AUGUST 2017
CIAL SPE E ENC R E F CON 2017 E U ISS
THE VALUE OF
FINANCIAL ADVICE BROUGHT TO YOU BY GOLD SPONSOR:
NATIONAL ADVISERS CONFERENCE 2017
Making money from roboadvice
Financial Advice NZ goes live
Staying compliant on social media
LEAD STORY
UP FRONT 04 EDITORIAL
FOCUS ON
VALUE
The value of advice is clear
06 PEOPLE New appointments
07 GOOD RETURNS TV Angus Dale-Jones discusses his next big project
08 NEWS
NATIONAL ADVISERS CONFERENCE 2017
12 ANZ's Craig Mulholland on helping New Zealanders.
REGULARS
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{OPEN TO QUESTION}
{ INVESTMENT }
{ INSURANCE }
{ ASSET ADVISER }
05 Are you pleased with the establishment of Financial Advice NZ?
20 Absolute-returninvestors’ time is coming
30 Embrace the roboadvice future, with you in charge
22 All systems go for Financial Advice New Zealand 28 Staying compliant: social media 03
UP FRONT
{ FROM THE EDITOR }
ADVICE VALUE
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t was at this year’s adviser conference that someone said: The value of advice has never been clearer. More New Zealanders have increasing amounts of money in KiwiSaver and the slowdown in the property market may start to prove to some that residential property is not always a one-way bet as an investment. With interest rates still too low to live on for most people, putting money in the bank is no longer a viable prospect. Advisers are needed to help New Zealanders plan to ensure that they have enough money to achieve all of their life’s goals. Independent advisers are needed even more, to make sure that there is an option for people who do not merely want to be sold the products of one provider. But somehow, the industry has to start to get more clients to engage with them – and not turn to cheaper (or free) online or big provider options. In many cases, this may be as simple as making it clear what is on offer and how an adviser can really help. If you start to focus on driving home to your clients what you have
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done for them that they could not have done for themselves, or that their bank might not have bothered to, they will take notice and tell their friends. But it is not the time to be too humble. The industry is going through a significant transformation, not only with the Financial Services Legislation Amendment Bill but with the work under way to set up Financial Advice New Zealand It is to be hoped that the FSLAB reforms help to boost consumer confidence in the advice sector, and make it easier for advisers to explain to clients what they can do for them. Financial Advice NZ is also promising to play a role to help boost consumer awareness of advice services. Both of these moves should help. Then it will be up to advisers to make the most of the opportunity. Many at this year’s conference pointed to the importance of relationships. It will no longer be enough to be great at managing money or finding the right insurance contract – you’ll also need to be a master relationship builder with the skills to sustain it over decades and to know what clients want, even before they realise it themselves. Most advisers are strong people people, anyway, so they will be a step ahead of the competition. Let’s hope that, at next year’s conference, the industry no longer has to talk about how to prove the value of advice, but instead can discuss the next steps needed to cement the bright future of the industry. Susan Edmunds Editor As you probably already know the PAA has decided to to continue to provide ASSET Magazine to its members as a tangible member benefit. There was no consultation about this decision and we are currently working through our distribution plans for the magazine. In the meantime we are sending you the latest issue as it has extensive coverage of the National Adviser Conference, put on by the PAA and the Institute of Financial Advisers. If you have any queries please email philip@goodreturns.co.nz
HEAD OFFICE 1448A Hinemoa Street, Rotorua PO Box 2011, Rotorua P: 07 349 1920 F: 07 349 1926 E: editor@tarawera.co.nz PUBLISHER Philip Macalister EDITOR Susan Edmunds CONTRIBUTORS Russell Hutchinson, Barry Read, Michael Warrington and Andrew Lendnal DESIGN Jonathan Harding ADVERTISING SALES Kelly Thorpe kelly@tarawera.co.nz phone 07-3491920 SUBSCRIPTIONS Dianne Gordon P: 0800 345 675 E: dianne@tarawera.co.nz ASSET is published by Tarawera Publishing Ltd (TPL). TPL also publishes online money management magazine Good Returns www.goodreturns.co.nz and TMM – The Mortgage Mag All contents of ASSET magazine are copyright Tarawera Publishing Ltd. Any reproduction without prior written permission is strictly prohibited. ISSN 1175-9585
OPEN TO QUESTION
Are you pleased with the establishment of Financial Advice NZ?
CAREY CHURCH MONEYWORKS
Very pleased, and impressed. When it was first mooted, I thought 'yeah right' there are too many egos in this industry - it will never happen. So incredibly impressed that Bruce and Michael (along with their teams) have managed to do it. I consider that this is the first sign that we might be able to become a profession, putting aside personal agendas for the greater good.
