ASSET NOVEMBER 2020

The father of financial planning farewelled Confessions of an investment addict Disclosure changes explained

NOVEMBER 2020 | WWW.GOODRETURNS.CO.NZ

Time to get cyber secure

ADVERTORIAL

OMNIMax

Q&A:

Should I shift to a digital advice process?

Have you been thinking about going digital but not sure if it will benefit you and have no idea where to start? Jonathan Taylor, Managing Director at OMNIMax Software Solutions, answers your questions about going digital with your advice process…

How will automating my advice process support my business?

With an automated workflow you’ll save time and that’ll allow you to handle a greater workload without adding more resources ultimately improving your efficiency and profit margins. Output your statement of advice in just minutes.

Will it help me when the new regime comes into force?

The new regime talks about making sure that clients understand the advice you give.

By going digital you’ll be able to easily tick that box with visual outputs from your advice software – modelling different scenarios for your clients and showing them the impact their decisions have on the outcome of their investments. Plus, record keeping is no longer an onerous task with complete audit trails of the advice you give.

Can I model and quickly compare scenarios for my clients?

We feel that modelling tools are an important part of the advice process to help

02 | ASSET NOVEMBER 2020

clients easily understand the advice they’re being given, so we’ve developed a number of apps in this area to model investment scenarios with goals and visually show to clients the value of the advice you give.

Is it expensive?

It may not cost as much as you think. At OMNIMax a small upfront fee covers the setup of your solution, then a monthly subscription cost makes it much more affordable than developing something yourself. We’ve got plans from just $99/month.

Is it going to take a lot of time?

We do most of the work. You provide us with your templates, or you can use ours, then we can have you up and running in just a few short weeks.

I use a software solution, but I can’t customise it, is this possible?

For sure! It can be very frustrating not being able to get your digital workflow to suit your business, we use our templates as a starting point and then alter to suit the way you work.

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My business is small, is there an option for me?

At OMNIMax we have a range of cost-effective out-of-the-box solutions for small advisory businesses, to automate their advice workflow, that are quick to get up and running. We also deliver scalable or bespoke solutions for larger organisations for KiwiSaver and investment as well as mortgage and insurance. We have worked with some large clients such as BNZ, but equally we work with smaller advisory firms that may have just 1 or 2 advisors. Our software is very flexible.

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Call Jonathan on 027 4377 805, visit our website @ www.omnimaxsoftware.com or email us: info@omnimax.co.nz.

Contents | November 2020

16

26

Are you cyber secure?

Daniel Smith on the real threat a breach in data security can pose to even the smallest business.

Disclosure unpackaged Leigh Hodgetts with highlights from Financial Advice NZ’s ‘Bounce’ Roadshow disclosure segment.

UP FRONT 04

EDITORIAL

05

STRATEGI

06

10

12

GRTV

14

REMEMBERING FRED DODDS

Farewell to an industry great.

David Greenslade's 'getting serious about the new Privacy Act'.

22

NEWS Ethics motivates NZ investors; Financial Advice NZ reports ‘trust in advice’; high upfront commissions likely to stay.

PEOPLE New CEO for Fidelity Life; role creation at Wealthpoint; board member announcements from Financial Advice NZ.

Financial Advice NZ CEO Katrina Shanks tells GRTV about her ‘journey seeking financial advice’.

Philip Macalister on the great contribution Dodds made to financial planning.

INFLATION OUTLOOK Mint’s Anthony Halls takes a critical look at how inflation is trending.

08

FEATURES

24

28

Shannon Murphy and Mark Brown: where to invest when interest rates are low.

REGULARS 30

INVESTMENT COMMENTARY What are the implications of near-zero interest rates for investors?

PROFILE What makes our regular investment contributor David van Shaardenburg tick?

HARBOUR SPONSORED CONTENT

32

MORNINGSTAR Morningstar data.

EMBRACING A NEW NORMAL Naomi Ballantyne with nine industry positives to come from our Covid-altered world.

WWW.GOODRETURNS.CO.NZ | 03

UP FRONT | EDITORIAL

I

Farewell to ‘father of financial planning’

have to start this editorial with a tribute to the late Fred Dodds.

Fred was described at his funeral as the “father of financial planning”.

It’s a great and appropriate title which he deserves.

During his four decades in the financial planning world Fred relentlessly drove towards professionalism and raising standards. He was also responsible for bringing many new advisers into the profession.

Besides his corporate life, which included stints at Government Life, Prudential and Tower, Fred made massive contributions to many of the industry organisations over the years, culminating with being the chief executive of the Institute of Financial Advisers, before it became part of Financial Advice New Zealand.

Fred is also remembered as a great raconteur. Indeed his story-telling ability is something he will be warmly remembered for by anyone who heard him speak.

In his final closing comments when he accepted the Outstanding Contribution

to the Industry award last year Fred said: “I’ve enjoyed my journey.

You enjoy yours.”

We have a feature covering Fred’s life starting on page 14.

While this issue marks the end of Fred’s life it also marks changes here at ASSET. From this issue onwards we plan to publish the magazine bi-monthly.

We know how much advisers value the information we provide. Our model has been to provide it to all financial advisers for free and fund it through advertising revenue.

Unfortunately, the big end of town has a very poor record of supporting us.

They are happy to spend significant sums of money on conferences, roadshows and other events, however supporting an industry-wide magazine is something many fall down on.

In saying that I would like to take this opportunity to acknowledge those fund managers, insurers and other groups which have supported us.

We wholeheartedly encourage you to engage with these firms, find out about what they offer and support them where appropriate.

In this edition we have a feature on an important issue everyone in financial services should have a laser-like focus on.

Privacy and data security.

Advisers hold a significant amount of personal information on clients and they need to ensure this is kept safe and secure.

A comment made at a recent event was that cybercrime is the new gangland for criminals. Forget the days of robbing banks and physically breaking into places. This, like so many things in our lives, is now being done online.

Also on December 1, new privacy laws come into effect. Everyone handling personal data needs to be aware of the changes.

Head office and advertising

Contributors

Moved offices?

Photography Credit

ASSET is published by Tarawera Publishing Ltd (TPL).

TPL also publishes online money management magazine Good Returns GoodReturns.co.nz and TMM – The Mortgage Mag.

1448A Hinemoa Street, Rotorua PO Box 2011, Rotorua P: 07 349 1920 F: 07 349 1926 E: philip@tarawera.co.nz

Publisher

Philip Macalister

Editorial Manager Joanna Mathers

Subeditor

Dawn Adams

Design

Samantha Garnier

4 | ASSET NOVEMBER 2020

Anthony Halls, Daniel Smith, David Greenslade, David van Schaardenburg, Jonathan Taylor, Leigh Hodgetts, Mark Brown, Naomi Ballantyne, Shannon Murphy Brooke Cagle, Mark Finn, Dan Nelson, Kaitlyn Baker, Jeshoots, Marten Bjork, Trent Erwin

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Jill Lewis P: 07 349 1920 E: jill.lewis@tarawera.co.nz

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All contents of ASSET Magazine are copyright Tarawera Publishing Ltd. Any reproduction without prior written permission is strictly prohibited.

ISSN 1175-9585

UP FRONT | SPONSORED CONTENT

Time to get serious about new Privacy Act

T

Strategi’s David Greenslade on what to expect on December 1 and what needs to be done to prepare for the arrival of the updated Act.

echnology, globalisation and public expectations have all helped change the face of privacy as we know it. Now impending new privacy laws in New Zealand will reflect this and advisers need to take them seriously, according to Strategi founder and executive director David Greenslade.

The Privacy Act 2020 (the Act) comes into force as an early Christmas present, on December 1, 2020. It repeals and replaces the 27-year-old Privacy Act 1993 and is aimed at strengthening privacy protections for our current environment, updating and modernising existing privacy laws to ensure personal information is kept secure and treated properly.

“There has been a generational shift in technology usage, business practices, and public expectations about security of personal information, both domestically and internationally and the new Act reflects this,” Greenslade says.

What does this mean for your business?

While much of the content of the current Act will remain, there are some significant changes that advisory businesses should be aware of.

“The changes affect all organisations that collect, store and use personal information about their employees and/ or clients,” Greenslade says.

“Some examples of key changes include mandatory reporting of privacy breaches, strengthened cross-border

protections of personal information, and the expansion of the Privacy Commissioner’s powers.

“These reforms aim to not only improve the state of New Zealand’s existing privacy laws by making them fit for purpose in the current environment, but also to keep them relevant and effective in line with global trends in privacy and data protection.”

Privacy is a big deal Privacy of personal information matters, says Greenslade.

“Advisers need to take it seriously and have the right policies and processes in place to meet both client expectations and legal obligations.”

He says some businesses have plenty to do to prepare, and Strategi has already been helping its clients get ready.

“We’ve run webinars with over 600 attendees, produced a guidance note, a 26-step action plan and a number of templates relating to new disclaimers, privacy statements, privacy policies and more,” he says.

“This Privacy Act 2020 Toolkit that we have created has been a big hit with all those looking for practical tips on how to comply with the Act.” Greenslade offers the following examples of just some of the areas advisers need to address.

• Appoint and train a Privacy Officer.

• Understand and map your business’ information so you know what you

collect, where you collect it from and the purpose for collecting it.

• Get renewed consent from clients where necessary.

• Change your fact find documents, website, client agreements, etc to reflect the changes.

• Review agreements with third party service providers to ensure they have sufficient privacy protections.

• Review your external privacy statement and policy, and update where necessary.

• Review your internal privacy policy and other related documents to ensure they are up to date and reference the Act. A detailed Continuing Professional Development training module on the Privacy Act 2020 has been developed and is available on Radar – the Strategi Institute’s online education portal.

Completing this module, along with implementing the processes contained in the Privacy Act 2020 Toolkit, will make compliance with the Act easy, says Greenslade. A For further information on meeting your Privacy Act 2020 obligations, contact Strategi Ltd on: compliance@strategi.co.nz Strategi Group is the leading provider of compliance and training services for the New Zealand financial advisory industry.

WWW.GOODRETURNS.CO.NZ | 05

UP FRONT | INFLATION OUTLOOK

It’s inflation Jim, but not as we know it Mint Asset Management’s head of investments Anthony Halls takes us down memory lane looking at how inflation has been changing its spots and explains Covid-19 is not the only reason we are in these uncharted interest rate waters.

C

ovid-19 is being blamed for many things; some of which are fair, but others not so much. One of these such is the current ultra-low interest rates and ramp up in fiscal spending around the world. It is true that the economic fallout from the pandemic has prompted central banks to cut rates to near zero (and sub-zero in some cases), and it is also true that fiscal balance sheets around the world are being put to (more) work for the same reason.

However, had we had an economic downturn for any other reason (which 06 | ASSET NOVEMBER 2020

BY ANTHONY HALLS

is quite probable after a decade of growth since the GFC), the same policy decisions and tools would have been applied – perhaps in differing speeds and quantities, but the same nonetheless.

Hence, this article is not about Covid-19 or the economic fallout therefrom. This article discusses the changing drivers of inflation, and how it hasn’t died – it is just showing up in different places.

For decades, liberal (or free market) economics has held sway throughout the developed world. There has been distinction and separation of the fiscal authority from the monetary authority.

Fiscal management has remained in the purview of elected governments and the Treasury or Finance Ministry or Exchequer. Monetary policy has been exercised by (relatively) independent central banks executing under specific mandates from their respective governments. These mandates have typically held (low) inflation targeting as their centrepiece, often supplemented with economic or employment targets as well.

This is still true today. Our own Reserve Bank of New Zealand has an objective of maintaining a stable general

‘Significant disinflationary forces have been at work well beyond monetary policy’

‘With fiscal spending on the rise, globalisation on the wane, and central bankers wanting to achieve their mandates there is a reasonable chance that inflation rides again’ level of prices over the medium term and supporting maximum sustainable employment. The stable prices component is interpreted as maintaining the Consumer Price Index (CPI) near 2% and between 1% and 3% pa over the medium term.

Independence of central banks and inflation targeting stems from the high inflation era during the 1970s; which itself came after a period of profligate public spending dominance of most nations' GDP. The inflation goals were set when inflation was very high – ie inflation targeting used to be a euphemism for getting inflation down.

Well, inflation (as measured by the CPI) is down, and has been for some time; and not just due to the efforts of our friendly neighbourhood central bankers either. Significant disinflationary forces have been at work well beyond monetary policy. Globalisation of trade and ever-lowering trade barriers has seen manufacturing shift and concentrate around the world to the lowest cost place

of activity. The technology revolution as well has seen productivity gains and ever-lowering costs across most activities in the economy.

We are now in the situation where global central banks are trying to stimulate inflation. The US Federal Reserve has recently changed its inflation stance from targeting 2% to targeting 2% on average. A nuance, but an important one – from the Fed’s perspective, ultra-low interest rates will stay in place until inflation moves above 2% and is expected to remain durably above 2%.

As well, central bankers are calling for the fiscal purse strings to be loosened.

Music to a politician’s ears one would think; being asked by the dry old (sorry Adrian) central bankers to get out and spend a bit. This is a natural evolution though of the “other” part of the central bankers’ mandate – the economic part (or employment part in our case). That side of central bankers’ mandates has meant that monetary policy has been the primary tool in play whenever the global economy has threatened a wobble.

While we had positive interest rates we could maintain fiscal prudence (although not everyone around the world did) and leave it to the central bank to cut rates to stimulate the economy whenever a recession threatened. In effect, instead of taking the pain and allowing economies to self-correct (as pure free market economics prescribes) policy makers have persistently kicked the can down the road to cushion the blow, by cutting rates repeatedly. To be clear, allowing free market economies unbridled rein is both very painful and cruel – for those readers who, like me, have more eyebrows than hair the Rogernomics era in NZ in the 1980s was very difficult economic medicine to swallow.

This can-kicking behaviour though, alongside a falling CPI, has left the world with very low interest rates just when we

needed to cut them again. Hence, the call for fiscal spending – with no cutting room left for interest rates and the private sector not propping the economy up, the world governments become the spenders of last resort (let’s hope we can avoid this becoming a habit).

So, inflation had three headwinds – a policy framework designed to contain fiscal spending and push the CPI down, trade globalisation and the technology revolution. With central bankers trying to stimulate inflation and world governments being encouraged to spend, the policy headwind has reversed.

