KiwiSaver is rapidly proving as much of a bonanza for the marketing industry as it is for the wealth management industry. Some providers are spending seven figures annually to promote their various investment propositions. And as one would expect, if you let the ad executives loose, the key messages are, well… 'loose'. In addition to surveying clients to determine what they want out of KiwiSaver (see Good Returns article What New Zealanders want from KiwiSaver may surprise you ), NZ Funds has been researching what really determines how much money a KiwiSaver member retires with. The answers are logical and intuitive to long-term practitioners of financial advice, but will no doubt come as a shock to fans of Mad Men. To answer the question: "What matters most in maximising KiwiSaver by retirement?" the NZ Funds Wealth Technology Team started with an 18 year old on the average full-time youth earnings of $38,324 per annum. The 18 year old’s earnings increase ...

If we are living longer what does a good life look like? A paper from the Pensions Policy Institute in the UK, entitled Living the Future Life 1 explores just this issue. If our plan is one of growing to adulthood, followed by 40 years of work and family and then 20 years of retirement we might need to rethink. In a longer life the boundaries between study, work, family and leisure will likely become blurred. A multi stage life could include multiple career transitions and gradual, flexible retirements. Families will commonly be up to four generations. With a longer life comes opportunity as well – we will have greater choice in how we live our lives. But we will need to be proactive. We don’t want to be older for longer, but younger for longer. Being proactive means taking steps to improve our work opportunities, our health and social care, our family and our social networks. Relationships are central to people’s lives, and good health and wellbeing are reliant on ...

As a financial adviser it has been my privilege to work with clients who have built significant wealth. This has taught me that there are many different paths to financial independence. When I look back on almost 30 years of helping people with their finances there are some striking similarities between those that have been successful. I have concluded that life is a balancing act between, enjoying the life you have now while at the same time building the future. As we pass through our earning years; early adulthood (20 to 30), mature adulthood (30 to 45) and middle aged, say (45 to 65) I believe that there are various ‘markers’ or lessons that can be helpful when charting our financial progress. As a series of column topics I thought it might be interesting to examine each phase to identify the issues that financially successful people learn early. So let’s start at the beginning - the 20 to 30 year old age group. If you get the foundational behaviours right here then the ...

As the end of the decade draws closer, independent advisers face a dual threat: further regulation and lower returns. While considerable debate surrounds the introduction of the new rules for financial advisers, returns may prove the bigger threat to incomes. How advisers and managers navigate these dual threats will likely determine who the industry’s winners and losers will be. Low returns are an insidious threat. Investors, and their advisers, have enjoyed a great run. Since the end of the Global Financial Crisis in March 2009, investors have enjoyed strong investment returns, both here and internationally. The NZX50 Index has risen 317%, while the global share market (MSCI ACWI Index) has returned 245%. During the same period (March 2009 to August 2018) New Zealand and international interest rates have fallen, generating capital gains for long-term bond holders. Share and bond valuations indicate that both asset classes are now between 1.3 and 2.4 standard deviations above t...

Perhaps it’s just a demonstration of evolutionary theory in practice, but I find it fascinating that it can be the unexpected benefits of some new innovations that end up adding greatest value. The medical profession seems full of examples. One relatively recent case was the discovery of Viagra (Sildenafil). Although originally developed to treat hypertension (high blood pressure) it was during clinical trials that an interesting unexpected benefit was discovered. It was that unexpected benefit that caused Viagra to be one of the fastest selling prescription medicines in history. So, what does this have to do with financial advice? Well, back in the early 2000’s, when the Government was looking to encourage New Zealanders to save for their retirement, they sought advice from the accountancy profession and the funds management industry to find out what features any new scheme (which came to be known as KiwiSaver) would need if it was to be successful. The feedback they rec...