ANAND SRINIVASAN BRISK INSURANCE
Yes - it makes perfect sense to have a strong body representing mortgage, insurance and investment advisers under one association – Financial Advice NZ.
CARISSA FAIRBROTHER RIVAL WEALTH
I see having one voice in the market for suppliers, consumers and government a massive positive that has never existed. Providing education, support and awareness for professional financial advice in today’s world is vital.
WHAT DO YOU MOST HOPE THAT THE ASSOCIATION WILL ACHIEVE? To develop a more cohesive industry. The legal fraternity in our town have regular catchups over drinks, and I proposed it for the advisers here. Only one or two people were interested which was disappointing. While we are competitors, we also all work differently, there are many many clients for all of us, and we can really learn from each other. Yes, we have different personalities, but if I hadn't had the collegiality of other advisers in the first 10 years of developing our business, I wouldn't have half our systems and processes in place.
Promote with active campaigns nationwide the "value an independent adviser brings to Kiwis" be it related debt creation (mortgage), wealth creation (investment) or wealth protection (insurance).
That they get some cut through to all New Zealanders. Consumers should all know the value of seeking good advice and engaging the services of qualified and informed experts to achieve their financial success.
WHAT DO YOU THINK IS THE BIGGEST CHALLENGE IT FACES? Personal agendas and ego's, and possibly the uncertainty of some advisers role going forward under the new legislation - but that should hopefully help with the successful development of Financial Advice NZ.
Growing the membership from present levels to higher numbers and creating a strong brand image to raise the profile of independent advisers in the eyes of New Zealanders.
Managing the expectations of the different types of advisers that will make up the new association. Getting complete buy in to a one-size-fits-all body will be testing at times, but they are on the right track and just need to persevere.
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OPINION
Do not fear the robot, back yourself It's product providers' staff, not independent advisers, who should be worried. By Michael Warrington
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or the past couple of years, we financial advisers have been told to prepare for our own retirement, replaced by R2D2 and his descendants - if that's the correct term for an evolved robot. The government has been willing to pass legislation that allows "financial advice" presented by a non-natural person and the Financial Markets Authority (FMA) is clearly on board - witness their current intentions to accelerate the arrival of this service type. Presumably the FMA sees roboadvice reducing the annual expense of financial advice being provided to the public without compromising public confidence in financial markets. Well, I don’t fear being put out of business by a robot. In fact, I think this situation adds potential for independent financial advisers, not the opposite (not "independent" as defined in the code). The intention of robot use is to reduce cost (FMA tick), and perhaps gain consistency, which means that it will undoubtedly be used by financial organisations wishing to sell (oops, serve) more over a shorter period of time. Large financial organisations already have scale, and thus the potential to reduce fee structures, so, in my opinion, financial advice employees within the large financial organisations are the ones who should be listening out for beeping and whirring noises in the office. The other financial advisers who should be watching the horizon are those operating in a model of high fee impost on client returns. You may not see robots in your office but it seems very likely that you will see your client list decline as some of the public discover the roboadvice doorway presented by the large financial organisations. Tomorrow’s clients will seek the same
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Tomorrow’s clients will seek the same from us as yesterday’s clients - competent service at a fair price. I’ll wager that the majority of them will prefer to interact with a human than a robot. from us as yesterday’s clients - competent service at a fair price. I’ll wager that the majority of them will prefer to interact with a human than a robot. My children think they know everything, they use smartphones and laptops to discover what they don’t know but they still come into the kitchen and ask: "What do you think Mum/Dad?" (the financial advice piece). Rather than expecting our playing field to shrink I believe it will expand.
KiwiSaver should see to this. As KiwiSaver members reach 65 years of age the ability to withdraw their capital presents an obvious opportunity for the financial advice community to revisit how these funds might be invested for the subsequent decades. The profile of NZ investors makes it clear that a reasonable proportion of KiwiSaver members will not wish to leave the funds within the managed environment. These people will need a financial adviser; some may want a robot but most will not. We will face the same competition then as we do now but we will be greeted by a larger pool of clients and a far larger pie (no pun intended) to serve. Money is one of life’s most emotional subjects and as a result a person with a surplus to invest will want their financial adviser to understand those emotions and to display some of their own during the decision-making process. Spock may well have been a very successful fund manager (Vulcan) but he would have made a terrible financial adviser. He would however have been better at it than a robot. So, back yourself. Do not fear the robot. Indeed, go and buy yourself a 1/32nd scale R2D2 to place on your desk. It will make you smile each day and will remind you of all the advantages that you can present to your clients. Michael Warrington is an adviser at Chris Lee & Partners
GOOD RETURNS TV
I had no idea that I was going to be the chairman. DID YOU HAVE ANY INPUT INTO THE MAKE-UP OF THE GROUP? None whatsoever. In fact, less than 24 hours before everybody heard, I was told who the others were!
