WealthDesign

Research shows that there are fewer than 1800 financial advisers authorised to give personalised financial advice in New Zealand. The scary thing is,  of these only around 360 are non-aligned or not linked to product providers, banks or insurance companies.  This minority aren’t allowed to advertise that they are independent.  So where do you go to get impartial, quality advice?

In my opinion, being authorised might allow you to give advice but this shouldn’t be the minimum level of qualification one should have, to provide quality advice. There has always been an education pathway before the latest round of regulations.  People should look for those advisers who believe in further education and who have demonstrated this by becoming either a CLU or CFP. These designations carry a higher qualification that AFA, providing their clients with the best quality advice in the market.

I advise you to ask what qualifications your potential financial adviser has.  It’s your life, so shop around to make sure you have the best adviser, someone that you’re comfortable with, and who is well qualified. 

read on...

When analysing the 32,759 financial advisers in New Zealand, only 325 are Authorised Financial Advisers (AFA) who could be classed as non-aligned or independent (even though they aren’t legally allowed to say they’re independent!).  Don’t get us wrong, we aren’t saying 99% of the market are incompetent or giving poor advice, it’s just they have split loyalty.

If you are getting advice, you want to see a written report. This should include what the product is and why it is suitable for you. If the adviser is tied to a provider or has a conflict of interest, it should be clearly stated in their disclosure statement.

Even in the new world of regulation, it pays to know who is giving you advice.  Do some research, and ask some questions.

read on...

We know about yuppies (young professionals living a luxurious lifestyle), dinkies (double incomes no kids) and now we have dippies – not drunken Lincoln or Massey students,  but over 65 year olds,  still working (double incomes, plural pensions).  These dippies think 65 is the new forty – not a bad mind-set, I think!  These guys are people over 65, still working and, in some cases, still caring for young children (thanks to a second time around marriage/partnership). But, they are collecting the pension.

Today over 55 year olds comprise 24.7% of the population but own 54% of the nation’s wealth. In 2031, baby boomers will make up 32% of the population and hold even more of the country’s wealth. We are working harder, staying in our jobs longer and focusing on staying  fit and healthy.

 Are we going to out live our money?  What does your retirement look like? 

read on...

Many kiwis are in the bond market and just don’t realise it.  Of the $15.167 billion in KiwiSaver, $10 billion is in either a default fund or conservative funds.  Of this, 79% of these funds are invested in fixed interest assets.  The result being these KiwiSaver funds are going to perform below average in a rising interest rate environment.

When interest rates increase, the bond market falls.  Bonds, unlike shares don’t rally again, so you end up with lower returns. 

Talk to us now BEFORE interest rates rise, to ensure your KiwiSaver is working optimally for you.

read on...

A number of clients have asked my opinion on this share offer.  Here’s my take:

Z Energy Limited is a fuel retailer operating multiple stores under a franchise arrangement.  The company is very profitable and is projected to provide a cash dividend of around 5.9% per share (gross).

Z Energy Limited is floating shares on the NZX.  They have given an indicative price range for the shares of $3.25 to $3.75 per share.  Z Energy Limited is looking to raise between $780-$900 million.

The promoters and the present owners, Infratil and the New Zealand Superannuation Fund, will continue to hold between 40-50% of Z Energy Limited once this initial public offer has been completed.

The prospectus/offer document can be viewed at www.z.co.nz/investor

As with any share investment, there are specific risks attached to the individual company.  The prospectus has a full section on these risks and I suggest you read this carefully before investing.

My concern is the high level of debt that this company holds.  As we have seen in the past, this can cripple even the best organisations in adverse environments.

On the positive side, the company has been well run, is profitable and has a strong brand and market share in core industry.

I believe the institutions will support this stock and it may be oversubscribed. 

If you choose to buy these shares, I would add these to a buy and hold portfolio.  The strong dividend flows will underpin the share value going forward.

The company could also be thought of as a part property, part retail and part infrastructure stock.

DISCLAIMER – These are my personal views based on publically available information.  I am not employed or contracted to an issuer.

Any choice you make to invest or not to invest in Z Energy Limited, is yours alone. 

read on...