Last year this column ran a series of articles which focused on various age groups and the types of financial decisions that influenced their overall wealth. I found it interesting that many of those ‘markers’ of success were not related to earning capacity, but due to learned behaviours. In December’s column I considered the 65 plus age group and I thought my article series had come to a natural conclusion. However, a recent client meeting reminded me that there is a further age group worthy of specific mention – the 80+ group. It is not too many years ago that this group would only have been mentioned as a foot note. Today this group makes up 12% of the population over 65 and statisticians tell us that this number is likely to double over the next 30 years 1 . One of the realities of this age group is that it is generally a period when we can expect to experience some cognitive decline. Overseas studies 2,3 have shown that at age 80 around 15% of the population will ...

Why asset allocation and advice beat everything else. Financial advice is much like other professional services; if clients put their mind to it they could probably do most of it themselves. Little of it is rocket science. But just as we don’t want to spend our weekend doing the family’s tax returns, writing a will or establishing a trust, an increasing number of New Zealanders are embracing the use of a financial adviser to ensure they get the basics right. So, if you have decided to make a living advising others what to do with their money, you will want to know the best way to grow your clients’ wealth, and then recommend that to as many clients as possible. The good news is, in our view, the formula for success as a financial adviser is surprisingly simple. What is also surprisingly simple is that experts around the world from Buffett to Bogle agree that it has little to do with active or passive, global or local, choice of manager or how much they charge; and ...

Financial markets over the last few years have enjoyed the equivalent of a 'long hot summer' characterised by calm weather and warm sunny days. From experience, we all know that long hot summer days can occasionally encourage excess in the form of too much sun or fun. The same excess is also a risk for financial markets and the wider economy. Locally the good times are obvious in the number of cranes on the skylines of our major cities and in the difficulty of finding staff. The United States is also seeing similar capacity constraints as labour market surveys show there are more job openings than there are unemployed. There is a saying that financial bull markets do not die of old age. Instead, they end due to a combination of capacity shortages constraining growth and central banks increasing interest rates to counter the risk of rising inflation. In the United States this process in now well under way as the Federal Reserve has raised interest rates eight times alr...

It was back in September that I started this column series to identify the behaviours of financially successful people. I started with those clients in their twenties and then moved through the subsequent decades considering the various 'markers' at each point. If we assume that you have now made it to age 65, then you are entering what I term the active post paid work phase. You will notice that I have avoided the use of the 'r' word. Today the concept of a traditional retirement, complete with a gold watch, is largely a thing of the past. I now more often see a phased transition from full time employment to an active retirement which includes a mix of paid and voluntary work.  This phased transition from full employment to full retirement allows for both economic and emotional adjustment. This is a time when the habits and behaviours previously established (both money and health) either start to pay 'dividends' or the reality that we have not do...

Mid-January 2019. This is the latest date announced for when the UK Parliament will vote to approve (or not) the Brexit agreement already agreed between the UK Government and the European Union (EU) leaders on November 25. This vote will occur after Parliament has debated the government motion to approve the EU withdrawal agreement and accompanying political declaration. This delay was after it became clear that, based on stated views of many Government MPs, there seemed minimal likelihood the motion would be approved With a ‘no deal Brexit’ a clear possibility (and using British historical analogies) the key question in my mind is; ‘Will Brexit be akin to the evacuation from Dunkirk – a triumph in the midst of a dramatic defeat that ensured Britain could fight on, or will it be like the fall of Singapore - a calamitous disaster that had an irreversible and materially negative impact on the British Empire?’ On November 29 the Bank of England (BOE) Governor Mark Carne...

What will your retirement look like? What will you do? How will you continue to provide meaning to your life, purpose? And what for you will be the physical, intellectual, and spiritual goals that those who continue to thrive as they age challenge themselves with? Money is the engine that drives many of our ambitions. But this isn’t a money discussion. Its what we can do with our money that is valuable. Our conversations should be about purpose. And if I had to define for me what a financial planner can do then that is it. To help with the decision of why you want the money in the first place. And in defining a future life to determine how big or small your retirement fund needs to be. And when. Which seems much more efficient than an any road will do approach. What if the future life you defined meant that you could, and were excited to retire early? Or a deliberate choice to work longer. Or perhaps a blended approach – working but with extended experiences and breaks. L...

Over recent months this column has summarised my thoughts on the key behaviours that help people ‘be good with their money’ as they journey through life. So far, I have considered what financial success might look like for those in their twenties and how this evolves as we move through our thirties and our forties . This month I will cover the period loosely called middle age - the 15 years between 50 and 65. In financial terms I label this period ‘the age of realisation’ – but more of this later. Firstly a recap; in our twenties it is all about learning to live within your means and starting to find that balance between enjoying today and planning for tomorrow. This includes; balancing your finances, establishing a savings pattern, understanding the implications of debt, writing a will, understanding insurance and giving something back - perhaps through voluntary work. For most people in their twenties formal planning will be limited to establishing KiwiSaver and setting rela...