DRIVING NEW CODE Good Returns TV sat down with Angus Dale-Jones, to talk about his next big project.
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ngus Dale-Jones, a consultant to the financial services industry, has been appointed the chairman of the working group that will create the new code of conduct for financial advisers. YOU OBVIOUSLY PUT YOUR HAND UP TO GET ON THE CODE WORKING GROUP? Yes. There was an application process and I was lucky enough to get the chairman role. DID YOU APPLY YOURSELF OR WERE YOU NOMINATED? I applied myself. WHY WERE YOU INTERESTED IN GETTING INVOLVED IN IT? It’s an industry that I’ve been closely related to for a while and it’s a continuation, if you like, of some of the work that I had done when I was at the Securities Commission (as it was then) and as a consultant since then. I feel passionately about this industry and I thought that this was a way that I could continue to help. WE’VE HAD THE CODE COMMITTEE, WHICH HAS PROVIDED A SET OF RULES FOR AFAS UP UNTIL NOW. THE NEXT STAGE WILL BE THIS CODE, WHICH WILL BE THE BIBLE FOR ADVISERS AND WHAT THEY HAVE TO ACT BY. IT’S GOING TO APPLY TO EVERYONE. HOW ENGAGED ARE RFAS IN THIS SPACE AT THE MOMENT? We’ve actually got two codes in parallel. There’s a transitional period, where the Code Committee and code that currently exists continues to apply. That applies to AFAs. RFAs, at the moment, if they want to think about how they practice, can still look to the
existing code to get some good ideas. The Code Working Group is a process to set up a new Code, and the difference will be that that new code will apply not just to AFAs, but to all financial advisers. SHOULD ALL THE PEOPLE OUTSIDE OF THE CODE AT THE MOMENT LOOK TO WHAT AFAS HAVE TO DO AS THE MINIMUM REQUIREMENT GOING FORWARD? I think it’s useful for them to use it as a starting point, to think about what Code standards look like. Some requirements of the code might not apply to them at all, but in terms of some "subject headings" to think about, it’s a good starting place. THERE’S BEEN A LOT OF CRITICISM ABOUT THE MAKE-UP OF THE COMMITTEE, IN THAT THERE’S NO PRACTICAL EXPERIENCE THERE, IN TERMS OF DAY-TO- DAY ADVISERS WHO MEET CLIENTS FACE-TO- FACE. WHAT’S YOUR ANSWER TO THAT? I think I’m probably the least relevant person to ask that question. I applied on the basis that it would be a committee chosen by the Minister, based on advice from MBIE, and that I would work with that committee. I’ve got to say, from a Chair point of view, I’ve got a team of really skilled people on the committee. Better than that, we’ve got to make sure in our consultation process that we’re fully engaged with the financial advice community. I understand completely that that’s different from having financial advisers on the committee, but judge us on our transparency and judge us on how engaged we are with financial advisers. DID YOU KNOW THAT YOU WERE GOING TO BE THE CHAIRMAN?
WHAT WAS YOUR INITIAL REACTION WHEN YOU SAW THE GROUP, AND THERE WEREN’T PRACTICING ADVISERS THERE? I didn’t have any expectations on who should be on the committee. What I like about the group is that it will help us tap into parts of financial services that the current code has not needed to think about. BUT WHEN YOU LOOK AT THE GROUP, THERE’S NOT A LOT OF PEOPLE INVOLVED IN THE MORTGAGE SPACE EITHER, FOR EXAMPLE. HOW ARE YOU GOING TO FILL THOSE HOLES? We need so much input through consultation. I can see that that is sidestepping your question. Remember, the working group is a catalyst, if you like. It is there to make sure that we ask the right questions in consultation and distill those questions. DON’T YOU HAVE A FUNDAMENTAL ISSUE IN THE FACT THAT WE’VE HAD SO MUCH CHANGE GOING ON AND PEOPLE ARE SICK OF CONSULTATION? AT SOME STAGE, AREN’T THEY GOING TO SAY THAT THEY JUST NEED TO GET ON AND RUN THEIR BUSINESSES? That’s why we need to look closely at the work that has been done over the last eight years. There’s been heaps of consultation on what a good set of standards for advisers looks like. That’s been done in the context of an occupational code for authorised financial advisers. Now, we broaden into what is a service code for the giving of financial advice. It applies to many more people - people in organisations, people who are using digital or digitallyassisted advice – and it’s stretching those contexts to this broader audience. It’s not so much drowning them in consultation as making sure that we are just the "thinking" of the code. ONE OF THE BIG DEBATES IS ON ADVICE VS PRODUCT VS SERVICE. HAVE YOU GOT ANY THOUGHTS ABOUT THAT? Our number one mantra is customer outcome. We’re now sitting in conduct legislation. In fact, the nexus between product and advice is a close nexus in many instances. It’s understanding how those work together to get a good customer outcome. That will drive how we shape the code.