Trade globalisation was already under pressure before Covid-19. The so-called trade wars between the USA and China were an expression of geopolitical nationalism. The Covid-19 shock will likely exacerbate the trend back towards nationalism or regionalism (economic shocks usually do) if nothing else because nations opening the fiscal purse will want to encourage their own economies directly. As economic activity shifts to a higher government spend, that spend will be locally targeted not globally. That headwind too has reversed.

This leaves the technology revolution as the prevailing headwind for inflation. I’m too old to be a techy and I’m not going to call the end of that phenomenon, and it should mean that inflation doesn’t get underway too quickly. The current economic downturn will also mean that inflation won’t show up in the CPI for some time.

But, with fiscal spending on the rise, globalisation on the wane, and central bankers wanting to achieve their mandates there is a reasonable chance that inflation rides again. Arguably, we are already seeing it – just not in the CPI. An outcome of high liquidity caused by ultra-low interest rates and quantitative easing is that asset prices are rising without any particular productivity or value-add to cause the higher price … it’s inflation Jim, but not as we know it. A WWW.GOODRETURNS.CO.NZ | 07

UP FRONT | NEWS

New Zealand investors motivated by ethics, report reveals As New Zealand prepares to release its sustainable finance roadmap, new research shows that more than threequarters (78%) of New Zealanders with KiwiSaver or other investments believe that ethical or responsible investments perform better in the long term.

The new study, conducted by Dynata for Mindful Money and the Responsible Investment Association Australasia (RIAA), highlights the significant consumer demand for responsible and ethical investment, as the industry continues to grow in its size and influence.

RIAA CEO Simon O’Connor told Good Returns that he was not surprised by the findings. “We have seen now for a number of years that [for the] vast majority of New Zealanders their investments and savings are aligned with their values.

What has fundamentally changed is that we now see that the vast majority of New Zealanders, almost 80%, also believe that responsible investment

performs better in the long term.”

“It is really encouraging to see that the myth that ethical and responsible investments underperform is rapidly being put to bed.”

The research is part of a wider sea change in New Zealand’s investing culture. “What we have here is an opportunity to align financial capability and wellbeing through the use of responsible investment,” O’Connor says referring to the two-thirds of New Zealanders who would be more motivated to save and invest more money if they knew their savings and investments made a positive difference in the world.

O’Connor says that this momentum shift also needs to be taken up by advisers. “This doesn’t mean that we need to go out and immediately divest from every industry that this survey says that Kiwis care strongly about. It’s really important that fund managers, KiwiSaver providers and financial advisers are being really clear with their clients with how they plan

to manage these risks and alleviate any harm that comes from their investments.”

“Tools such as Mindful Money and Responsible Returns make it much easier for advisers to be able to have a conversation with their clients, to engage their clients, and to provide solutions for their clients that match their values.”

O’Connor believes that the trend seen in this survey is only going to get stronger. “In New Zealand we have a vast majority of the financial service sector with responsible investment measures in place. We see about half of those with a leading approach. We think there is room to continue to strengthen that.”

“This has become more than just about avoiding harm. This is now about using financial services to influence change and support sustainable businesses. Positive impact is where New Zealand investors really start to get excited.”

Trust in advice report released by Financial Advice NZ A report released by Financial Advice New Zealand based on research undertaken by Core Data has revealed that nearly 95% of those who use a financial adviser feel positive about the advice they receive.

The report, which was released at the Financial Advice NZ annual general meeting in October, sought to understand the sentiment around the experience of those who use financial advisers, and whether they felt more confident around their financial health.

It was established that 55.3% of Kiwis who received financial advice felt extremely secure around their future, compared to 38.9% who hadn’t. And of advised New Zealanders 69.9% said

08 | ASSET NOVEMBER 2020

that they had enough money put away for the future, as opposed to 52.4% of those who weren’t advised.

It also revealed that financial advisers were seen as highly trusted professionals, with 93.7% of those surveyed rating their adviser as good or very good with regard to trustworthiness.

“We are excited that this report clearly shows that New Zealanders who get professional financial advice are much better prepared for the future than those who don’t. In addition to this financial advisers are seen as trusted professionals,” says chief executive officer Katrina Shanks.

High upfront commissions likely to stay Fidelity Life chairman Brian Blake says the government has missed an opportunity to force down commissions on life insurance policies.

Blake says: "The failure to address high upfront commissions in the Financial Markets (Conduct of Institutions) Amendment Bill was a missed opportunity in our view.

"In a highly competitive market like ours, without regulatory intervention it’s unlikely anyone will significantly reduce upfront commission levels and risk losing market share," he says in the company's annual report.

He says Fidelity Life is confident it has adopted conduct and culture changes which meet the requirements of the Financial Markets Authority/Reserve Bank of New Zealand conduct and culture review.

The company will shortly be introducing an online adviser product accreditation programme, an adviser quality assurance programme and it has also developed good customer outcomes principles to help

ensure Fidelity continues to meet the needs of its customers.

Further enhancements to its adviser proposition will be announced from early 2021, including some digital initiatives resulting from its Project Watson IT development.

The Reserve Bank "expects insurers to take steps to protect, if not build, their capital positions to ensure the industry remains in a strong position to support New Zealanders through Covid-19 and this time of economic uncertainty."

"The months ahead are really important – successfully completing Project Watson, the enabler of our transformation, in the first half of FY22 will give us a strong base to build from. It will allow us to use data and insights to develop compelling products, deliver great customer and adviser experiences, and reach new consumers through a strong New Zealand brand.

"Our transformation will deliver a number of long-term benefits, including strengthening our capital position." A

WWW.GOODRETURNS.CO.NZ | 09

UP FRONT | PEOPLE

Fidelity Life appoints new CEO Melissa Cantell has been appointed chief executive at Fidelity Life, replacing Nadine Tereora who left in May 2020 Cantell has strong executive leadership experience running commercial operations across a range of industries. She joins Fidelity from IAG NZ where she held the role of chief operating officer, and prior to that was the executive general manager transformation.

She has accumulated a broad range of experiences over her career, from mergers and acquisitions strategy and business transformations to senior general management roles with Fonterra and Coca-Cola Amatil. "She loves building great customer, adviser and people experiences, especially in times of change, and is passionate about the role insurance plays in the New Zealand community," Fidelity chief distribution officer and joint acting CEO Adrian Riminton said in an email to advisers.

Wealthpoint creates new head of investments role Wealthpoint has appointed Keri Jenkins to the newly created role of head of investments.

In her role, Jenkins will lead an investment analytics and administration team and will develop and grow Wealthpoint’s investment proposition supporting member businesses and their investment clients.

Wealthpoint members currently advise clients with investment holdings of more than $3.5 billion across a range of products and platforms.

Her focus is to ensure these clients have access to high performing contemporary products and services that are competitively priced.

She will also manage key relationships with fund managers and Wealthpoint’s external service providers including platform suppliers AMP Wealth and Consilium, newly appointed investment consultants Makao Investments, and investment research provider Morningstar.

Prior to joining Wealthpoint Jenkins was at Fonterra – she brings experience in capital markets, corporate finance, fund management, equity research, performance reporting and implementing strategic change. She held a range of roles with Fonterra, most recently as general manager strategic projects and earlier as general manager capital markets and investor relations.

Keep up with the news at

Jenkins has also had a successful career as an investment manager with Coronation, one of the top-rated fund management firms in South Africa.

Her role included broad capital markets work, funds management, equity markets research and analysis.

Wealthpoint chief executive Simon Manning says: “Keri is a high calibre investment professional and we’re delighted she has joined us.

Her appointment is significant for Wealthpoint as it demonstrates our intention to develop a market leading investment offering for Wealthpoint’s advisers and their clients. It is an important milestone in the delivery of our strategy to enhance member benefits, provide more choice and to lower member costs.”

Wealthpoint is a co-operative owned by a network of 55 financial services advisory businesses and over 150 advisers operating across personal and general insurance, investments and mortgages.

goodreturns.co.nz/people-events 10 | ASSET NOVEMBER 2020

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WWW.GOODRETURNS.CO.NZ | 11

FEATURES

Even the highly capable need financial advice Financial Advice NZ CEO Katrina Shanks says getting her own financial adviser has transformed her life.

Is that a story you're going to [share more publicly]?

Back in the studio we have Katrina Shanks, the chief executive of Financial Advice New Zealand.

Welcome back, Katrina.

Thank you for having me.

Last time you were here, you were quite new in the job, but now you've seen a lot of the financial advice sector. And I read somewhere that you've actually got your own financial adviser now. How's that process been?

I do have my own financial adviser who's totally transformed my life.

Yeah?

Yep, it's been a great experience.

And once again, I hadn't had financial advice before I took this role and I thought it was really important that I understood what that looked like.

So, why hadn't you done it beforehand?

I don't know. I think like most people, I think I'm pretty competent. I'm a chartered accountant by trade. I understand business and I understand my own finances and I know how to read a contract. So, I thought I didn't need it, but actually now that I've had advice, I realise just how invaluable it is and how it gives you a different [way] of looking at things.

It’s totally transformed my life.

12 | ASSET NOVEMBER 2020

A couple of weeks ago, it did go a little bit more public when we wrote about that journey. I wrote about it in an opinion piece in Stuff and had a lot of feedback from that I've got to say, but absolutely everywhere I go I talk about this journey of seeking financial advice and how it can change your life because I truly believe it does.

And that's what we're here for at Financial Advice New Zealand and that's what financial advisers do every single day. They help people to increase their financial health, wealth and wellbeing.

The other day you were saying to me, and good on you for [your honesty with this], that you've been surprised at how resilient the financial advice sector is because it's gone through so much change. Can you tell me a bit about what you've seen there?

Well, huge change, not just through the legislation. Obviously, we had FSLAA come through, which has set the environment which FAPs are going to operate in in the future. That's getting your mind around what does the licence look like? What do my liabilities look like? Not only my company, but also myself, because you've got duties under both. That's been quite a journey.

And then on the top of that, you've got the disclosure requirements, you've got full licensing coming in, and then also we've had environmental change with how the different dealer groups and aggregators have

looked to add value to the process as well, which they do. And then on top of that, we've had CoFI come in for conduct and culture for product providers and companies – and their reaction to what that looks like as well has changed the environment slightly. Just as you think that the environment has settled, there's another change that's come in.

Do you think financial advisers have faced far more change than other professions?

I think so. I was reflecting on this a few weeks ago and I can't think of any other sector which has gone through change so quickly over such a short period of time. And it's been significant change, but not just change from legislation, change from their commercial agreements and the environment they work in and the market as well. The only thing that's really constant is the good advice that they give every single day.

Interesting isn’t it?

Totally.

And turning to some work being done by your organisation, Financial Advice New Zealand, the Trusted Adviser. That was something which got talked about right at the formation of the association. Why has it taken so long to get there and how difficult has it been to put together?

When the three organisations came together they wanted to develop a quality mark and that's actually in our constitution that it was to be developed. And so, that was one of the briefs I had when I first came in. That's been two years in the making because the environment

has been changing so much – and it's really understanding where the legislation and the regulation was going to sit. What does that base level of compliance look like? Then understanding the different values which were coming out through the dealer groups and aggregators and the conduct and culture coming through as well, where that was all going to land? That's taken a while to land in a certain place. So, now that we understand what the environment is looking like, it was much easier to create a quality mark which means something.

It means something not just to advisers, but also to consumers.

One of the questions which I wonder about, so if you're going to advise one of your members out there and they're using this quality mark and something goes wrong, how are you going to manage that?

We'll have a process in place, which will say there are certain things that we expect of you as a member, there are certain things that you have to have in place to have the Trusted Adviser mark. There are five criteria that we've gotten there and that's: experience, qualification, ethics, PI and there's one more, which is ...

Twenty hours of CPD. Yeah. There are those components, which are the criteria to get it. But once again, it is all about conduct and culture and it's all about being professional. And our membership have already got rules around that.

Will there be some sort of disciplinary process in there if something goes wrong?

We do have that anyway and as a member you have to act with integrity and we have all the criteria in our membership as it is.

This is just a mark that stands a little bit beyond the membership to say: “I am committed to my profession and I'm going to do these things to show that commitment for this mark.”

What percentage of your members do you think will go for a Trusted Adviser status?

Well, we think quite a few. There'll be some that will already be eligible for it.

People with the ...

CFP, CLUs, for example who ...

Will they get it automatically?

We're considering that. That's part of the consultation process.

Obviously, there'll be some that already meet that mark. AFAs mainly will meet that mark as well, maybe apart from the ethics component. There'll be some which will already meet that mark. And so, this consultation period is about teasing that out. And should we allow people in straightaway or should we let the process just go slowly and you apply for it?

And the consultation, has it been all quite similar or are you getting lots of variations in there?

Yeah, we've had fantastic feedback actually. And it was a really genuine consultation as well. We really wanted to hear what the membership think about this and also the other stakeholders out there, what they think about the mark and where it's landed. And it's been overwhelmingly supportive of it. There has been feedback around should somebody be grandparented in, should we be looking at longer – five instead of three years of experience? Should it be qualification based? Should it be a higher qualification? We've had lots of different feedback, but overall, really supportive of where we've landed with the Trusted Adviser.

So, you think most of them will go into this?

I think there'll be a majority of members that'll look to meet the criteria, but it's a journey. And for those which don't quite meet the criteria who, for example, haven't got three years of experience, who haven't quite got their qualification yet, we think it's really obtainable for financial advisers to get this mark.

Do you think it'll be different between the insurance, the mortgages and the investment space ... or similar?

Well, with the new legislation, we're all similar and we're all the same and we all give regulated financial advice. We're all on the same journey together and I think what the government has done with the

legislation is they're saying, we expect anybody that gives financial advice to be a professional. And also in the licensing conditions, they're showing levels of professionalism for the businesses as well. What does a professional business look like? That's certainly where the government is going and I think it's certainly what the consumer expectation is that when they deal with a financial adviser, they get a professional service and absolutely most advisers already do that.

Yeah. And how are you going with membership numbers?

They're pretty static. We're in renewals at the moment and looking really positive. We're really pleased.

Yeah. Good. And lastly, we've just touched on CoFI, the conduct legislation. You're supportive of it, but you've got a few areas [where] you'd like to see some changes.

What are they?

