WealthDesign

Which fund is your KiwiSaver in?  If it’s in a conservative fund, it’s averaged 6.6% over the past five years.  In a growth fund?  Return has been more like 9.5%.  Today there is $33.4 billion of New Zealanders’ money invested into KiwiSaver schemes. The largest amount is in ANZ ($8.67 billion) followed by ASB ($6.226 billion).  ASB has 50% of their clients in their conservative fund where as ANZ only 11 % are in the conservative fund.

Here’s the problem – if you’re a long term investor (in KiwiSaver), you’re missing out on the true return you should be getting. For example, the conservative funds have averaged 6.6% for the past five years against the growth fund, that has returned 9.5% for the same period. The result could cost some investors thousands in lost gains.

We often hear of investors being told by bank tellers to move from one provider to another “so you can see your daily balance of your KiwiSaver”. What many people don’t know is that the tellers have targets and Key Performance Indicators (KPIs) to meet. If they get bonuses or any other incentives, under the FMA rules today (unlike non-bank advisers), they don’t need to disclose these benefits.

We often see people being moved from a top performing fund to a fund with a dubious performance history. For example, if you moved to the Kiwibank balanced fund last year, your return would have been 3.1% – the worst performer of all 18 funds. To make it even more disappointing, this fund has $1.064 billion invested, yet has continuously performed at the bottom of the pack.

My question is, who is benefiting from this? It seems every time I visit a Post Shop to buy mileage for my car, I’m urged to move my KiwiSaver to Kiwibank.

At WealthDesign, we buy independent KiwiSaver research, each quarter, that compares all the KiwiSaver managers and the individual fund performances. We analyse the performance of the various fund managers and help our clients make informed decisions. It isn’t about moving from one fund to another to meet targets or KPIs. It is about providing our clients with the right information, so they can make informed decisions.

KiwiSaver will eventually become one of the largest assets most of us own. How quick and how well your asset grows, will depend on how well it is managed.  There’s more to your KiwiSaver fund than just being in it.

Check your KiwiSaver – give us a call today.

Source: Morningstar Research 260716

John Barber
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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June is upon us, so ensure you don’t miss out on the full $521.43 government contribution by confirming you have paid the minimum $1,042.86, for the previous 12 months.  If you have fallen short of the minimum contribution, you can top up prior to the end of June, to make certain you receive your government contribution.

IMPORTANT:  If you haven’t already, top up your KiwiSaver as soon as possible, as it can take a while for your KiwiSaver provider to process the payment.  Don’t wait until the last week of June, as you may well miss out on what you’re entitled to.

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June 2016 is fast approaching, so ensure you don’t miss out on the full $521.43 government contribution by confirming you have paid the minimum $1,042.86, for the previous 12 months.  If you have fallen short of the minimum contribution, you can top up prior to the end of June, to make certain you receive your government contribution.

IMPORTANT:  Please top up your KiwiSaver at the beginning of June, as it can take a while for your KiwiSaver provider to process the payment – we don’t want you missing out on what you’re entitled to!

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Isn’t travelling a right of passage for us Kiwis? Unfortunately, for the next generation, things aren’t as simple as buying a plane ticket and loading a pack with jeans and a few tee shirts.

Here’s what you need to do:

• Make sure you have quality travel insurance for the whole time you are away.  Asia might be a cheap place for a holiday, but you wouldn’t want to be hospitalised in a third world country.  Not all travel insurance policies are equal, so get good advice.
• Check you KiwiSaver payments. If you are away and stop paying into KiwiSaver, you might find yourself back to square one with the ‘first home subsidy’ rules.
• If you have a student loan, know the rules.  If you are only out of the country for 183 days and have lived in New Zealand for the previous 183, your interest on your student loan is written off.  If you are outside these rules, you are going to be paying interest and the government expects you to make the repayments.
• Australia has always been the alternative work place of choice.  Unfortunately, Kiwis are clearly discriminated against in Australia.  If you plan to work over there, make sure you get your insurance sorted before you go.  Cover such as trauma, total and permanent disability and income protection cover taken out in New Zealand, will cover you while you work in Australia.
• Lastly, make sure you have all the right visas etc.  Flying 10 hours to spend 20 hours in a holding cell and then sent back home, isn’t fun.  This happened to one of our clients – yes, it does happen!

Travel is great – it is important to get out of New Zealand to realise how small and insignificant New Zealand is on the global stage. It also makes you appreciate this great country we are privileged to live in. 

We know what possibilities could arise, because we’ve seen them. Give us a call and before you know it, you’ll be packed, prepared and ready for the adventure of a lifetime!

John Barber
WealthDesign – a life well planned

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