To watch the full interview, download an audio podcast or to read the full transcript, visit goodreturns.co.nz/grtv
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UP FRONT
{ NEWS FROM NEW ZEALAND }
Milestone day for financial advice
Minister of Commerce and Consumer Affairs, Jacqui Dean Changes made to the Financial Services Legislation Amendment Bill before it was introduced to Parliament have been welcomed by the financial advice sector - but some say they did not go far enough. “It is a milestone day in terms of financial advice,” the Minister of Commerce and Consumer Affairs, Jacqui Dean, told delegates at the National Adviser Conference in Auckland this year, as she revealed that the bill had been presented for the first time. The Financial Services Legislation Amendment Bill is a package of changes to the regulation of financial advice following the review of the Financial Advisers Act. “The changes introduce an even playing field of conduct and competence duties across the industry, and remove the legislative barriers around advice.” She said the review of the Financial Advisers Act had been a comprehensive process and the bill would improve access to advice by enabling sensible advice conversations. “Advisers will be able to have conversations with their clients which are determined by the client’s wants and needs, rather than by arbitrary barriers imposed by regulation. “Removing the confusing advice classifications will mean advisers can focus on giving suitable advice, rather than wasting time figuring out what they can and can’t do.” The bill also introduces a more level playing field for advisers when it comes to determining the right level of knowledge, skills and competence. “The new regime focuses on the conduct and
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competence of all who provide financial advice,” she said. “This includes an industry-wide obligation to put the consumer’s interests first.” Dean told advisers the costs of implementing the changes would be kept down. “I want to assure you that any such costs will be justified and only imposed where there is a real benefit to consumers.” It is unlikely to pass this parliamentary term. A number of alterations were made from the exposure draft that was put out for consultation – most notably to remove the contentious “financial advice representative” category. This had been criticised as confusing and potentially misleading for customers who might not understand the difference between an independent financial adviser and a financial advice representative working for a financial advice provider and limited to a certain set of products. The bill replaces the FAR designation with “nominated representatives”, who have the same restrictions on the way they operate. QFE advisers will generally become nominated representatives and some larger financial advice groups may look to become FARs with representatives working for them. PAA chief executive Rod Severn had been highly critical of the FAR designation. He was pleased with the change. “It’s absolutely an improvement. 'Nominated representative' is still a bit of a nebulous term but it’s certainly better than financial advice representative, which was going to confuse everybody. “At the end of the day I don’t think it matters what people are called, how they act is the important piece. Provided the public understand the difference that nominated representatives can only give advice on one product versus financial advisers who can offer choice, we will all be better off for it.” IFA chief executive Fred Dodds agreed: “It’s better than financial advice representative. It will possibly mean consumers may ask ‘what does nominated mean’ which then will have some interesting responses. And as long as those responses talk to limitations we have made progress.” Lawyer and former FMA regulatory boss Sue Brown said it was a welcome move. “But I’ll be looking closely at the bill to see if there is a clear distinction in the requirements for sales and advice.” Brown said she had hoped that MBIE would move away from embedding financial advice rules into the Financial Markets Conduct Act so that financial advisers could understand their requirements without the need to take expensive advice or become overly reliant on lawyers. Industry commentator David Whyte said there was now no provision for nominated representatives to work for more than one financial advice provider. “How does this ‘ensure consumer shave access to the advice they need’ or avoid imposing ‘barriers to innovation’?” The client-first duty had also been criticised as unworkable because it originally said it applied to any situations where an adviser was aware of a conflict between the client and “any other person”. That has been amended to “associated parties”.