Yeah, absolutely. We're all for good conduct. Of course we are. As everybody else is in the sector.

Really it's about understanding the powers which have been given through regulation for licensing on remuneration. We think those powers are too wide and too far reaching. I can't think of any other industry where your remuneration is set in licensing conditions. We think that reach has been most probably a little bit too far. We've got concerns [that] FAPs have been excluded from this legislation, but individual advisers haven't. But we think that's just a drafting error.

We'd like to see that being fixed in the drafting. And explicitly excluding financial advisers from that legislation, I think is really important as well. A

To watch the full interview, download an audio podcast or to read the full transcript, visit: goodreturns.co.nz/grtv

WWW.GOODRETURNS.CO.NZ | 13

FEATURES

Remembering Fred Dodds The financial planning community has lost a true legend.

Philip Macalister pays tribute.

F

red Dodds passed away on Monday, November 9.

Not many people knew Fred was battling cancer. But that is what Fred was like.

One of the many loveable things about Fred was his humour. Decades ago he was involved in industry debates and I still remember them because of Fred. More recently when he accepted his Financial Advice New Zealand Outstanding Contribution to the Industry award he gave a wonderful, off the cuff, hilarious speech.

As a Dad, I loved to see how he publicly showed true affection for his daughter, Toni. I know he was very proud that Toni worked in the same industry as him and, like Fred, she is determined to help lift professional standards.

14 | ASSET NOVEMBER 2020

Fred was passionate about financial planning and understood the many issues. Often he would hit me up with some questions seeking my thoughts.

One of the more recent was returning on a bus from some conference dinner in Christchurch. He asked me about the IFA and PAA getting together. Little did I know at the time things were progressing on what was to be Financial Advice New Zealand.

It was a good discussion we had.

Looking back Fred had the bit between his teeth on this one and he, along with others, succeeded.

Fred joined the industry in 1977 working for the likes of Prudential and Tower.

As an adviser manager Fred recruited, trained and supervised many successful

advisers over the years – he was highly respected within the profession.

Besides his roles within companies, Fred made massive contributions to the various adviser organisations over the years; including the Life Underwriters Association, International Association for Financial Planning, Insurance and Investment Advisers Association, Financial Planning Association and Institute of Financial Advisers. His commitment to these organisations demonstrates his passion to give back to the industry.

This was also summed up in his nominations for the outstanding contribution to the industry award: "It is his passion that sets him apart from the crowd."

"His passion for the profession,

his ability to encourage others to achieve and become part of the story is outstanding, whether it be personal phone calls to discuss what is going on, to addressing meetings to obtain advisers' thoughts and issues. It is this inclusiveness that sets him apart."

"His passion shone through as the realisation that a new combined body was required for institutes and associations."

"He cajoled, annoyed and helped corral the three associations form what has become Financial Advice New Zealand."

In his leadership role, as the chief executive of the Institute of Financial Advisers, he was instrumental in forming the sector engagement group, presenting a united voice of stakeholders to regulators and officials.

Fred took on this role at a time when the industry was in a state of turmoil given the GFC and subsequent regulation creating uncertainty for advisers. This translated into membership declines across all associations and institutes as members questioned the effectiveness and validity of their associations.

Fred Dodds, in his own words

staying an adviser would have been a good choice. I say that because the role of an adviser today is so wide ranging and whilst not there yet we will be recognised as a profession one day – advisers do a great job over all the life cycles in a person's life You’ve got a pretty good reputation for getting up in front of groups and being an MC. Where do you get all your gags from?

Not sure really – I suppose my makeup has a good lacing of humour built in.

I am a good listener though and you would be surprised how many gags and one-liners just get produced out of matching conversation with individuals, companies and life situations. I also have been a bit of a conference junkie and have therefore heard some great gags from a lot of presenters.

If there is one thing you would like to change about the financial advice industry, what would it be?

To have the career and the job advisers do in financial services recognised by advisers, product producers, the public and other professions as a “profession”.

Now that requires a raising of standards and attitudes by a lot of players – I might hang around for a while to see if I can help that happen!!

What’s the best advice you have ever received?

I can remember attending a LIMRA (Life Insurance Market Research Association) course to turn me into an amazing agency manager. One of the lecturers said two things that have stuck in my mind:

Who are you and what do you do?

I am Fred Dodds and I am the chief executive of the IFA – a position I have had now for some 15 months. It is challenging but there are some real neat people in this game. I am lucky to have been involved in most of the disciplines and have built some real good friendships with a lot of them.

How did you get into the advisory industry?

In 1977 I was a marketing manager for a farm equipment company in Gore!!

Part of living in rural Southland was joining a service club – for me that was the Round Table. It had as member a National Mutual agent, MDRT-qualifier who said I should become a life agent.

He was persistent and so I decided I would give it a go but would do so in my home town of Dunedin.

My insurance agent was Ian Clark who was a Government Life agent and he got me into the Dunedin office where I was “recruited”. Then spent three days listening to Earl Nightingale tapes and learning how to drive a rather small rate boom and then put out on the street!! Well it was not quite that basic.

In those days along with the other mutuals you were sent away for a 10-day induction course before you were let loose on the public – not quite sure we do that today – FSPR, Disputes Resolution Scheme – primary disclosure statement and away you go For most of your career you’ve worked on the corporate side of the industry.

Have you every wished that you’d rather have been an adviser?

Well I was an adviser for four years 1977 to 1981 when I was encouraged to become an agency manager and the rest is history really. I thoroughly enjoyed the agency years – helping advisers get established and successful – many are still good friends today.

Looking back now though – yes

• attitude counts far, far more than talent and • being negative doesn’t help others.

I have pretty much got them into my DNA I think.

Outside of work what do you do?

I live in Waikanae – Kapiti Coast – neat place. I am on the executive committee at the Chartered Club and that keeps me pretty busy with meetings.

Fred’s willingness to step up and engage with members and act as their advocate with authorities was beneficial in retaining members, he was constantly available to members and local committees to assist wherever needed, purely for the good of the profession.

It is this passion that set Fred apart, so much so that he performed his chief executive role at a significantly reduced salary.

A number of years ago we interviewed Fred about his time in the industry:

I am also, along with Mavienne, a keen gardener and we have had a property in a promotional Garden Walk – like 2,000 people trampling over my groomed grass and asking dopey questions – no jokes there!!

And the odd game of golf – left hander – I have the best controlled banana slice on the coast.

And with a son living in the UAE we get up there quite frequently – Mavienne and I love it up there. There is a financial planning fraternity up there – growing. I could go up and establish a business – I would only need one Sheikh!!

What’s one thing people may be surprised to know about you?

I was, in another life, a pretty keen snooker and billiards player – like NZ champs, etc. I have been playing again in recent years in local competitions with some success. Not quite Pot Black territory but I do have a handful of 100 plus snooker breaks to my credit.

If you weren’t in this job what would you be doing?

Two things spring to mind.

Trainer – motivational speaker, or – a career in trade and industry promoting this wonderful country we are lucky to live in.

You're off to your son's wedding in Kenya. What's been easier to organise: a wedding in Africa or a joint conference in Auckland?

Now there’s a question. You can pretty much get advisers and product suppliers on side around a conference – they clearly see the end game.

A Kenyan wedding is fraught with tradition, culture and an attitude of – “it’s your marriage but our wedding”.

Things like “what do you mean a guest list?” – “we always invite the whole village!!”

So – off Mavienne and I go next week to Lake Naivasha – about 120kms outside Nairobi where we will join daughter Toni for the marriage of our son Bevan to Abby Momanyi – it will be a great occasion.

Oops – I have to give a speech – better head off and find some gags! A

WWW.GOODRETURNS.CO.NZ | 15

LEAD

16 | ASSET NOVEMBER 2020

Time to get cyber secure

‘‘

Cyber security presents a real threat to all businesses.

Don’t be fooled into thinking it’s only the big fish that are targeted, writes Daniel Smith.

This is an existential event.

There are very few events out there that can kill your business. This is one of them.”

John Bolton, founder and director of Squirrel, has a fear that keeps him awake at night. This fear is a data security breach, a situation which Bolton believes would mean nothing less than the total annihilation of his business.

But he’s also aware that it’s not a concern that all advisers are addressing.

And this, for him, is highly problematic.

“Look, I come from a corporate environment, where we are always asking, ‘What are the big risks in your business?’. And then you get into adviser-land and might think that the main risk is that you stuff up some investment or insurance advice. But the biggest risk in the industry is a company assuming they are too small to be attacked.”

Issues of privacy and data security are under a spotlight due to the new Privacy Act coming into force on December 1.

Under the existing Privacy Act, the onus of responsibility is on the individual. If there was a breach, the person affected would have to contact the Privacy Commissioner.

The new act will shift the responsibility from the individual to the businesses

that hold their data. Every business that collects and stores client data will be subject to the new act, and those not adhering may be breaching privacy laws, and be subject to a fine.

But while the new act will allow the Privacy Commissioner to bare some teeth to those companies who fail to comply with the new regulations, Bolton believes that the “existential threat” of a data breach is not being taken seriously enough.

He says that the high-profile cyberattacks that brought down the NZX in August have only strengthened the false belief that cyber-criminals only go for big prey.

This is patently untrue, says Bolton.

“You have to remember that when you are plugged into the world wide web, the whole world can access you. Yes, there are plenty of other fish in the sea, but it could just so happen that one day the shark wants to eat you.”

He takes the metaphor further.

“Imagine you are that little fish who one day gets bitten by the shark. The next day your client’s data is for sale on the dark web. At that point your entire business went up in smoke in less than 24 hours and you didn’t think you did anything wrong. But what you did do

‘There are very few events out there that can kill your business. This is one of them’ _ John Bolton

wrong is you didn’t look after security.”

Marc Barlow, consulting partner at specialist cyber security company, InPhySec, is one of those trying to stop this threat in its tracks. Barlow (and other senior staff at InPhySec) started the company after years working at the GCSB, predominately in the National Cyber Security Centre.

Barlow says that financial services have a particular reason to prepare to be targeted. “The criminal’s motivation is financial gain, to achieve that they are going to go where they can get the biggest bang for their buck. The financial sector is the obvious choice.”

But targets within the industry are not distributed equally across different sized companies. “Bigger companies WWW.GOODRETURNS.CO.NZ | 17

LEAD

‘This is a genuine threat. If it comes to pass the impact on an organisation is incredibly hard hitting’ _Marc Barlow

are able to put a lot of emphasis on cyber-security. But when you get down to smaller companies between 10-100 people, they don’t have a whole lot of money to invest in security. Cybercriminals realise that compromising a smaller, trusted adviser can be a path to direct criminal gain or a springboard toward a larger target.”

When the call comes from a company facing a cyberattack there are a couple of components to InPhySec’s response.

Barlow explains that, “firstly we look at how to prevent further data loss, or help 18 | ASSET NOVEMBER 2020

them to restore some sort of business functionality. Secondly we investigate what data may have been lost, and figure out what enabled the breach. And lastly to look at what can be done to prevent a recurrence.”

This process is relatively simple with a larger company who already has cyber defences in place, but when a smaller company without protection finds themselves the victim of a cyberattack it can have devastating consequences.

Barlow said that, “we recently worked on an instant response job where a professional services company had their Office 365 compromised. What happened was, another organisation had been previously compromised and an email was sent from that organisation to the organisation we dealt with. They then opened the email and said, ‘Ah, we know this person so we will follow that link’.

They were phished and lost all the data that had been hosted on Office 365.

“When they advised their customers of what had happened there was a massive loss of confidence. This was a successful New Zealand company who were facing serious questions about their ongoing viability.”

Another person who sees the aftermath of data security breaches is Petra Lucioli, claims manager at Delta Insurance. Lucioli says that her perspective from a claims side gives her the opportunity to collect interesting data on what sort of claims are most impacting financial services.

The data speaks volumes. Lucioli says that “literally 50% of my claims are invoice frauds that have been caused by email breaches”.

“Somebody gets a phishing email with a dodgy link, the link leads them to a website where the fraudster is able to get access to their email credentials.

The fraudster then gets access to the email account, sits in it for a few weeks, watches what is going on and then they start manipulating the emails, eventually committing an invoice fraud.”

Though email breaches are by and large the number one cyberattack, a close second is ransomware which is responsible for over 25% of claims.

Lucioli points out that ransomware has grown far more sophisticated over the years. Whereas it used to hold files hostage until ransom was paid, Lucioli is now seeing ransomware “not just

‘Literally 50% of my claims are invoice frauds that have been caused by email breaches’ _ Petra Lucioli

encrypting the files, but also slowing down servers or altering the way in which digital services function”.

But development in cyber-crime technology also comes with the development of intel reconnaissance on behalf of the criminals. Lucioli says that “equally important is that the fraudsters are carrying out investigations into their victims, finding out their weaknesses and creating ransomware that focuses on that. Even the amount of money that they are claiming as ransom is specifically targeted at the organisation.”

The fact that the actions of cybercriminals are growing more complex by the day is starting to hit home in the wider New Zealand community.

A study by CERT NZ, the government agency which supports organisations and individuals affected by cyber security incidents, has released a report that shows how the volume and sophistication of financially-motivated cyberattacks has increased over the last six months.

“CERT NZ’s incident data tells us that cyberattacks have become more sophisticated, persistent and harder to detect than ever before.” says director Rob Pope.

“Your personal information is highly valuable to attackers regardless of who you are, so it’s important that more Kiwis get serious about protecting themselves online.”

The study found that almost a third (32%) of Kiwis don’t frequently check the privacy settings on their accounts.

This information is crucial for advisers. If a third of your clients may be compromised, then that client could unknowingly provide a conduit, through a phishing email or a malicious ransomware for a cyber-criminal to attack your business.

While the criminal enterprises are growing in complexity so does the security that defends your data. But the best methods of data protection may not be the most high-tech.

Lucioli says that, “The first and most important point is multi-factor authentication. Of the invoice fraud claims that I have seen, multi-factor authentication would have stopped all of them. Every single one.”

“Dealing with ransomware is a little bit harder because the access is created by your employees clicking on a dodgy link. The best thing you can do for that is training.”

This focus on multi-factor and training is echoed by both Bolton and Barlow.

Bolton also believes that businesses need to have measures against human error. “One of the key examples of human error is just dumb passwords. One of the things that we recommend is for businesses to use a password manager to give really complex passwords. I think everybody should be using them.”

