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

Moving towards retirement

Last week I attended a conference focusing on the aging revolution, specifically the effect of the baby boomers as they start hitting retirement. There are three classes of retirees; we have the Go-Go, the Go-Slow and the No-Go retirees. They have different spending patterns and needs. I have found an amazing bit of software to help these people plan their finances as they move into retirement. This is a personalised solution based bit of software. You can add in your assets & liabilities, income and financial goals. You can add variables and come away with a clear financial picture of your own personal retirement situation. It is also really good for those tail-end baby boomers planning their savings or working out when they will become financially independent.

If you would like to sit down and work through this process, give me a call as I am excited to share this journey with anyone who is interested.

John Barber

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Only 1% of advisers are non- aligned

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.

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Fees matter

It amazes me how many people invest using expensive reporting platforms where the adviser fee is linked to the size of the portfolios. Even worse, these advisers then invest into managed funds that add another layer of fees.  If the investment market goes up by 15%, should the adviser get a 15% pay rise? Even worse is where the fund manager charges a performance fee!  The market does what the market does.  Advisers and fund managers promising alpha (to beat the market) may be telling tall stories. And as far as paying themselves a performance fee benchmarked off cash returns –  in this market – words fail me.

 Fees do matter because at the end of the day, what is left is the return to the investor.

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The age revolution

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? 

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Accidental share trader!

Don’t become a share trader by accident or you could find yourself paying capital gains tax like a property developer. In the past few months we have seen a number of initial public offerings (IPOs)  that have encouraged investors into the market.

Beware becoming a share trader by buying and selling without a buy and hold strategy. Time, purpose and intent all play a part in someone being deemed a trader. The tax consequence could be a hefty tax bill. We recommend getting qualified advice.

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