UP FRONT
Sovereign for sale but who will buy? A sale of Sovereign could be good news for customers and advisers, one industry commentator says. It was revealed this month that Commonwealth Bank of Australia is pondering the possible sale of its life insurance businesses in New Zealand and Australia. Russell Hutchinson, of Chatswood Consulting, said New Zealand had a number of Australian bank-owned insurance companies in the market. Those banks had been questioning the ownership of their wealth businesses, he said, and that often included insurance. “There have been well-publicised advice risk issues in Australia... generally they have been about the wealth businesses but some have been about insurance. Other times it’s about could we use this money better – the capital requirements of the bank rather than the performance of the individual unit.” He said the future of a significant number of insurance companies was up in the air. ANZ is also working through a process which could lead to the eventual sale of OnePath in this country. Sales were generally good for customers, Hutchinson said. “You get a seller with concerns about a business unit they may have issues and not want to invest but the buyer is usually motivated, has a plan and has ideas how they might do things better.” But he said the sale of Sovereign would be a “big deal” and it would require a buyer with significant resources. Former AIA boss David Whyte, who has experience on both sides of the Tasman, said while there would be waiting buyers in Australia, the options in New Zealand were not so obvious. “With the banks heading in the opposite direction, and other domestic life companies too small to be presenting a credible offer, it's hard to avoid a couple of conclusions - namely, any sale won't happen in the immediate future, and the buyer - if any - will be an overseas entity.”
Performance fees boost managers' income Performance fees have helped to lift the fee revenue claimed by fund managers Milford and Fisher Funds. Companies Office figures show Milford reported fee revenue of $46.5 million for the year to March. That is up 21% on the previous year. Of that, $35.1m was management fees and $11.4m performance fees. Milford has near $4 billion in retail funds, with more than $800m in its KiwiSaver funds. For the same period, Fisher had fee revenue of $69.1m, up 3%. That was made up of $60.8m in management fees and $3.3m in performance fees, which was a drop compared to the year before.
Managers struggle to find index to report against An exemption is being proposed for fund managers who are unable to find a compliant market index to use when they communicate to clients about how their funds have performed. The Financial Markets Conduct Act requires fund managers to include the return of a market index in their quarterly fund updates sent to investors, under the heading “how has the fund performed”. This allows investors to compare how their funds have performed, against the wider market. But the FMA said, in the transition period to the FMCA, some managers reported finding it hard to comply with that requirements because there was no suitable market index available. “Our preferred approach is to put in place a class exemption that would allow managers to use a peer group for part or all of a benchmark if they decide there is no available broad-based market index compliant with the FMC regulations," the FMA said.
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UP FRONT
{ NEWS FROM AUSTRALIA }
CBA in AML breach Advisers should take ethical lead Commonwealth Bank executives are losing their bonuses over 53,000 alleged anti-money laundering breaches. CBA said its board still had full confidence in chief executive Ian Narev but that bonuses would be cut to zero to demonstrate collective accountability for what it put down to an IT error. The bank said non-executive director fees would also be cut, by 20 per cent, in the current financial year. AUSTRAC alleges CBA failed to provide on-time reports of 53,506 cash transactions of A$10,000 or more and totalling A$625 million that were made through the bank's new Intelligent Deposit Machines (IDMs) from November 2012 to September 2015. CBA said a coding error, which occurred following a software update to its IDMs in late 2012, was responsible for the required Threshold Transaction Reports (TTRs) not being generated.
Australian Ethical Investment chief executive Philip Vernon said more needed to be done to educate customers on their ethical investing options. Vernon said planners had been a key driver of flows into ethical investments. Australian Ethical has almost 1000 advisers from more than 200 dealer groups supporting its products, which equated to over 8 per cent of the financial planning marketplace. But Vernon said investors were not as engaged with what their money was invested in as they could be. He said advisers could play a role in the next phase of growth in ethical investing, helping customers choose a fund that aligned with their values. Responsible Investment Association Australasia chief executive Simon O’Connor said the growth of ethical investing had been reflected in the group’s latest Responsible Benchmark Report, which showed an uptick in positive ethical screening among fund managers.
NOW IS THE TIME! If you are thinking of buying, selling or improving your practice, the middle of winter is the best time to take action.