Barlow believes that a key point for companies looking to protect themselves is to remember that “you don’t have

to do it all yourself. The growing sophistication of cyberattacks means that you need really good advice. Every business, particularly in financial services needs a good cyber partner.”

He says that the upcoming changes to the Privacy Act, while a step in the right direction are not enough by themselves to encourage the industry to make the needed changes. “The ability for the privacy commissioner to fine companies for breaches is still really limited. Yes, there are changes coming that put more emphasis on data protection and that’s a good thing, but the regulator doesn’t have big nasty teeth.”

A $10,000 fine from the regulator is not much compared to the financial fall out of a cyberattack. Lucioli says that of the claims she has seen the typical fraud amount is between $50,000 and $100,000, but that fraud can be paid out two to three times before the company realises what has happened.

Though this impact may be huge especially in the SME space, it is nothing compared to what can happen when an organisation needs to send an email informing their clients that their personal data is for sale on the dark web.

With the upcoming Privacy Act highlighting data security, Barlow wants the messaging to be clear. “This is a genuine threat. If it comes to pass the impact on an organisation is incredibly hard hitting. Reputation is everything in this sector. If your reputation around protecting data gets compromised, then that could see the loss of your business.

“It is really easy to peddle fear in the security area, but people do need to understand that if it goes wrong it can go wrong big time.”

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‘Your personal information is highly valuable to attackers regardless of who you are, so it’s important that more Kiwis get serious about protecting themselves online’ _ Rob Pope

New privacy law changes explained A new Privacy Act will come into effect on December 1, 2020.

The key changes include: • Requirements to report privacy breaches: If an agency has a privacy breach that causes serious harm or is likely to do so, it must notify the people affected and the Commissioner.

• Compliance notices: The Commissioner will be able to issue compliance notices to require an agency to do something, or stop doing something.

• Decisions on access requests: The Commissioner will make binding decisions on complaints about access to information, rather than the Human Rights Review Tribunal.

The Commissioner’s decisions can be appealed to the Tribunal.

• Strengthening cross-border protections: New Zealand agencies will have to take reasonable steps to ensure that personal information sent overseas is protected by comparable privacy standards. The Act also

20 | ASSET NOVEMBER 2020

clarifies that when a New Zealand agency engages an overseas service provider, it will have to comply with New Zealand privacy laws.

• Class actions: The Act permits class actions in the Human Rights Review Tribunal by persons other than the Director of Human Rights Proceedings.

• New criminal offences: It will be an offence to mislead an agency in a way that affects someone else’s information, and to destroy documents containing personal information if a request has been made for it. The penalty will be a fine of up to $10,000.

• Strengthening the Privacy Commissioner’s information gathering power: The Commissioner will be able to shorten the timeframe in which an agency must comply with investigations and the penalty for non-compliance will be increased from $2,000 to 10,000. A

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FEATURES | PROFILE

An investment junkie at 13 Daniel Smith meets our regular Investment Commentary contributor David van Shaardenburg.

What's his take on current market-impacting events?

T

eenagers aren’t usually known for their passion for financial markets: but David van Schaardenburg was an exception. At 13 years of age, he found himself drawn into the world of finance, inspired by “the excitement of markets”.

“I’ve always been a numbers’ orientated kind of person,” he explains.

“So I think investment naturally appealed to me.”

But it was the factors of markets outside of numbers that really got van Schaardenburg’s blood pumping.

“You look at the marketplace. It’s not predictable, you’ve got to use your wits. I just found all of that incredibly intellectually interesting.”

With such an early interest in markets, 22 | ASSET NOVEMBER 2020

BY DANIEL SMITH

it would seem that a career in investment management was a given.

Van Schaardenburg laughs at the suggestion.

“I don’t think I was quite as good at having any kind of long-term plan.

I finished my accounting degree and worked out within three weeks that accounting was not sufficiently interesting enough for me. Which is funny because I work at an accounting firm now, doing investment management.”

That company is Findex Wealth Management in which van Schaardenburg is a senior partner.

Findex is one of Australasia’s leading providers of integrated financial advisory and accounting services.

The company’s vision, summed up by van Schaardenburg, is that, “a lot of people know how to earn money, but they struggle with how to turn that into wealth. Findex bridges that gap.”

The journey that van Schaardenburg took to reach this position saw him take up varying positions in multiple countries, but each role had a focus on the excitement of markets that had first drawn him into the financial world at 13.

A role that set the scene for van Schaardenburg was his time at FundSource Research (formerly IPAC).

The role saw him providing fund research to investment clients and advisers.

“What attracted me to that group at the time was there were several really smart guys at the company.

‘You look at the marketplace. It’s not predictable, you’ve got to use your wits.

I just found all of that incredibly intellectually interesting’

‘Adviser fees, fund fees, KiwiSaver fees, brokerage fees, they are all high by international standards but we don’t have a premium return that justifies that’ I am a big believer that if you invest in the early stages of your career in knowledge building then you hope that it’s going to have a payback down the road.”

This focus on knowledge and deep research came to pay dividends for van Schaardenburg in the late 1980s. “When I was 25 I was managing $250 million in Australasian equity portfolios and I realised that the New Zealand market was a bubble. You could trade well within it, but there had to be a point in which you got off the wave. I sold the whole portfolio in June 1987, quit my job, bought a house and put the rest of the money in the bank. So when the 1987 stock market crashed, I was making money when a lot of people were losing their shirts.”

This experience of navigating extreme volatility in the global market has meant that van Schaardenburg has felt pretty at ease in the world of Covid. “This is not an economic meltdown, this is a health crisis. Of course we are seeing economic disruption and it’s falling unevenly. But the core of our financial systems are not under threat. Covid has its own

challenges, but the banking crises and the GFC were much more difficult.”

Coming through the 1987 market crash and the GFC relatively unscathed is no mean feat, and van Schaardenburg has some core lessons to impart for others in times of crisis. “Number one is Don’t Panic. When markets lose their cool, I smell opportunity. Back in March where it looked like things were going to get worse we reweighted client portfolios into shares. I was calling clients who were asking us to move their wealth into cash or conservative funds and asking them, ‘do you have more cash to put in?’. There are very few opportunities for investors to get a clear gain from the markets, this was one of them.”

The volatility of the markets is a period in which investors need to take a look at themselves and see what kind of investors they are, says van Schaardenburg. “In 2020 there are two types of investors I am interested in, the fearless and the desperate. The fearless is this new wave of optimistic, somewhat naive investors who are going fearlessly into anything that moves upwards. The desperate are the people who have money and are looking for a reasonable return for their risk and they are struggling to find that. They are getting FOMO and possibly getting into situations they [maybe] shouldn’t go into.”

As van Schaardenburg sees it, both the fearless and the desperate investors are making matters worse for themselves by not utilising advisers. “Obviously there’s a great DIY culture here in New Zealand, which is great. But I know that if I am going to do a task that has significant downsides if I get it wrong, like plumbing my home toilet, I’m going to call up the expert. Because you know, maybe I could do this myself, but if I get it wrong I am up shit creek.

“But this country’s DIY culture is keeping a lot of people from talking to an

adviser, and what’s worse is that people who are seeing advisers aren’t getting a good enough return out of that. The cost of investing in New Zealand is still far too high. Adviser fees, fund fees, KiwiSaver fees, brokerage fees, they are all high by international standards but we don’t have a premium return that justifies that.”

Van Schaardenburg feels that the upcoming regulation changes will have a positive impact, but he also has “an intolerance for anything but the very best”.

“This is an opportunity to bring the New Zealand investor up to the standard of the global competition. It is absolutely crucial that the regulators get these changes right.”

At this point van Schaardenburg feels that more needs to be done, especially in the realm of financial education.

“In my opinion the AFA qualification is equivalent to year one of university business school. That is not high enough.

Should you be a financial adviser at this level? Should New Zealand investors be accepting this? These are all topics that the regulation changes aren’t going to address, but they are things that New Zealand investors need to be thinking about.”

When not wrapped up in the world of financial markets, van Schaardenburg enjoys spending his time collecting the biographies of New Zealanders who fought in World War II. “I scout around second-hand bookstores throughout the countryside trying to find these dog-worn books.

What I admire about these people is their community spirit. It might seem an odd way to put it but they were prepared to give up their lives to protect their community. Back when I was younger you would interact with the old guys who had done this, and they just had the best spirit. I just have a deep admiration for them.” A WWW.GOODRETURNS.CO.NZ | 23

FEATURES | EMBRACING A NEW NORMAL

24 | ASSET NOVEMBER 2020

Positive or negative – the choice is yours It’s been a difficult year for advisers but Naomi Ballantyne sees many positives to embrace in the changes Covid-19 has forced on the industry.

BY NAOMI BALLANTYNE

W

hen Covid-19 first invaded our lives and completely disrupted what was “normal” for all of us, I made the observation about how divergent the responses from different advisers were.

Some went into hibernation mode, not believing they could engage with their existing customers nor potential customers because their normal way of doing things had been disrupted – these advisers effectively stopped servicing their customers and earning new business income altogether.

Others got stuck into helping their newly vulnerable existing customers by upping their service game, but at the same time stopped any new business activity losing the associated commission income.

Then there were those who seemed to absorb the increased servicing requirements that Covid-19 brought, while continuing their new business activities. Certainly, these advisers have experienced the least income disruption throughout these past difficult months.

Now that New Zealand has emerged to a place that seems relatively calm in comparison to our previous eight months, and to the rest of the world, it would be easy for us to assume that all advisers have returned to a degree of business as usual – albeit subdued somewhat by the economic environment we remain in. However, I know from personal conversations with a number of previously very successful advisers, that this recovery is simply not true for everyone, and I have been pondering why.

How are some advisers surfing the wave while others are struggling to keep their heads above water?

Is it just a case of optimists vs pessimists, ie is it the way individuals instinctively interpret the world around them that drives this outcome?

For example, to me I see the current New Zealand life insurance industry in the following light.

1

Most New Zealanders still have jobs and therefore incomes to protect.

2

All New Zealanders now have an acute appreciation that bad health events can happen in the blink of an eye and that significant financial risk is associated with the health event.

3

Interest rates are the lowest they have been in recent memory meaning lower servicing costs and therefore more disposable income.

4

Overseas leisure and business travel have stopped, meaning costs of that travel have been saved.

5

The New Zealand economy is doing significantly better than forecasted.

6

The regulatory requirements for advisers are not particularly onerous or expensive but will enhance the consumer’s view of the professionalism of advisers.

7

Commission changes such as Partners Life’s financial advice providers’ over-ride, mean advisers have more control over their destiny than ever before – they get to decide how to spend the over-ride for the benefit of their individual businesses.

8

Advisers have engaged significantly more with their existing customers as a result of Covid-19 than ever before; meaning their relationship with their existing customers has become stronger and they can easily evidence to regulators the value of the service they provide. meaning.

9

Meaning, now would seem to be a prettygood time to be an adviser in New Zealand.

‘I really encourage you to stop trying to go backwards and instead have a look at the way forward’ Yes, the past months have been hard for everyone, optimist or not, but for an entrepreneur such as myself, I believe that true opportunities to leap-frog your business growth often arise during periods of significant market disruption.

But the key to embracing this opportunity is letting go of what “normal” used to look like – not stressing about what has been lost – and instead embracing all of the opportunities that today’s normal brings.

And sometimes, a crisis like Covid-19 is the catalyst to really force that change of thinking – especially for those that were never quite brave enough to move out of the status quo before.

So, to all of those advisers that are struggling because they haven’t found their way back to “how it was before”, I really encourage you to stop trying to go backwards and instead have a look at the way forward. There are plenty of examples of advisers who have done exactly that and are thriving today, despite (or even because of) Covid-19.

And if they can, then so can you – its all in the way you choose to see things. A Naomi Ballantyne is the managing director at Partners Life.

WWW.GOODRETURNS.CO.NZ | 25

FEATURES | REGULATION

Disclosure unpackaged As we head towards a change in disclosure requirements early next year, compliance and training specialist Leigh Hodgetts discusses the implications for advisers.

BY LEIGH HODGETTS

T

he new disclosure requirements come into effect on March 15, 2021 and many industry participants are only now reviewing their obligations and thinking about how to make some fairly significant changes to their advice processes. Attendees at Financial Advice New Zealand’s “Bounce” Roadshow Masterclass had the opportunity to run through the new regulations (facilitated by yours truly) in a practical format with working examples of how they could adapt to the changes in their business.

It was clear from the group discussions, that advisers who are currently RFAs, had the most to do in preparation for the new disclosure requirements. The reliance on a prescribed template will no longer be an option and building in disclosure at relevant stages, while giving financial advice to retail clients, is the key.

AFAs, on the other hand, could potentially update or adapt their current disclosure documents to include the new required information in their advice process. All financial advice providers' (FAP) websites will need to be updated to incorporate the publicly available information disclosure requirements.

26 | ASSET NOVEMBER 2020

An overview The Financial Markets Conduct (Regulated Financial Advice Disclosure) Amendment Regulations 2020 will commence on March 15, 2021 when the new financial regime comes into force.

The requirements apply to financial advice given to retail clients.

A financial advice provider, a financial adviser or a nominated representative must provide disclosure to clients at suitable times during the financial advice service.

Disclosure can be given verbally, in writing or electronically (email/text message).

There are no set formats for the new disclosure requirement regulations (229C to 229G) as long as the following is applied.

If disclosure is not given in writing (verbally) a client must be told that it can be provided in writing on request.

Stages of disclosure • Publicly available information • Disclosure when the nature and scope of advice is known • Disclosure when advice is given • When a complaint is made

What information needs to be disclosed • FAP licence information • Fees and commission

• It is presented in a clear, concise and effective manner.

• Conflicts or incentives

• If it is presented with other information, it is given prominence (websites for example).

• Nature and scope of services

• If it is presented in writing, it is in a format, font and type size that is easily read.

• Availability of information

• It is made available or given free of charge.

• Reliability history • Complaint process • Identifying information • Duties information

‘If disclosure is not given in writing (verbally) a client must be told that it can be provided in writing on request’

When a complaint is made (regulation 229F) What is a complaint?

