for everyone and this is where I get concerned.

ACC pays out after seven days versus private insurance that pays only after 30 days off work (at best). ACC covers you even if you have risky hobbies such as motor sport or mountaineering.  Most private insurers would exclude these types of hobbies. ACC also has an accidental death benefit built in as well.

The other thing we see is clients with back and knee exclusions on private cover, and advisers suggesting reducing ACC, just based on a short term premium savings on ACC. This doesn’t always bring about the best outcome.

ACC is a complex product and needs specialist advice.  Before you change ACC because of a sales pitch, ask for a written report, as for the proof that the person actually knows ACC in depth.   Make sure you are talking to someone who really knows the complexities of ACC and not just someone using ACC as a way to make a sale.

If you want quality ACC advice, or you want to double check what you have had recommended, give us a call and we can refer you to a firm that does nothing but handle ACC. 

John Barber

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It’s often overlooked because it’s not particularly sexy to mainstream investors, but there is huge opportunity in global farmland and sustainable farming.

You see, global population has increased at a staggering rate over the past century, with an increase of one billion in the past decade alone and a projected world population of nine billion people by 2050. Yet today’s global food production continues to leave over a billion people undernourished.

There has also been a proliferation of a new middle class with increased purchasing power in emerging markets, coupled with a shift in dietary trends, which has increased the demand for meat.

This global population growth and an increasing reliance of the global livestock industry on grains for feeding its livestock has, in turn, led to an increased demand for grains that will continue to trend upwards.

Add to that the millions of acres of land lost to urbanisation every year and the negative impact of extreme weather events, soil degradation, water scarcity, and rising temperatures on agricultural productivity.  Then there’s increase demand for biofuels, and the ‘finite’ nature of arable land to meet this ever-increasing global demand, and you’ll begin to understand why global farmlands — a prime asset — continue to be an attractive investment on a global scale.

On a local scale, we are starting to see a move into farm syndication that will allow investors to invest directly into land. Today farm syndication makes up 7.1% of all New Zealand farming operations. The fact is that not all syndicates are as good as another and prudent investing is wise.  If you would like to discuss what is available, and how best to take advantage of it, please do not hesitate to give me a call.

John Barber

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The world of farm business is changing. In the past, if a farmer wanted to expand, he called the bank and borrowed the cash. Today around 7.1% of all farms are some form of equity partnership. Farmers are finding it is better to be part of something rather than risk all by over exposing themselves to any lender.

These investment structures are a joint venture between groups of individuals and can range from owning just the land to being part of the land and farming business. All equity partnerships aren’t equal and investors need to be wary. One needs to understand what they are investing into. Farming is a long term investment and the asset liquidity isn’t great but it can be very profitable over a ten year period. It is important to do due diligence with an informed third party.

It is important to understand the costs, both up front and on going.  Good governance is also vital.

My background as a Lincoln graduate, farmer and a qualified financial planner, puts me in a good position to assess these opportunities.  If you want advice on how to invest into farming by direct ownership, please give me a call.

John Barber

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There are a lot of people out there who are uninsured, and new approaches aimed at reaching them are welcome, as we all too often see the disastrous results of underinsurance, or no insurance.

There are companies launching online-only life insurance products, which appear to be aimed at people who are time poor, DIY-ers.  Great idea in theory, as they are trying to be simple, easy, and quick. However, trying to simplify an often comprehensive concept doesn’t always give the client the best outcome.  The fine print all of a sudden becomes much larger at claim time, and what seemed like a simple, easy and quick buying decision can end up costing – both in time and money!

Most non-adviser products advertise along similar themes, sometimes claiming to be cheaper because they don’t have to pay commissions (they instead spend a fortune on expensive advertising). The reality is these are generally highly limited insurance policies, filled with draconian exclusions that are often priced higher than adviser-based products.

Many people have complex business or family affairs, legal structures, or health issues that need to be understood. Most would appreciate some help working out what type of cover, and how much of it, to buy.  All appreciate having assistance preparing the documentation for a claim and dealing with the aftermath.

For most people, advised insurance ends up costing less than online or direct products.  After comparing several insurers, an adviser will select a policy that is suited to you, and will not sell a policy that has unusual exclusions, wide reaching ‘anti-claim’ criteria and contentious wordings etc. 

So it turns out that using a good adviser will mean you get a good policy that will work when you need it.  Someone to help choose, obtain, maintain and claim on the policy, and it will cost less than doing all the work yourself. Plus, you’ll have the support of an adviser who has your back, and who wants the best outcome for you.

Regan Thomas

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