WealthDesign

Actually, who wants independent financial advice, from an adviser who has experience plus the appropriate qualifications?  

There are some startling statistics coming to light.  Recently financial commentator David Chaplin found that independent financial advice is a ‘rare commodity.’  According to Chaplin’s research, only 325 Authorised Financial Advisers (AFAs), who are not owned by or affiliated to a financial institution, are left operating in New Zealand today.  

The belief that people need impartial advice is WealthDesign’s core philosophy.  We’ve turned down offers to be affiliated or linked to any one organisation in the past and will continue to do so, as we don’t believe that would be in our clients’ best interests.  We recommend the optimal product that will do the best job for our clients – end of story.

When you work alongside us, you’re in a ‘safe pair of hands.’  Phone for an appointment and we’ll show you how we can help.

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On reviewing 2013, it has been a stellar year for investors. Global equity markets are up 24% and the NZ market is up 19% year to date. Many say 2014 may be even better still but I have my own concerns.  Never take returns from last year as a guide for next year.

Equity markets are no longer cheap and the bond market is close to over priced. In fact, some bond investors will have lost money in the bond market in the past six months. In Australia banking stocks and high quality shares such as health care have done well, but some of the big name mining stocks have had a tough year.

New Zealand is looking to be in a good place economically with the Christchurch rebuild, immigration up and the dairy sector firing on all cylinders, but there are some headwinds:

• 2014 is election year and we could end up with a change of government
• the New Zealand Reserve Bank continues to talk about cranking interest rates which will drive mortgage rates back to around 8%
• we have employers holding off on any investment or increasing employment opportunities.

The world wide economy is still driven by the US economy. At some stage the US must stop printing money and start to rewind their debt level. This can’t help but stop consumption; and when you stop to consider that 55% of the world consumers are Americans, like it or not, we are all reliant on the US economy. Eventually this will flow through to the share markets, and the amazing returns we’ve seen in the past 12 months may not continue.

I think Father Christmas is going to bring us another interesting year with some contrast and diversity.  Plan to get some good forward thinking financial planning advice from someone who isn’t answerable to a product supplier or bank.  If you want a good Christmas present for your friends and family, send them to talk to us early in 2014 – our first meeting is always complimentary.

MERRY CHRISTMAS AND HAPPY HOLIDAYS FROM THE WEALTHDESIGN TEAM!

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Having a regular review with your financial adviser really is worth the time.  We hear stories regularly of people who aren’t aware of what they can claim for on their insurance policy, and who could’ve claimed when they were diagnosed and treated for a serious health issue. 

We had a case recently where a client didn’t know they could make a trauma claim when they were diagnosed and treated for cancer.  This person hadn’t seen their previous adviser in an age and didn’t realise the cancer diagnosis and treatment was a legitimate trauma claim on their insurance.  Having had the claim processed and the money in their account at the time would’ve made life that much more bearable while going through a stressful and emotional time. 

You don’t have to know it all – just catch up with your adviser regularly – and let them do what they do do well!

Call us if you have a health issue – client or not, we’re happy to help you out.  

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Research shows that human behaviour and investing mistakes are closely linked.

• Investors like to chase high past returns.
• Fund management companies love to advertise strong past performance.
• High past returns are often poor predictors of future returns.

Fund managers get paid on the amount of money they manage. In fact some even go so far as to pay themselves a bonus when the market goes up. As advisers we want our clients to take the least amount of capital risk, while still allowing them to reach their financial goals.

The paradox is that financial advisers are here to advise and to help people avoid the pitfalls of investing, yet two thirds of KiwiSaver fund managers don’t want financial advisers involved in the retirement planning process, and will not deal with anyone unless they are tied and bound to their company.

The next time you see a well dressed fund manager telling you what great returns they achieved last year – don’t fall for the spin.  Go find an adviser who can provide you with truly independent research. Be an informed investor, not a cash cow for the fund management industry.

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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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