The purpose of the regulation is to help consumers find a financial advice provider that meets their needs. A website or internet page maintained by a FAP would be the most common place that publicly available information would be found by consumers.

The information must be prominently displayed either on the homepage or somewhere easily found on the site.

It could also be via a link from the homepage. You need to ensure that the public can easily access this information at all reasonable times.

A complaint is an expression of dissatisfaction relating to the FAP’s financial advice service to which a response or resolution is explicitly or implicitly expected (including any dissatisfaction with advice given on the FAP’s behalf).

The FAP must give the complainant an overview of the FAP’s internal complaints process and information about the FAP’s dispute resolution scheme. You could also refer the client directly to your website as this information is available there at all times.

The complainant has access to a free independent dispute resolution service, and this service may help to investigate or resolve the complaint if it is not resolved to the complainant’s satisfaction using the financial services providers’ internal complaints process.

Remember that having a complaints process is a standard condition for licensing FAPs. Clear policies, procedures and a complaint register is important to have and keep up to date. Include how you escalate complaints and communicate with the complainant during the process.

Nature and scope of advice is known (regulation 229D)

Issues raised at Masterclass in group discusssions

The purpose of this disclosure is to help consumers make an informed decision on whether to seek, obtain or act on advice from a person or provider.

This disclosure is given by the financial adviser who is giving the advice to the client on behalf of the FAP. To be given at the time when the nature and scope is known or as soon as practicable after afterwards.

The lack of templates was a concern for some advisers who just wanted to be told what to do. After explaining that this is a principles-based regime, and you need to cover off the required information in a way that you choose to by following the guidelines, we all agreed that this could be a great opportunity to market yourself.

Making the disclosure relevant and meaningful to both the client and the adviser is important. Get creative and use this as a sales tool or marketing document. Increase the information on your website to cover the requirements in an appealing way that attracts clients with a good design.

During the groups breakouts we really pulled apart conflicts of interest, what they were, and how they would be managed by the FAP. Commissions were a talking point and how to manage the differing amounts paid by product providers. Using a reliable comparison tool for your analysis, following the sixstep advice process and your business process every time seemed to be the obvious way to mitigate this risk. This should ensure good client outcomes.

Remember Code Standard 2 – Act with integrity at all times.

Publicly available information (regulation 229C)

When advice is given (regulation 229E) The purpose of this disclosure is to help a client make an informed decision about whether to follow the advice that they have been given.

This disclosure is given by the financial adviser who is giving the advice to the client on behalf of the FAP. This disclosure must be given before or at the time the advice is given, or if it is not practicable to do so, soon after advice has been given.

There is some flexibility to combine the disclosure for 229D (nature and scope is known) and 229E (when advice is given) for a client in certain circumstances.

Providing consumers with relevant information at the right time is the key.

Disclosing the amount of commission in dollars or percentages and how to justify this to clients was something a few advisers struggled with. Understanding their own value proposition can really help advisers with these types of conversations. This is something many financial advisers need to work on now and gain confidence with.

Financial advice providers will need to build processes around how to provide disclosure to existing clients, new clients and meet the standard licensing conditions for record keeping. Does your CRM or platform allow you to evidence this easily? Something to consider with advice processes and record-keeping policies.

A reminder to review agreements with FAPs, FAs and nominated representatives and explore what changes will be built into agreements under the new regulations. Agreements with product providers are all under review with some extra items to be agreed to so be very aware of these.

In regards to complaints – think about if a complaint might trigger notification under your agreements – along with following the new disclosure requirements with the client. The devil’s in the detail with some new agreements.

‘Making the disclosure relevant and meaningful to both the client and the adviser is important’ Wrap up Now is the time to review websites and marketing material in preparation for disclosure required for publicly available information.

It may be challenging to operate under the FAA Act for another few months and then switch to the FMC Act, meet your legislative duties, obligations with the new Code, and new disclosure requirements. Time is running away on us and we all need to have appropriate policies, processes and be ready to go on March 15, 2021!

(Financial Advice New Zealand will be supporting members with another Masterclass in Auckland in November and a guide to the new disclosure requirements will be available in the member resource area on the website.) A WWW.GOODRETURNS.CO.NZ | 27

FEATURES | SPONSORED CONTENT

Keeping portfolios afloat when interest rates are sinking With downwards pressure on interest rates even stronger than it has been for the past couple of years, Investment Specialist, Shannon Murphy, sat with Head of Fixed Income, Mark Brown, to discuss how he approaches the challenge.

BY SHANNON MURPHY AND MARK BROWN

Murphy: The industry has been keeping an eye on low interest rates for a while now, but increasingly mum and dad investors are becoming aware of the downwards pressure on interest rates.

What’s your take on the interest rate outlook at the moment?

Brown: New Zealand’s rates were at all-time lows in 2019. The Reserve Bank (RBNZ) had been trying to get inflation to lift higher after being persistently below target. Then Covid-19 hit, and suddenly the weakening economy and rising unemployment meant the RBNZ has had to act aggressively. It has various 28 | ASSET NOVEMBER 2020

tools to push interest rates downwards; cutting the OCR into negatives has had a fair amount of media coverage recently.

There has been a little less coverage of the funding for lending scheme concept, where they would offer cheaper loans to banks, who could pass lower funding costs onto clients. Used in tandem, these two initiatives would likely prompt lower term deposit and mortgage rates in New Zealand. What is not yet certain, is whether it will be necessary to cut rates in 2021. Regardless, interest rates are likely to remain low in the short to medium term.

Murphy: A lot of advisers I’ve been meeting with recently say clients have been flooding to them with maturing term deposits, and are worried about the low interest rates on offer. Many are around retirement age and need a portfolio which supports their lifestyle.

Brown: Term deposits have been a safety net for investors for a long time, and so it has been quite confronting for some people seeing them decline to below 1%.

It does mean we are facing some serious challenges helping retirees to generate income from the savings they have built up over their lifetime.

‘It’s important to consider classic growth assets to help boost returns, but also a more diverse range of income generating assets’

‘Term deposits have been a safety net for investors for a long time, and so it has been quite confronting for some people seeing them decline to below 1%’ Murphy: There is a widespread understanding that rates will stay low for a long time and may even go negative. Is the solution as simple as switching out of term deposits to something higher risk?

Brown: The idea of investing in equities has real merit, as you can access attractive dividend yields and benefit from capital gains over time. If you take a medium-term view and mentally prepare for bouts of probable volatility then you have a good chance of sticking to your discipline. However, I think it’s important to keep each client’s risk appetite front of mind. Human psychology and history tell us that risk averse investors have

a proven tendency to bail out of volatile investments when markets fall, and selling near the bottom can be incredibly damaging to long-term returns.

Murphy: How do you see that working in an asset allocation sense?

Brown: I like to avoid looking at growth and defensive income assets as two distinct buckets, as if there is a binary choice between one or the other. It’s important to consider classic growth assets to help boost returns, but also a more diverse range of income generating assets. As finance theory tells us, a portfolio broadly spread across many different uncorrelated asset types can have a very powerful outcome.

Murphy: You manage Harbour’s diversified Income Fund; what sorts of assets do you use to achieve this kind of diversification? Let’s start with fixed income.

Brown: The Income Fund is designed to suit investors that may be making their first steps away from term deposits, or those of us that may not sleep well in volatile times.

Within fixed income, we have regular investment grade bonds, which are well understood and have a high “sleep well at night” quality about them. New Zealand bonds issued by the “gentailers” and listed property companies offer relatively attractive yields. And beyond these, options can also include small holdings of high yield corporates and private credit deals, where funds invest directly with companies on the same terms that banks receive. As long as you implement stringent credit research and risk management, there is potential to earn a premium in this space, as there is less capital contesting for returns in this segment. Examples we have invested in include funding for a portfolio of wind farms in Australia, and a data centre owner/operator.

Murphy: And what about equities?

Brown: In equities, there is a range of characteristics you can focus on, ranging

from stable dividend-payers, to the growth companies that are thriving as we adjust to the impact of technological change and Covid-19. These choices are available both domestically and globally.

Again, diversification is a key focus to get the returns available from equities, while managing the increased risk profile that they can bring.

Murphy: What process do you use to juggle these different asset classes when you are constructing a portfolio?

Brown: The job is made simpler because of the extremely experienced team around me, covering each of the different asset classes and providing research and modelling which influences the decisions that go into managing the Income Fund.

We also engage offshore fund managers to invest in a broad range of global credit and equities.

Each manager has their specialties, so we seek complementary and uncorrelated characteristics. My role is to manage the fund; to bring everyone’s knowledge and expertise together with a strong eye on risk management, and figure out how to utilise this information to perform for clients.

For any investor, diversification and awareness of your own risk appetite are key factors that can enable the move away from term deposits, and create a credible plan for improving investment returns. A

This does not constitute advice to any person. www.harbourasset.co.nz/disclaimer

If you would like more information on the Income Fund, or any other Harbour Fund, please contact: Shannon Murphy, Investment Specialist Shannon.murphy@harbourasset.co.nz (09) 365 1925

WWW.GOODRETURNS.CO.NZ | 29

REGULARS | INVESTMENT COMMENTARY

Interest rates going to near zero for … many years David van Schaardenburg asks: what’s the implications for investors and how does this affect retirement strategies?

BY DAVID VAN SCHAARDENBURG

I

’ve been investing or advising on client funds for over 35 years. In that time I’ve seen a lot of financial records set; be it sharemarket highs, falls, extreme volatility, etc.

The new financial record set in 2020 is the trend for interest rates on bank deposits and Government bonds falling towards zero.

I have never seen such low returns on offer for low risk assets. At the time of writing, the top five NZ high street banks are now offering on average under 1.0% for one-year TDs. And with the Reserve Bank’s new “Funding for Lending” programme (low cost “helicopter money” for the banks to lend) soon to start, interest rates are set to go further lower.

Interest rates in NZ have been trending down gradually over the last 10 years.

However like many things, the pace of change has been accelerated by the economic recession triggered by Covid-19 and the resultant relaxation of monetary policy plus introduction of “unconventional” monetary policy tools.

Not only do we believe 2020 is the year of record low interest rates but based on overseas experience near nil interest rates may be around for many years.

What does this mean for investors?

Between August 2019 resident household deposits with banks rose from $182 billion to $197 billion. So despite returns declining, with all the uncertainties of Covid households were prepared to squirrel away more of their savings into a secure investment (the bank) but one which would increasingly return less.

Makes sense in an uncertain world and over the short term the opportunity cost will usually not be too high.

However this cost can rise to become

30 | ASSET NOVEMBER 2020

Take the US. After bank rates fell dramatically in the GFC between 2007 and 2009 (3.7% to 0.8%), the average US one-year bank CD rates have ranged between 0.2 to 1.0% over the last decade. This is despite a good rate of economic growth between 2010 and 2020.

Similarly, in the UK their central bank base rate, which was 5.75% at the start of the GFC (late 2007), has ranged between 0.1 to 0.75% since 2010.

a material gap over medium to longer periods.

To highlight the cost over the medium to long term I provide clients a simple example of a 50-year-old couple who have invested $500,000 for their retirement and are highly concerned about the Covid recession so they’ve stuck it all in the bank for short-term capital security.

This is compared to another couple who are at the same age and stage, that choose to invest for retirement via a balanced portfolio as they presume they won’t be touching it for a long time – ie when they retire.

In each instance, general inflation has remained suppressed despite reasonable to good economic growth. So no requirement to raise interest rates.

Given the present weak medium-term economic outlook for New Zealand I see no reason the same will not occur in New Zealand for much of the next decade.

Each are hoping to draw $50,000 a year on their savings for retirement income needs from the age of 65.

End of year one1 – versus the balanced portfolio couple, the bank couple are only $20,000 behind in their portfolio value. Not great but not a disaster.

End of year five – the difference is starting to get painful. The opportunity cost between the two accounts has risen to $110,000 or 21% of original capital.

End of year 10 – the difference in accumulated wealth between the bank couple and their balanced portfolio friends has risen to $251,000 or 48%.

‘In the presumption New Zealand follows global trends, a bank based investment approach will no longer achieve the goals of many retirees’

How does this affect their respective retirement lifestyles?

Assuming they stick to the same investment strategy in retirement, each couple can anticipate the following retirement lifestyles.

2. Balanced portfolio based strategy The income needs of this couple in retirement are well met into their 80s when their lifestyle is expected to slow down and expenditure will probably be less. In addition both couples have the capacity to save more between now

The advice opportunity For those of your clients who have significant sums in the bank, it’s more important than ever they understand the long-term implications of the lower compounding returns that bank deposits are likely to deliver.

1 2

1. Bank deposit based strategy1 The safety first couple run out of retirement funds at age 72 and from that time are purely reliant on NZ Super for their lifestyle. Given average longevity for a 50-year-old female today is c.90 years

there is guaranteed to be significant income shortfall for this couple for most of their retired life.

and retirement plus have reasonable KiwiSaver balances to draw on.

In essence, by taking on more risk couple two are probably going to have the retirement lifestyle they’ve planned for while couple one are going down a problematic path, running out of money too early.

Many New Zealanders have in the past enjoyed the security of bank deposits as a place to get a steady low risk income in the lead up to and in retirement. In the presumption New Zealand follows global trends, a bank based investment approach will no longer achieve the goals of many retirees.

In addition, advisers can really help their clients by taking them through analyses that enable them to better understand how to bridge the trade-off between short-term capital security versus the longer-term greater accumulated wealth achievable from a diversified portfolio. A

David van Schaardenburg is a Senior Partner, Wealth Management at Findex.

An Adviser Disclosure Statement is available on request and free of charge. www.goodreturns.co.nz/disclaimers

In this comparative we have a 4.5% net return for a balanced portfolio vs. 0.75% bank deposit rate less 33% tax as the clients are still working.

The projection analyses have an average bank deposit rate of 1% and balanced portfolio return of 4.5%. Tax rate is 17.5%.