PlanPlus merges with FinaMetrica Canadian investment and financial planning software company PlanPlus has merged with Australia’s financial risk profiling firm FinaMetrica, to become PlanPlus Global. The PlanPlus and FinaMetrica brands will continue to offer their products separately. The two companies say the merger means that PlanPlus Global can now offer an integrated solution — around evidencebased investment suitability — to banks, investment managers and financial advice enterprises that want to build robust, defensible planning and advice applications that can be scaled globally. PlanPlus founder and chief executive Shawn Brayman said: “We believe we are the first truly world class provider of professional advice solutions for enterprises and individual planners. Our products range from the world's most respected psychometric risk tolerance profiler to a goal-based robo adviser to comprehensive financial planning, all in several languages with more than 12,000 users in dozens of countries.” FinaMetrica co-founder Paul Resnik said: “Our products complement each other and we share a common commitment to delivering financial systems that prioritise client’s best interests. Meanwhile, we both have global businesses serving the corporate market and individual advisers. “The merger comes at just the right time for us to meet the market’s demands for an affordable, scalable and defensible advice solution that can be applied internationally across platforms, channels and borders.”
Mike Moore
021 974 231
Maree Porter
021 874 231
maree@mikemoore.co.nz
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ASSET UPDATA FRONT ADVISER
a new appointment email details { PEOPLE } Ifandyoua have picture to editor@goodreturns.co.nz
NEW BOSS FOR MORNINGSTAR
institutions, advisers, and individuals. I’m excited to build on the momentum we have created and will continue to grow the business while serving investors.”
SLATER TO RETURN TO DISPUTE RESOLUTION
Jamie Wickham Morningstar has appointed a new managing director for Australia and New Zealand. It has announced Jamie Wickham will replace Heather Brilliant, who has been in the role since 2014. She is leaving for a role at Colonial First State Global Asset Management/First State Investments, based in New York. Chris Galloway will continue to lead Morningstar's investment management business in Australia and the AsiaPacific region. Wickham is currently Morningstar's Asia-Pacific head of products and solutions. Morningstar said he had developed teams and processes that had significantly improved how Morningstar operated through Asia. Before that he spent four years leading the data business from the London office. “I am pleased to appoint Jamie Wickham as our incoming ANZ managing director. Jamie is well-qualified for this role with 20 years of experience with Morningstar and its predecessors’ ANZ business. His hands-on approach to solving our clients’ issues makes him ideal for this new leadership opportunity,” said Kunal Kapoor, Morningstar’s chief executive officer. “I would also like to thank Heather for her numerous contributions to our business over the years. She leaves Morningstar ANZ well positioned for its next phase of growth.” “I’m delighted to take the helm at Morningstar ANZ,” said Wickham. “There continues to be significant opportunities for our business in Australia and New Zealand, drawing on our established strengths in research, data, and technology solutions as well as investment management for
has been appointed brand ambassador for Hobson Wealth Partners. "We're excited to formally launch our new brand with a campaign that's surprising and unexpected within the context of our sector. Mahé felt like a natural partner for us because, through his continued dedication to achieving world class excellence, he embodies a number of the attributes we value most,” said Warren Couillault, managing director. “Mahé knows when to push himself to the absolute limit of what’s possible in rowing, and he also knows when to sit back and review his options. He’s experienced phenomenal success, coupled with a modest amount of failure. And through it all, he has consistently performed at the highest level in his chosen pursuits. “It’s that unparalleled level of highperforming, sustained success that prompted the partnership between us. And in the same way that Mahé is empowered and encouraged to succeed by the team that stands behind him, we’re also committed to helping our clients achieve their own investment goals.”
BDM FOR BNP Trevor Slater Trevor Slater is leaving IDS to take up a new role with one of the disputes resolution providers. Slater has accepted a new role with Fairway Resolutions as a resolution and Mediation Practitioner. This is Slater's area of expertise; previously he worked for FSCL. Slater has been working with IDS over the past 15 months and has helped the company develop its national account management processes as well as improving its resolution and complaint support services. "We thank Trevor for his help and expertise over this period and wish him great success in his new role," IDS principal Barry Read said. Slater said he was excited to be returning to dispute resolution. "I am and have been for some time, very impressed with the philosophy and focus of Fairway Resolution of working with the parties to find resolution through negotiation. in my view that's the role of a dispute resolution scheme - helping parties in dispute to move forward."
HOBSON WEALTH APPOINTS BRAND AMBASSADOR
Olympic gold medallist Mahe Drysdale
BNP Paribas Asset Management has hired Toby Coleman as senior business development manager within its Institutional Business team. Coleman is Sydney-based and focussed on relationships with superannuation funds, government and financial institutions, insurance companies and asset consultants. He started his career with Goldman Sachs Asset Management in London, before transferring to Australia in 2008. He was most recently a member of the Institutional Business team at Perpetual Limited.
