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

Who said New Zealanders don’t save?

The total KiwiSaver balance for all investors is now $ 19.94 billion of savings. Who said New Zealanders don’t save?

With rising investment balances, investors need to consider the fees they are paying and which asset allocation they are invested into. In some cases they are paying top fees for the lowest return.

Category

Max TER %

Min TER %

Median TER %

Av 5 yr return %

Aggressive

1.89

0.93

1.27

10.66

Growth

1.99

0.66

1.07

10.30

Balanced

1.29

0.97

1.03

  9.21

Moderate

1.17

0.56

0.94

  7.89

Conservative

1.05

0.38

0.69

  6.45

 

We have access to independent research that can compare fund with fund and manager with manager. Fees and performance really matter, and you need to be an informed investor. This is especially important as most of the marketing around KiwiSaver focuses on things like access to your KiwiSaver balance; not the real issues of fees and performance.

Our door is always open and we are happy to help you become an empowered investor.

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Why invest in farming

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.

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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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Goals –are your goal posts in sight?

a Soccer ball on a soccer field

 

There is an old saying if you don’t know where you are going, how you will ever know when you get there? In investments this is very true. Last week we had our annual external audit for WealthDesign and one thing that was drummed into me was the need to always have clearly defined goals (defined in a clear and measurable way) on file, for our clients. These goals should always be the benchmark that every investment decision is weighed against. In truth this is easier said than done, and takes discipline and thought to achieve.  Which got me thinking … this applies in all of our lives, not just our businesses.

For example, say you are a trustee of a family trust or you hold a power of attorney for your aging mother.  Having the basics right from the start, is vital.  You have to know what you are trying to achieve.  So work backwards.  What does the family member or beneficiary require to live comfortably and without stress?  This involves numbers!  You can’t just be airy fairy and say I want my mum to be happy and comfortable.  What will that look like? Discuss this with family.  Communication is vital.   You need to be able to formulate how much money your investment needs to provide to have the outcome desired. 

This is where we help you.  It’s often new territory you’re treading, so having the support at hand, with an expert on your team, is invaluable.  We care!  Call us!

John Barber

 

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Confused about financial advice?

Often people are confused about what a financial planner really does. They think it’s all about investing money and only the wealthy should talk to us. They think it is about getting the latest shiny investment.  This is miles from the truth. We are here to help people achieve their goals in life. This means looking at their individual situation and making suggestions of how they can make changes to create a better future, for them and their families.

Sometimes I feel that as an adviser, independent advice seems to be marginalised and the institutions want to reduce the options for the public to find good advice. Their idea of quality advice is a teller that can only sell their products, and that advice is a commodity like a cheque account, a cookie-cutter process that treats every person the same.

I believe our generation has been hoodwinked by the banks. For example we often find people in their mid fifties with large mortgages and little savings for retirement. Yes, they may be in KiwiSaver but they don’t have time to save enough to really support themselves in retirement.  Financially these people need to make some hard decisions. They may need to down size, repay debt and start serious saving for retirement.   The strategy may even include planning to work until age 70. It will often include making sure there is a back up plan if one’s health declines. It is vital to set out a strategy and stick to it and this is where having a qualified experienced adviser is vital, someone who has your back and is here for you for the long haul.

It’s not about shiny investments or selling a product. It’s not about trying to get the last inch of performance out of your money, it is about working out what is right for you and helping you taking action, over your lifetime.

Bankers are great at banking.  Financial advisers are great at giving financial advice.  Horses for courses.

John Barber

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When looking for quality financial advice …

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. 

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