WWW.GOODRETURNS.CO.NZ | 31

REGULARS MorningLatest 1Yr 5Yr Size star 3Yr Transaction Return Return Rating Return $M Exit price % Overall

Name

NZ Insurance Cash AMP ARS-Cash AMP KiwiSaver Cash Fund AMP NZRT Cash Fund AMP Prem PSS OnePath NZ Cash AMP PSS Select Cash ANZ Default KiwiSaver Scheme-Cash Aon KiwiSaver ANZ Cash Aon KiwiSaver Nikko AM Cash ASB KiwiSaver Scheme's NZ Cash BNZ KiwiSaver Cash Fund Booster KiwiSaver Enhanced Income Fidelity Life Super-Super Cash Portfolio Fisher TWO KiwiSaver Scheme-Presv Kiwi Wealth KiwiSaver Scheme Cash Mercer KiwiSaver Cash NZ Defence Force KiwiSaver Cash OneAnswer KiwiSaver-Cash Fund SIL 60s + Sup Cash Fund Westpac KiwiSaver-Cash Fund

2.04 1.56 1.55 1.64 1.54 1.49 15.84 14.94 1.52 1.21 1.56 2.83 3011.3900 ---1.44 2.3 1.45

0.89 0.36 0.56 0.50 0.30 1.29 0.72 1.11 0.85 1.28 0.83 0.54 1.09 1.46 0.80 0.58 1.31 1.07 1.26

1.53 1.13 1.33 1.30 1.10 1.93 1.44 1.71 1.60 1.97 1.55 1.09 1.87 2.23 1.57 1.37 1.87 1.79 1.82

1.79 1.41 1.60 1.61 1.41 2.12 1.67 1.99 1.89 2.21 1.73 1.16 2.08 2.47 1.86 -2.03 1.92 2.06

6.32 119.56 116.81 2.83 0.76 22.16 6.55 3.05 733.11 244.69 37.86 8.91 34.47 320.46 32.50 3.10 64.95 1.69 533.40

--------------------

1.82 8.73 0.87 2.24 10.98

9.42 12.47 9.65 10.38 14.19

11.38 7.91 12.60 5.51 11.70 13.82 12.01 10.71 15.69 44.82

3 3 3 2 4

1.51 -8.53

9.62 2.61

11.02 7.21 5.84 1.74 10.38 5.81 6.16 4.67 4.80 4.58 6.51 25.83 6.60 15.79

NZ Insurance Equity Region Australasia AMP ARS-NZ & Australian (multi-manager) AMP ARS-NZ & Australian (Value) AMP NZRT Australasian Shares Booster KiwiSaver Trans-Tasman Share OneAnswer KiwiSaver-Australasian Share

4.48 5.4 1.82 2.01 2.75

NZ Insurance Equity Region Australia AMP KiwiSaver Australasian Shares Summer Australian Equities

1.51 1.27

---

6.71 8.68

4 3

13.65 13.98 10.09 9.91 14.20 12.65

15.07 8.19 16.12 7.60 12.24 1.36 11.81 10.64 15.74 30.06 -- 15.87

3 3 1 1 4 3

11.13 8.69 7.89 7.68 11.48 16.91 11.53 11.95

9.95 7.56 10.58 -10.60 12.73 10.54 --

8.53 10.41 33.03 14.36 61.16 14.60 11.31 20.99

3 2 3 2 5 4 4 4

14.93 13.89 6.85 10.12 4.25 9.73 6.33 -8.56 -7.10 9.94 8.66 10.63

7.90 3.21 4.06 5.02 5.65 9.65 9.39

5 3 2 3 3 4 4

8.89

3

NZ Insurance Equity Region NZ AMP Prem PSS ACI NZ Shares AMP Prem PSS ACI NZ Shares Index Fidelity Life NZ Shares Portfolio Fidelity Life Super-Super NZ Share SIL 60s + Sup NZ Share Fund Summer New Zealand Equities

3.85 3.47 9.19 -8.59 1.59

NZ Insurance Equity Region World AMP Prem PSS ACI Global Shares Index AMP Prem PSS FD Intl Share Fund 1 Value Mercer KiwiSaver Shares NZ Defence Force KiwiSaver Shares OneAnswer KiwiSaver-Intl Share OneAnswer KiwiSaver-Sustainable Int Shr SIL International Share Summer Global Equities

2.93 1.68 --2.55 2.84 4.86 1.66

NZ Insurance Equity Region World - Hedged AMP ARS-International Shares (Growth) AMP ARS-International Shares (Passive) AMP ARS-International Shares (Value) AMP KiwiSaver International Shares AMP KiwiSaver Passive International AMP NZRT International Shares AMP NZRT Passive International Shares AMP Prem PSS ACI Global Shares Index Hdg Booster KiwiSaver International Share FANZ Lifestages KiwiSaver High Growth Fidelity Life Aggressive Fidelity Life International Fidelity Life Super-Sup Intl Fidelity Life Super-Super Aggressive Fisher FuturePlan - Intl Coms Fisher TWO KiwiSaver Scheme-Eq

2.2 2.02 1.59 1.48 1.57 1.82 1.88

20.96 6.54 6.10 3.17 6.19 4.58 6.19

2.75

6.90

5.43

2.56 1.44 4.2 3.11 --4.01 6162.4500

12.87 0.71 -0.55 2.76 12.77 8.16 5.81 10.12

10.13 10.50 18.36 7.22 7.75 174.40 4.58 5.88 0.45 6.32 7.04 0.36 9.99 9.90 25.05 8.76 9.03 27.36 8.23 9.29 27.43 11.77 12.43 186.23

10.53

4 3 1 2 3 3 3 5

NZ Insurance Equity Sector Global - Real Estate AMP ARS-Listed International Property AMP KiwiSaver Property OneAnswer KiwiSaver-Intl Property

4.05 1.22 1.46

-13.50 -9.80 -12.99

2.15 6.40 1.73

3.08 -3.27

4.35 5.86 8.11

2 5 3

NZ Insurance Equity Sector NZ - Real Estate AMP ARS-Listed NZ & Australian Property MFL Property Fund OneAnswer KiwiSaver-Australasian Prpty Summer Listed Property

4.48 5.12 2.61 1.41

-5.10 0.24 -1.62 -3.06

11.33 10.02 3.50 8.43 8.54 513.72 13.26 11.86 31.76 11.56 -8.14

3 1 5 3

2.76 1.14 1.33

3.75 3.72 5.22

3.90 3.77 4.50

3.43 -3.82

1.53 1.32 2.21

3 2 3

2.6

3.11

3.62

4.34

3.42

4

NZ Insurance Global Bond AMP ARS-International Fixed Interest AMP KiwiSaver International Fxd Intr AMP NZRT International Fixed Interest AMP Prem PSS PIMCO Global Fixed Interest

32 | ASSET NOVEMBER 2020

Name AMP Prem PSS SSgA Global Fixed Int Index OneAnswer KiwiSaver-Intl Fxd Int Summer Global Fixed Interest

MorningLatest 1Yr 5Yr Size star 3Yr Transaction Return Return Rating Return $M Exit price % Overall 2.2

3.56

3.84

3.58

6.65

2

1.93 1.13

5.19 6.25

4.99 4.38

4.11 --

3.54 1.10

3 3

0.74 1.14 -2.67 2.86 2.49

0.02 -0.63 2.72 8.99 9.00 9.04

1.26 1.58 3.16 9.47 9.48 9.50

-4.30 1.96 3.02 10.86 10.87 10.88

5.96 62.58 126.74 16.54 24.56 20.00

-------

0.34 8.36 0.80 -0.08 8.87 8.47 14.45 7.27 7.17 8.78 3.36 3.14

6.32 8.62 402.56 8.31 -- 23.02 6.70 8.97 297.49 5.77 8.02 37.12 11.31 12.36 114.42 9.16 9.75 426.11 12.06 11.56 131.70 8.82 9.22 85.53 10.48 10.28 1064.07 8.43 8.25 1738.77 6.78 9.26 216.50 6.56 -- 30.21

3 3 3 3 4 4 5 4 4 4 4 3

2.02 0.32 -0.63 0.12 3.47 1.69

5.92 5.02 1.55 5.63 6.41 5.69

7.18 133.36 -- 16.03 -- 12.69 -5.18 -- 29.76 6.90 1019.58

3 2 1 2 3 2

1.71

5.24

6.15 767.24

2

2.96 1.96 -0.40 0.78 1.77 3.59 3.12 6.43 0.37 0.66 1.03 1.14 4.24 4.25 3.95 4.56 4.38 3.44 6.13 6.20 9.31 3.69 5.96 5.47 6.50 8.24 3.25 6.04 3.05 4.26 4.72 5.83 4.46

5.84 5.89 1.75 6.19 5.43 6.72 6.04 7.52 5.20 4.37 4.96 5.03 6.57 6.57 6.39 6.72 6.88 6.83 7.32 7.45 8.99 6.42 7.16 7.21 8.24 7.50 5.73 8.48 5.53 6.59 7.85 7.16 5.89

6.97 7.16 --6.37 7.95 7.20 8.15 -5.33 6.13 6.24 6.87 6.90 7.18 8.33 8.45 8.03 8.60 7.62 8.51 6.67 7.18 7.43 8.42 6.92 7.09 9.07 -6.95 -7.74 6.54

54.50 873.52 3.55 3.56 298.44 94.67 148.18 172.10 6.12 6.07 1.84 47.21 196.13 2807.07 34.74 25.24 209.99 2156.80 556.13 571.36 104.23 3.83 285.87 129.45 997.11 1875.97 448.49 472.12 67.37 641.65 110.36 1792.20 92.04

3 3 1 3 2 3 3 4 2 1 2 2 4 4 4 -5 4 5 3 5 2 4 4 4 3 3 5 2 4 4 4 3

5.56

6.19

3.35

3

5.28 4.34 3.67 5.72 5.51 5.52 5.12 4.62 3.59

-4.80 3.09 5.39 6.01 5.98 5.38 5.33 4.03

19.63 1401.73 1.05 1219.80 4.64 79.21 4189.25 897.14 208.32

3 2 2 5 -5 3 4 2

NZ Insurance Miscellaneous AMP ARS-UK Cash Booster KiwiSaver Capital Guaranteed Kiwi Wealth KiwiSaver Scheme CashPlus Westpac KiwiSaver-Capital Protect Plan 3 Westpac KiwiSaver-Capital Protect Plan 4 Westpac KiwiSaver-Capital Protect Plan 5

NZ Insurance Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund AMP KiwiSaver Nikko AM Growth AMP NZRT AMP Aggressive AMP PSS Select Growth Booster KiwiSaver Geared Growth Booster KiwiSaver High Growth Booster KiwiSaver Socially Rsp Inv Gr Fisher FuturePlan - Growth Generate KiwiSaver Focused Growth Fund Kiwi Wealth KiwiSaver Scheme Growth Mercer KiwiSaver High Growth NZ Defence Force KiwiSaver High Growth

1.89 1.45 3.88 2.14 2.89 1.99 2.44 3.86 2.08 ----

NZ Insurance Multisector - Balanced AMP ARS-Balanced 2.43 AMP Ethical Balanced Fund 1.29 AMP KiwiSaver AMP Global Multi-Asset 1.15 AMP KiwiSaver AMP Income Generator 1.27 AMP KiwiSaver ASB Balanced 1.34 AMP KiwiSaver LS Balanced Fund 1.99 AMP KiwiSaver LS Moderate Balanced 1.94 Fund AMP KiwiSaver Mercer Balanced 2.16 AMP NZRT AMP Balanced Fund 3.53 AMP NZRT AMP Global Multi-Asset 1.14 AMP NZRT AMP Income Generator 1.28 AMP NZRT AMP Moderate Balanced 2.54 AMP NZRT ASB Balanced Fund 2.52 AMP NZRT Mercer Balanced 2.9 AMP NZRT Nikko AM Balanced 3.3 AMP NZRT Responsible Investment Bal 1.3 AMP PSS Lifesteps Consolidation 2.06 AMP PSS Lifesteps Progression 2.22 AMP PSS Select Balanced 2.13 ANZ Default KiwiSaver Scheme-Balanced 2.08 ANZ KiwiSaver-Balanced 2.17 Aon KiwiSaver ANZ Balanced 29.97 Aon KiwiSaver Russell Lifepoints 2035 10.92 Aon KiwiSaver Russell Lifepoints Bal 11.32 ASB KiwiSaver Scheme's Balanced 2.2 BNZ KiwiSaver Balanced Fund 1.79 Booster KiwiSaver Balanced 2.13 Booster KiwiSaver Socially Rsp Inv Bal 1.69 Fidelity Life Balanced 5.5 Fidelity Life Super-Super Balanced -Fisher FuturePlan - Balanced 5 Fisher TWO KiwiSaver Scheme-Bal 6178.2800 Kiwi Wealth KiwiSaver Scheme Balanced -Mercer KiwiSaver Balanced -Milford KiwiSaver Balanced Fund 2.66 NZ Defence Force KiwiSaver Balanced -OneAnswer KiwiSaver-Balanced 2.2 Summer Balanced Selection 1.36 Westpac KiwiSaver-Balanced Fund 2.15 Westpac Retirement Plan - Balanced Port 4.32

NZ Insurance Multisector - Balanced Non-PIE Sovereign - Colonial Invstrbds - Beaver

0.47

2.86

NZ Insurance Multisector - Conservative AMP KiwiSaver ANZ Conservative AMP KiwiSaver Default (Default) AMP PSS Select Income ANZ Default KiwiSaver Scheme Cnsrv(Dflt) Aon KiwiSaver Russell Lifepoints 2015 Aon KiwiSaver Russell Lifepoints Cnsrv ASB KiwiSaver Scheme's Cnsrv (Default) BNZ KiwiSaver Conservative (Default) BNZ KiwiSaver First Home Buyer Fund

1.22 1.85 1.96 1.99 10.75 11.25 2 1.47 1.22

5.11 2.75 2.73 4.89 4.88 4.91 3.34 3.67 2.74

MorningLatest 1Yr 5Yr Size star 3Yr Transaction Return Return Rating Return $M Exit price % Overall Booster KiwiSaver Default Saver 1.4 4.23 5.47 5.25 110.76 3 FANZ Lifestages KiwiSaver Income 1.17 2.60 3.12 3.11 111.90 1 Fisher FuturePlan - Capital Prot 1.27 1.51 1.50 1.50 17.55 1 Fisher TWO KiwiSaver Cash Enhanced(Dflt) 2 4.97 5.66 5.60 730.90 4 Kiwi Wealth KiwiSaver Scheme Cnsrv -7.21 6.31 5.34 945.01 4 Kiwi Wealth KiwiSaver Scheme Default -5.03 5.44 5.32 320.95 4 Mercer KiwiSaver Conservative (Default) -3.55 4.94 5.29 1185.06 4 Milford KiwiSaver Conservative Fund 1.92 4.00 5.82 6.32 191.53 5 NZ Defence Force KiwiSaver Conservative -3.16 4.60 -7.73 2 OneAnswer KiwiSaver-Conservative 1.95 4.58 5.31 4.97 505.90 3 Westpac KiwiSaver Default 1.39 4.25 5.21 5.19 344.09 3 Name

