Receiving an inheritance or selling a business can be a great financial opportunity. But it can come with challenges. There is an old adage, 'shirtsleeves to shirtsleeves in three generations', meaning that wealth gained in one generation will be lost by the third. Why? Simply because those who receive it are often ill-prepared to make good decisions about it. Equally this problem can apply to high income earners. A 2009 report from Sports Illustrated 1 found 78% of retired NFL players in the US had gone bankrupt or were under financial duress within two years of retirement. So, what if you do find yourself in receipt of sudden money – large or small? There can be no hard and fast rules. We are all different – our ages, whether we have mortgages, our job situations. But we should all want to first of all draw breath and take a moment. Decisions don’t have to be made immediately. Allow yourself time to let your newly received money and the options you have with it to se...

Most advisers know that around 90% of the variation in a KiwiSaver member’s returns are due to asset allocation and that younger investors should have a greater exposure to growth assets than older investors. They also know that KiwiSaver is a scale game, as member balances are too low to adequately compensate financial advisers for providing much more than a cursory financial overview. It is therefore logical that the legislation is supportive of lower cost robo alternatives and that the Ministry of Business, Innovation and Employment (MBIE) and the Treasury have announced they will be considering making the default option a life-stages approach. NZ Funds recently commissioned independent experts MyFiduciary to review the life-stages options available in New Zealand. Here are some selected insights from their report. Life-stages managers Nine out of 22 managers offer a life-stages option. Of these, four managers – AMP, ANZ, Generate and Lifestages – change allocations infrequ...

With New Zealand interest rates at their lowest level in 50 years I am seeing an increasing number of retired clients who are looking for better returns than are available from bank term deposits. This can be a challenging time for these clients as, for many of them, it is the first time they have considered investments beyond term deposits. Within the financial industry there is an acronym, TINA, which stands for 'there is no alternative'. The acronym recognises that for a group of clients there is no alternative but to diversify beyond fixed interest investments alone. The stark reality is that if they continue to limit their investments to fixed interest alone, it is likely that they will exhaust their retirement capital prematurely. For others the situation is more finely balanced. It could well be that because of the level of capital they have, or their modest annual drawings, that being invested in fixed interest alone may still allow them to meet their objectives. ...

NZ Funds is built around the core belief that comprehensive financial advice adds more value than it costs, so that individuals and families will be better off over time if they work with a financial adviser. In a comparatively short period of time, NZ Funds has become one of the largest privately-owned and operated wealth management organisations in New Zealand.   Over the last thirty years, NZ Funds has managed direct investments which come from the public and indirect investments which come through financial advisers. Based on funds flow during critical points in time, it has been our experience that clients who work with financial advisers make better financial decisions... Please read the full report below.