NEW ADVISER WITH PLUS4
Plus4 Insurance Solutions, the national insurance advisory and financial services group, has added Lyndal Cruickshank Brunt, a registered financial adviser based in Queenstown. She began her financial services career in 1987 in the fire and general sector covering the Southland region. She subsequently moved into health insurance before establishing her own insurance brokerage in Queenstown in 2001. She has also worked in real estate and property management, runs a wedding and event catering and hire company with her husband, and is an accomplished artist.
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ASSET REGULATION PROFILE DATA ADVISER
HELPING KIWIS DO BETTER Product providers must do their bit to leave NZ better off, Craig Mulholland says.
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ASSET REGULATION PROFILE DATA ADVISER
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NZ’s managing director of wealth has a clear aim in his position at the bank: To help do what he can to achieve a more financially stable New Zealand. Craig Mulholland has been in the role since February, after five years as general counsel and company secretary. He now has responsibility for the bank’s wealth business in New Zealand. He said he hoped to be able to look back each year at the goals he had set for the business, and check off the list of achievements. “At retirement, I want to look back and think, given the privileged position I was in at the country’s largest bank, I really made a difference for the country,” he said. “I look at my parents. Yes, they are retired and mortgage-free but they have to live on the smell of an oily rag ... that’s no way to live your last 20 years.” Mulholland comes to the job after 25 years in legal and commercial roles across a range of industries, in New Zealand and overseas. He studied law and economics at Otago, then did an LLM at Canterbury and an MBA. “That was eight years of university. After that, it was confronting to say ‘what do I do?’” He took a job in funds management law, figuring it would be possible to go from a specialisation to a more general role further down the track, should he want to. From there, a role with Telecom gave way to a position with AAPT in Australia before he returned to take up a general counsel role with Telecom. The opportunity to take the ANZ wealth role was “years in the making”, he said. “It’s helping people retire, helping them to achieve their goals. It’s a very positive industry.” But he said there were significant challenges ahead. “There is a lack of financial literacy in this country, compared to others.” That put the onus on advisers and the wider industry to make sure customers were served well, he said. “There’s an obligation to assist them even when they aren’t sure of what they are doing.” He said a good way to improve the outlook would be to start young, with a more co-ordinated and broader approach through schools. “Advisers can do the work one-on-one and identify the needs of the customers but I think we need to take a step back and start in schools... If we start in schools now, in 40 years’ time there will be a very literate group about to retire,” he said.
“If you look at Baby Boomers now, there is a lack of financial literacy. Yes, they were able to buy houses cheaply. But they’re getting to 65, expecting to live to 90 and it’s not fair to turn to the government. Life expectancy is increasing but we can’t expect that NZ Super will keep on increasing to match it. Long gone are the days when if you had a freehold house, you could live comfortably on super.” A good start would be for everyone to increase their KiwiSaver contribution rate, he said. “We’ve got to focus on getting people into KiwiSaver and making sure they are contributing enough. But when there are low wage rises and a high cost of living, some people just can’t afford to increase their contributions and a large number of people aren’t contributing at all.”
Lots is going to change over the next four to five years and there will be huge volatility. There are questions about whether we are near the end of the business cycle. What is going to change, what will impact customers. There will be a need for good quality advice. Too many people were withdrawing their KiwiSaver accounts on the basis of hardship, he said. More than 1500 KiwiSaver members withdrew their money, citing hardship, in June. “Maybe WINZ should step in as the first port of call rather than people dipping into KiwiSaver, because the government is going to have to chip in at some stage, whether it’s not to help people get on top of their debts, or later at retirement.” He said the next question would be whether KiwiSaver should be made compulsory. “I’ve worked in Australia and have seen the benefits of compulsory
superannuation. That opened my eyes.” KiwiSaver has helped the fund management industry enormously, he said. “KiwiSaver breathed new life into the industry and it’s gone from strength to strength. That’s in 10 years.” Australia was in an even better position after 25, he said. Advisers had a key role in the industry, he said, and that would grow as KiwiSaver balance became bigger. As customers became more aware of their accounts they would start having more engaged conversations with banks and advisers. Banks had a lot of opportunities to build that engagement, he said, and could look at how to educate the customer base at touch points such as when they applied for a home loan or a credit card. “That’s a prime opportunity to have the conversation. What are the customer’s needs?” The upcoming legislative changes could mean a loss of some of those advisers currently practising, he said. Product providers would have a role to help navigate the change. “How do we negotiate that? As an industry, one answer is that there is lots we can do to leverage scale. There’s no reason why we can’t share the benefits of our thinking, research and insights to help them migrate towards that transition prepared. We have more time and resources to think about it than individual advisers do.” He said if it was possible to do more to give greater consistency across the market in how advisers educated themselves and transitioned to the new rules, that would benefit everyone. “Lots is going to change over the next four to five years and there will be huge volatility. There are questions about whether we are near the end of the business cycle. What is going to change, what will impact customers. There will be a need for good quality advice. If there is a market correction there will be a flight to quality. You don’t need to be market-leading every day. If you have a conservative investment strategy that delivers good returns to customers through business cycles, that’s most critical. We need to ensure people are thinking long-term. We need to educate people so they’re not flitting between investments. Doing that, you’re only losing money. The average Kiwi needs to learn the importance of adopting a strategy and investing in that and being there for the longer term.” Outside of work, he spends time with his four sons, aged between nine and 13. “I spend most of my time driving them around sports events and social events. They do four sports each, one five, even though we say two each. From Friday through Sunday from 6am until 6pm, I am on the sidelines, and I love it.” Mulholland said his children were a key motivator for his work. “I don’t want them to face the challenges I faced, with big mortgages, lots of debt and a struggle to get on the first rung [of the property ladder]. I want to help them and in turn have them make a difference for others.”