NZ Insurance Multisector - Growth AMP ARS-High Growth AMP KiwiSaver ANZ Balanced Plus AMP KiwiSaver ANZ Growth AMP KiwiSaver ASB Growth AMP KiwiSaver LS Growth Fund AMP KiwiSaver Nikko AM Balanced AMP NZRT AMP Growth AMP NZRT ANZ Balanced Plus AMP NZRT ANZ Growth AMP NZRT ASB Growth AMP NZRT Nikko AM Growth AMP PSS Lifesteps Growth ANZ Default KiwiSaver SchemeBalanced Gr ANZ Default KiwiSaver Scheme-Growth ANZ KiwiSaver-Balanced Growth Aon KiwiSaver Milford Aon KiwiSaver Nikko AM Balanced Aon KiwiSaver Russell Lifepoints 2045 Aon KiwiSaver Russell Lifepoints Growth ASB KiwiSaver Scheme's Growth BNZ KiwiSaver Growth Fund Booster KiwiSaver Balanced Growth Fidelity Life Growth Fidelity Life Super-Super Growth Fisher Funds Growth KiwiSaver Fund Fisher TWO KiwiSaver Scheme-Gr Generate KiwiSaver Growth Fund Mercer KiwiSaver Growth Milford KiwiSaver Active Growth Fund NZ Defence Force KiwiSaver Growth OneAnswer KiwiSaver-Balanced Growth OneAnswer KiwiSaver-Growth Fund SIL 60s + Sup Balanced Fund Westpac KiwiSaver-Growth Fund Westpac Retirement Plan - Dynamic Port

2.22 2.5 1.41 1.4 1.93 2.25 2.73 3.15 1.41 1.39 1.43 2.23

1.69 5.63 5.30 2.48 1.29 5.99 1.83 4.55 5.40 2.76 8.12 1.13

6.52 7.47 7.76 6.75 6.33 7.19 6.69 6.43 8.00 6.96 8.37 5.52

8.33 8.07 --8.14 7.83 8.48 7.03 ---7.41

48.25 290.67 30.63 25.89 799.34 87.87 251.53 290.51 14.36 16.21 15.19 0.19

2 3 3 2 2 2 2 2 4 2 3 1

2.14

4.00

7.12

7.84 203.09

3

2.17 2.27 4.28 22.48 10.85 11.45 2.2 1.98 2.19 5.55 -2.66 2.2100 1.96 -4.34 -2.3 2.36 5.27 2.26 5.02

3.34 4.00 6.21 6.26 4.25 3.95 2.28 7.26 7.56 3.23 7.22 7.91 6.23 4.67 3.19 6.11 2.91 4.01 3.35 4.16 5.42 4.26

7.43 7.12 9.99 7.34 7.25 7.29 7.17 8.60 8.86 7.39 8.54 10.17 8.44 9.71 6.20 10.00 5.95 7.13 7.45 7.34 7.78 6.65

8.60 7.85 10.62 8.05 9.26 9.30 9.12 10.29 9.10 8.02 8.50 10.53 9.36 9.54 8.23 10.65 -7.88 8.69 7.91 8.75 7.65

182.41 2444.25 167.30 11.39 21.94 52.26 3374.91 814.43 386.65 2.31 152.78 2388.67 612.74 812.03 134.68 1813.54 29.58 556.62 479.50 95.16 1794.37 114.43

4 3 5 3 -4 3 5 3 2 3 5 4 4 3 5 2 4 4 3 4 3

2.58

6.42

7.25

1.17

4

2.08 2.19 1.75 1.73 4.78 2.80 0.73 2.00 2.05 5.05 0.80 0.72 0.83 4.46 4.46 4.75 4.74 2.34 5.05 4.92 4.31 4.35 3.93 3.27 3.03 4.47

4.55 5.04 4.30 4.82 5.93 3.90 3.28 5.04 5.16 6.17 3.34 3.93 3.44 5.96 5.95 6.04 6.30 5.60 6.22 6.11 5.88 5.83 6.96 5.02 4.79 5.97

4.79 -4.54 5.46 -4.52 3.52 5.68 --3.55 4.55 3.69 5.91 5.92 7.11 7.29 6.41 7.19 5.88 5.61 5.82 6.47 5.77 -5.94

36.91 19.18 432.61 583.96 29.21 117.42 337.19 178.95 19.15 17.61 3.12 5.76 8.62 74.70 1390.40 23.72 28.99 2036.93 620.63 203.71 1010.86 171.75 444.23 159.72 6.48 221.52

2 3 2 3 3 2 1 3 3 4 2 2 2 4 4 -5 4 5 4 3 4 4 3 2 4

NZ Insurance Multisector - Growth Non-PIE Sovereign - Colonial Invstrbds - Stag

0.53

NZ Insurance Multisector - Moderate AMP ARS-Conservative AMP KiwiSaver ASB Moderate AMP KiwiSaver LS Conservative Fund AMP KiwiSaver LS Moderate Fund AMP KiwiSaver Nikko AM Conservative AMP NZRT AMP Capital Assured Fund AMP NZRT AMP Conservative AMP NZRT AMP Moderate AMP NZRT ASB Moderate AMP NZRT Nikko AM Conservative AMP PSS Lifesteps Maturity AMP PSS Lifesteps Stability AMP PSS Select Conservative ANZ Default KiwiSaver Scheme-Cnsrv Bal ANZ KiwiSaver-Conservative Balanced Aon KiwiSaver Russell Lifepoints 2025 Aon KiwiSaver Russell Lifepoints Mod ASB KiwiSaver Scheme's Moderate BNZ KiwiSaver Moderate Fund Booster KiwiSaver Moderate Fisher Funds Conservative KiwiSaver Fund Fisher TWO KiwiSaver Scheme-Cnsrv Generate KiwiSaver Conservative Fund Mercer KiwiSaver Moderate NZ Defence Force KiwiSaver Moderate OneAnswer KiwiSaver-Conservative Bal

2.53 1.25 1.98 1.95 1.27 2.8 3.16 2.48 1.26 1.27 1.89 2.04 1.98 2.02 2.06 10.73 11.47 2.1 1.64 1.98 1.84 2.0900 1.56 --2.08

For more information call 0800 888 361 Name Westpac KiwiSaver - Moderate Westpac KiwiSaver-Conservative Fund

MorningLatest 1Yr 5Yr Size star 3Yr Transaction Return Return Rating Return $M Exit price % Overall 1.48 4.87 6.13 6.30 680.69 4 1.92 4.12 5.33 5.38 2954.48 3

NZ Insurance NZ Bonds AMP ARS-NZ Fixed Interest AMP KiwiSaver NZ Fixed Interest AMP NZRT NZ Fixed Interest AMP Prem PSS ACI NZ Fixed Interest Fidelity Life NZ Fixed Interest Fidelity Life Super-Super Fixed Int OneAnswer KiwiSaver-NZ Fixed Interest SIL 60s + Sup NZ Fixed Interest Summer New Zealand Fixed Interest Westpac Retirement Plan - Accum Port

2.94 1.21 1.46 2.43 4.54 -2 3.5 1.19 3.48

4.87 4.72 4.80 4.66 3.68 2.91 5.73 5.65 4.41 1.54

5.77 5.60 5.79 5.67 4.06 3.81 6.36 6.27 5.05 2.14

4.81 -4.79 4.70 3.42 3.36 5.12 4.89 -2.01

5.64 5.56 12.99 10.72 0.19 1.27 11.60 5.64 9.88 14.48

3 3 3 3 1 1 4 3 2 1

0.39

1.05

2.16

2.35

0.19

3

1.15 1.64 1.38 -2.21 1.38 1.04

0.42 0.90 0.32 0.13 1.11 0.95 1.58

1.27 1.70 1.07 0.33 1.82 1.75 2.20

1.59 5.62 1.99 3590.12 1.34 2.30 0.60 281.92 2.07 12.81 1.95 24.00 2.47 230.77

--------

0.82 10.53 17.91 -2.33 -16.01 -8.14 -2.90 11.74 13.13 -3.05 7.29 11.64 15.10 6.81 2.71 34.77 12.43 25.53 7.08

8.72 13.16 16.45 5.98 1.97 5.63 -0.85 12.03 11.36 7.47 13.20 15.26 11.41 6.18 11.85 19.49 17.16 20.10 5.56

10.70 14.55 17.27 6.68 6.44 8.34 8.49 16.28 15.73 8.21 14.63 16.02 13.16 8.87 13.72 19.89 11.36 19.95 7.38

2 4 5 2 1 2 1 4 3 2 4 5 3 3 3 5 4 5 2

NZ Insurance NZ Bonds Non-PIE Sovereign - Colonial Invstrbds - Fx Int

NZ OE Cash AMP AIT NZ Cash - UT35 AMP Capital NZ Cash Fund AMP PUT Select Cash ASB Cash Fund BT Enhanced Cash Fund Fisher Cashplus Fund Nikko AM NZ Cash

NZ OE Equity Region Australasia AMP AIT Australasian Shrs-Multi Mgr-UT07 BT PS Australasian Diversified Share Castle Point Ranger Fund Devon Alpha Fund Devon Dividend Yield Devon Trans-Tasman Fund Forte Equity Trust Harbour Australasian Equity Harbour Australasian Equity Focus Fund Harbour Australasian Equity Income Milford Trans-Tasman Equity Mint Australasian Equity Fd (Retail) Nikko AM Concentrated Equity OneAnswer SAC Equity Selection Pie Australasian Dividend Pie Australasian Emerging Companies Pie Australasian Growth Fund Pie Growth 2 Fund QuayStreet Altum

3.83 3.18 2.38 1.86 1.73 4.09 1.43 3.64 2.27 1.96 3.44 4.07 2.82 2.79 3.17 5.35 7.39 2.63 1.58

11.19 55.94 147.83 101.28 29.33 68.62 21.49 307.22 18.02 50.65 571.51 302.97 63.87 12.39 137.93 131.92 114.89 327.79 64.87

NZ OE Equity Region Australia AMP Capital Australian Share Fund Devon Australian Fisher Funds Australian Growth Fund Fisher Funds Premium Australian Fund Milford Dynamic OneAnswer SAC Australian Share QuayStreet AU Equity

2.95 1.32 4.89 2.16 2.41 3.56 1.53

-8.21 -16.53 6.80 7.16 8.21 -20.13 -7.78

5.18 5.85 263.86 0.14 4.22 11.69 12.47 11.18 73.20 12.72 11.38 132.93 12.85 12.47 411.90 -3.77 -0.36 17.52 1.60 4.33 53.17

3 3 4 5 5 1 3

NZ OE Equity Region Emerging Markets AMP AIT Emerging Markets - UT65 AMP Capital Emerging Markets Share

1.59 1.33

0.91 2.65

2.38 3.91

6.14 7.03

1.50 67.28

---

1.41

14.12

5.76

--

65.75

--

3.04 3.84 3.94 3.05 13.05 3.11 7.99 3.8 2 4.24 2.89 6.68 3.59 2.16 1.77

15.14 11.59 11.46 7.75 21.42 21.80 14.68 5.98 1.12 16.10 7.20 10.15 10.05 7.50 1.74

15.98 14.20 13.64 13.93 18.13 18.72 16.46 12.68 10.42 18.48 12.57 14.03 13.86 13.35 10.81

17.00 15.64 14.96 15.56 18.21 18.50 15.86 15.46 13.13 20.60 16.29 15.70 16.37 15.99 14.36

37.32 500.88 3.26 3.32 246.51 189.33 66.61 64.49 292.55 679.01 36.44 63.86 110.41 261.81 114.55

4 4 3 3 5 5 3 3 2 5 3 4 4 4 2

1.87 1.64 1.75

3.82 24.22 4.98

9.03 -8.74

8.91 891.65 -- 85.44 7.49 3.84

3 -2

NZ OE Equity Region Europe Pie Growth UK & Europe

NZ OE Equity Region NZ AMP Capital Ethical Leaders NZ Shares AMP Capital NZ Shares Fund AMP Prem PUT ACI NZ Shares AMP Prem PUT ACI NZ Shares Index Fisher Funds NZ Growth Fund Fisher Funds Premium New Zealand Fund Fisher Trans Tasman Equity Trust Forsyth Barr New Zealand Equities Harbour NZ Equity Advanced Beta Fund Milford NZ Equities Wholesale Fund Nikko AM Core Equity OneAnswer SAC NZ Share QuayStreet NZ Equity Russell Investments NZ Shares Smartshares NZ Core Equity Trust

NZ OE Equity Region World AMP Capital Core Global Shares Fund AMP Capital Global Companies AMP Prem PUT FD Intl Share Fund 1 Value

MorningLatest 1Yr 5Yr Size star 3Yr Transaction Return Return Rating Return $M Exit price % Overall AMP Prem PUT SSgA Global Shares Index 2.53 6.67 10.82 9.34 2.79 3 Elevation Capital Global Shares Fund 1.57 2.76 2.86 4.49 18.09 1 Fisher Funds Property and Infrastructure 3.01 -6.21 9.73 11.66 140.53 4 Milford Global Select Wholesale Fund 2.65 19.95 18.86 -- 926.63 5 OneAnswer SAC International Share 2.89 6.36 11.30 10.43 258.07 4 Pie Global Growth 2.07 25.10 12.57 11.82 130.25 5 QuayStreet International Equity 2.38 2.62 8.47 7.43 321.83 2 Russell Investments Global Shares 2.19 -0.03 6.88 7.47 89.43 2 T.Rowe Price Global Equity Growth 2.41 25.37 19.04 15.42 187.85 5 Name

NZ OE Equity Region World - Hedged AMP AIT Global Equities-Multi Mgr-UT28 AMP AIT Global Infrastructure - UT04 AMP Capital All Country Glb Shares Idx AMP Capital Core Hedged Global Shares Fd AMP Capital Ethical Leaders Global Shars AMP Capital Global Listed Infrastructure AMP Capital Global Shares Fund AMP Prem PUT SSgA Global Shares IndexHdg ASB World Shares BT PS International Diversified Share Fisher Funds International Growth Fund Fisher Funds Premium International Fund Fisher Global Fund Milford Global Equity Nikko AM Global Equity Hedged Pathfinder Global Water Pathfinder World Equity Fund Russell Investments Hedged Global Shares

3.83 -9.07 6.53 4.31 0.57 -13.32 4.30

4.33 3.54 -3.39 4.58 2.16 6.36

8.58 10.99 6.57 23.19 -- 52.01 9.54 531.17 7.18 79.28 5.55 321.39 9.47 58.48

2 3 -3 2 1 4

2.77

6.96

4.87

8.61

3

1.9 2.22 2.96 3.11 6.78 2.03 2.25 2.31 1.98 2.2

4.64 7.51 16.84 17.25 6.24 18.56 13.30 -0.18 -1.04 1.99

6.10 8.78 523.48 6.87 8.53 62.26 15.64 13.20 69.22 16.07 13.42 228.10 8.36 9.50 118.43 12.32 9.43 875.21 6.97 10.81 46.59 6.74 8.04 29.79 5.43 5.76 5.70 3.39 8.12 88.97

3 3 4 5 3 4 3 3 2 2

-10.09 -14.56 -12.90

5.64 1.75 1.63

5.65 1.50 3.00 192.43 3.09 257.82

5 2 3

-8.69 -9.41 -4.43 -1.66

10.14 9.84 170.69 7.74 9.09 34.67 12.39 10.76 84.68 13.21 11.82 172.52

2 2 3 4

3.75 1.53 1.47

4.55

NZ OE Equity Sector NZ - Real Estate AMP Australasian Property Index Fund BT Property Fund Mint Australia NZ Rl Estt Invm (Ret) OneAnswer SAC Property Securities

2.76 5.19 2.51 4.57

NZ OE Global Bond AMP AIT Fixed Interest Income - UT36 AMP AIT Global Bonds-Multi Mgr-UT13 AMP Capital Global Short Duration AMP Capital Hdgd Gbl Fixed Intrst Fund AMP Prem PUT SSgA Global Fixed Int Index BT PS International Diversified Bond Fisher BondPlus Fund Fisher Funds Income Milford Global Corporate Bond Fund Nikko AM Global Bond OneAnswer SAC International Fixed Intrst Russell Investments Global Fixed Int

1.28 2.17 1.09 2.65

1.48 2.79 1.78 3.89

1.95 3.16 1.99 4.09

2.18 48.86 2.72 6.53 2.39 123.51 3.96 104.08

1 1 1 3

2.03

3.62

3.74

3.46

2

2.46 2.43 1.12 1.09 1.31 1.38 1.22

2.66 2.75 4.02 3.53 6.29 5.04 5.20

3.64 3.70 4.21 4.30 5.74 4.85 4.83

3.51 90.67 3.97 167.58 4.05 70.57 -- 788.65 5.04 47.88 3.98 1.79 4.94 646.20

2 3 3 3 5 3 5

0.66 1.17 1.43 0.89 1.45

-9.16 0.50 -0.49 -5.30 -1.72

-4.64 2.40 0.41 0.56 -0.14

-1.77 76.20 3.30 3.33 -0.71 23.07 -0.81 0.31 3.97 51.11

------

2.3 1.66 2.2 3.12 2.04

-0.20 1.20 0.33 0.14 0.12

5.43 6.42 5.28 5.57 5.79

7.59 8.57 7.10 7.34 7.93

58.53 7.81 25.10 8.66 17.92

2 3 2 2 2

1.5 2.09 2.2 1.3 1.17 2.04 2.11 1.9 2.6 2.11 2.1 2.06 2.65

1.50 0.94 0.51 -0.39 0.64 1.09 4.21 2.96 5.79 4.21 3.79 3.55 5.30

5.42 4.02 5.23 1.92 5.97 4.92 6.39 6.30 8.29 6.39 6.22 6.00 6.62

6.70 4.64 6.04 3.47 7.18 6.08 6.67 7.48 8.83 6.67 6.21 5.79 7.06

40.23 48.54 60.10 110.93 167.46 39.04 440.46 385.65 929.79 62.28 253.73 51.34 559.63

2 1 2 1 3 2 3 3 5 3 2 2 3

3.38

NZ OE Miscellaneous AMP Capital Commodities Nikko AM Income NZAM Global Growth Pathfinder Commodity Plus Fund Salt Long Short Fund

NZ OE Multisector - Aggressive AMP AIT Aggressive Portfolio - UT31 AMP AIT eInvest - Aggressive - MDF7 AMP AIT Growth Portfolio - UT03 AMP Capital Ethical Leaders Growth AMP PUT Select Growth

NZ OE Multisector - Balanced AMP AIT eInvest - Balanced - MDF5 AMP AIT Moderate Portfolio - UT01 AMP Capital Ethical Leaders Balanced AMP Capital Global Multi Asset Fund AMP Capital Income Generator Fund AMP PUT Select Balanced ANZ Invmt Fds Balanced ASB Balanced Milford Balanced Fund OneAnswer MAC Balanced QuayStreet Balanced QuayStreet Socially Responsible Inv Westpac Active Balanced Trust

NZ OE Multisector - Conservative AMP PUT Select Income ANZ Invmt Fds Conservative ASB Conservative Milford Conservative OneAnswer MAC Conservative QuayStreet Conservative QuayStreet Income Westpac Active Conservative Trust

1.82 1.74 1.79 1.22 1.74 1.93 1.19 2.11

2.74 4.52 2.66 4.14 4.52 3.70 1.13 3.46

3.67 5.12 4.50 5.98 5.12 5.11 4.67 4.50

3.02 4.75 4.76 6.47 4.75 5.21 5.26 4.44

1.83 74.87 153.63 545.67 22.40 103.43 272.12 311.21

1 3 2 5 3 3 3 3

2.25 1.61 2.33 2.5 1.88 3.9 4.29 1.3 2.33 2.5 3.7 2.2 2.65

1.38 1.23 3.96 3.31 1.82 5.50 6.70 14.96 3.96 3.31 3.97 3.62 4.88

4.94 6.09 74.80 6.01 7.86 11.57 6.94 7.63 281.74 7.25 8.40 160.72 6.64 8.55 125.85 7.13 7.24 12.21 10.11 10.59 1312.70 --- 16.48 6.94 7.63 48.65 7.25 8.40 38.78 6.98 7.55 53.04 6.79 6.79 263.75 7.28 8.06 122.51

1 2 3 3 3 2 5 -3 3 3 2 3

1.34 1.41 2.65 1.94 1.92 1.82 1.83 1.02 1.8 1.11 1.92 1.73

1.37 1.21 0.97 0.86 4.42 2.74 1.80 2.65 0.19 2.36 4.42 4.33

3.95 4.49 3.62 3.40 5.78 5.19 5.05 5.61 6.60 5.35 5.78 5.63

4.27 5.20 3.78 3.54 5.69 5.53 5.86 -8.51 5.24 5.69 5.75

10.00 41.47 7.29 12.25 248.88 804.51 542.80 127.47 2370.29 225.14 25.36 1001.50

2 2 2 1 4 3 3 3 5 2 4 3

1.34 2.03 1.84 1.31 1.78 1.53 1.95 2 1.21 1.16 1.21 1.16 1.29 1.99 1.44 1.32 1.28

2.50 4.24 4.93 2.79 4.01 4.98 4.52 4.45 5.26 5.21 4.65 6.64 5.75 5.59 4.33 4.67 1.60

3.52 5.25 5.94 3.50 4.45 6.49 5.22 5.22 5.43 5.38 5.59 6.85 6.32 6.23 4.16 5.71 2.48

3.42 4.30 4.98 3.45 4.01 5.03 4.52 4.71 4.83 4.67 5.23 5.49 5.44 5.00 4.24 4.86 2.48

6.01 10.09 2360.94 566.92 145.22 88.55 29.06 205.34 179.01 478.86 811.81 107.52 208.97 15.66 394.03 181.14 5.63

2 2 4 2 2 4 2 3 3 3 4 5 5 4 2 3 1

NZ OE Multisector - Growth

1.4 2.96 1.16 1.7 1.89 1.73 3.41

NZ OE Equity Sector Global - Real Estate AMP AIT Global Property - UT54 AMP Capital Global Propty Securities Fd OneAnswer SAC International Property

MorningLatest 1Yr 5Yr Size star 3Yr Transaction Return Return Rating Return $M Exit price % Overall

Name

AMP AIT Balanced Portfolio - UT 02 AMP AIT eInvest - Growth - MDF6 ANZ Invmt Fds Balanced Growth ANZ Invmt Fds Growth ASB Growth Fisher Multi Sector Fund Milford Active Growth Mint Diversified Growth OneAnswer MAC Balanced Growth OneAnswer MAC Growth OneAnswer SAC Balanced Growth QuayStreet Growth Westpac Active Growth Trust

NZ OE Multisector - Moderate AMP AIT eInvest - Conservative - MDF2 AMP AIT eInvest - Moderate - MDf3 AMP Capital Ethical Leaders Conservative AMP PUT Select Conservative ANZ Invmt Fds Conservative Balanced ASB Conservative Plus ASB Moderate Harbour Income Milford Diversified Income Fund Mint Diversified Income OneAnswer MAC Conservative Balanced Westpac Active Moderate Trust

NZ OE NZ Bonds AMP AIT NZ Bond - UT36 AMP AIT NZ Fixed Interest - UT60 AMP Capital NZ Fixed Interest Fund AMP Capital NZ Short Duration BT Corporate Bond Fund Fisher New Zealand Fixed Inc Trust Forsyth Barr NZ Fixed Interest Forsyth Barr Premium Yield Harbour NZ Core Fixed Interest Harbour NZ Corporate Bond Milford Trans-Tasman Bond Nikko AM NZ Bond Nikko AM NZ Corporate Bond OneAnswer SAC NZ Fixed Interest QuayStreet Fixed Interest Russell Investments NZ Fixed Interest Westpac Active Income Strategies Trust

Returns are calculated to 30/09/20 Returns are calculated before tax after fees, except for the non-PIE categories, which are after tax and after fees.

For more information about this table and the methodology behind the data, contact helpdesk.nz@ morningstar.com or go to www.morningstar.com.au © 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. To the extent that any of this information constitutes advice, it is general advice and has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Limited (subsidiaries of Morningstar, Inc.) without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement (in respect of Australian products) or Investment Statement (in respect of New Zealand products) before making any decision to invest. Neither Morningstar, nor Morningstar’s subsidiaries, nor Morningstar’s employees can provide you with personalised financial advice. To obtain advice tailored to your particular circumstances, please contact a professional financial adviser. Please refer to our Financial Services Guide (FSG) for more information www.morningstar.com.au/fsg.asp

WWW.GOODRETURNS.CO.NZ | 33

Financial advice for the new normal Booster held its annual conference in Wellington earlier this month at Te Papa.

Here are some pics of the movers and shakers.

First row (left to right): Booster head of growth Dave Copson practices some of his Dad jokes on delegates.

Lifetime CEO Peter Cave accepts the Investment Award from Booster executive chairman Paul Foley.

Second row (left to right): Booster Marketing Manager Di Papadopoulos provides advisers tips on how to grow their businesses.

Mark and Kay O’Donnell, Deborah Turnbull. Former Reserve Bank governor Alan Bollard presents a key note speech.

34 | ASSET NOVEMBER 2020 Third row (left to right): Jon Turnbull and Paul Foley. Nadia Waihape, Nick Hay, Adam Stewart and Hunter Stewart.

TOP 10

As usual it has been a busy month on Good Returns. Here is a list of the top 10 most read stories over recent weeks.

01 KiwiSaver supermarkets – real competition for corner dairy schemes With two new platform-based schemes due for launch, David Boyle, Mint Asset Management head of sales and marketing, says KiwiSaver will finally enter the supermarket era – giving members the wider range of choice they deserve.

02 Westpac dropping adviser wing to Forsyth Barr Westpac in talks to sell its adviser wing to Forsyth Barr in a move that could signal the end of advice from the big Aussie banks.

03 AMP Kiwisaver members should expect a major fee reduction Chris Douglas of MyFiduciary has said that AMP KiwiSaver members who have seen their funds switch from active to passive should expect a major reduction in fees.

04 Hunter: KiwiSaver funds in global shares liable for tax slippage Hunter Investment Management have warned that investors, including some KiwiSaver funds could be losing out to tax slippage due to buying global shares through offshore unit trusts.

05 The Wrap: divorce for AMP Wealth Management and AMP Capital AMP Wealth Management's decision to move $10 billion of funds to a passive mandate in international hands leaves more questions than answers.

06 Asteron (and Suncorp) appoints new boss Suncorp, which includes Asteron Life, has promoted the head of claims to the role of chief executive.

07 InvestNow launch KiwiSaver scheme Investing platform InvestNow have announced they will enter the KiwiSaver space with a large multi-fund offering.

08 FMA tells online investors to do their homework The Financial Markets Authority has told hundreds of thousands of new Kiwi investors they need to “do their homework” and understand the risks of investing in financial markets.

09 AIA rolls out new claims management service The country's biggest life insurer, AIA, is launching a new service to help disability policyholders at claims time.

10 Trusted Adviser mark finally launched The mark is awarded to Financial Advice NZ members who show they have committed to qualifications and continuing professional development obligations at a level higher than that required by New Zealand law and code.

Keep up with the news at

GOODRETURNS.CO.NZ

WWW.GOODRETURNS.CO.NZ | 35

UK PENSION TRANSFER Transfer with

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0,0 0 0

$

4,7 8 1

$

9,5 6 2

$

9,5 6 2

(and we do currency at wholesale rates) Keep your client and charge your usual ongoing advice fees

* Fees shown are the maximum New Zealand transfer fees payable for a £100,000 transfer (exchange rate as at 9 July 2020). Actual fees paid may be less. Defined contribution schemes only. For more information see NZ Funds’ website www.nzfunds.co.nz

T. 09 377 2277 | E. ukpension@nzfunds.co.nz | W. www.nzfunds.co.nz