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This year’s IFA and PAA adviser conference focused on getting advisers to consider what they have to offer. KNOW YOUR WORTH
Financial advice has never been more valuable, says financial planner and commentator Carl Richards. He addressed delegates at the conference, to discuss where advisers could add value in the changing industry and how they could grow their businesses and better serve clients. The advent of roboadvice platforms and automated offerings was making obvious what was not important for advisers to do, he said. “It’s never been more clear what it is. All the stuff that is not what it means to be an adviser is being stripped away really quick.” But advisers should not worry – what they would be left with would be a better proposition for them and their clients, he said. “It’s a better job anyway, than when it was ‘have a hunch, buy a hunch, sell it to people’.” But too many advisers spent too much time talking about how products had performed, whether that was an insurance product, mortgage or investment. “I’m suggesting to you that we start shifting a little bit of that time. I’m not saying performance reporting isn’t important. I’m just saying it’s not nearly as important as progress towards a goal. Clients don’t care about your solutions at all,
Carl Richards they care about their problem. Until you take the time to understand their problems it’s just a rotating gerbil wheel of clients.” He said how well clients would rate their advisers’ performance would dpeend on how well they understood their problems. “If I came to you as an adviser and I never outperformed the index but I met every one of your goals are you going to be happy? Yes. If I use an adviser and they outperform the index every quarter, is it possible that I still won’t meet my goals? Sure. Would I be happy if I got positive performance reports every quarter for 20 years and didn’t meet my goals? No. The focus needs to be where it should be – solving people’s problems. Anything that can fit an algorithm will.” He said advisers needed to realise their job was to be “more human” to standout from robo offerings. “What I’m suggesting to you is that your job is actually this awesome job, what people want is for you to take them [to their goals]. The more I tell people they can
do it on their own, the more they want my help. What they really want is to know it’s taken care of. People just want you to take away the problem.” He said advisers could help their clients sift through the overwhelming amount of information about finances and try to make sense of it. He suggested keeping in touch by sending out a regular email highlighting intersting, useful articles. Advisers should be confident about what they had to offer clients, he said. Those who took the trouble to come to an adviser’s office already had faith in what they were doing. He asked advisers to imagine someone going to a surgeon who needed brain surgery. “If the first half hour of the meeting is telling you about their credentials, where they went to school, how many surgeries they’ve done... how wouldthat make you feel?” He said advisers should have professional confidence and convey to their clients that they knew what they were doing.
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s the advice profession moves from commission-based payments to fee-based structures, what advisers earn will become more transparent to clients, delegates were told. But David Haintz, of Global Adviser Alpha, told this year’s conference cost was only an issue where there was an absence of value. If advisers could demonstrate and articulate the value they added for clients, they should not encounter any problems with more upfront remuneration. He said advisers who were stock-pickers would struggle to add value because someone else could often do it better, or cheaper. But if advisers could move the conversation from products to people, that would help them to make clearer what they offered. “If someone comes to you and says they have $100,000 to invest, unless you move
the conversation from the money you will end up with that client for the next five, 10 or 15 years just doing what they want – you have an opportunity to say ‘what are you trying to achieve?’” Advisers could get better value from their own businesses by outsourcing as much as they could, he said. “If you’re a CFP with a $250-an-hour chargeout rate, you don’t want to be typing letters and making coffee.” Roboadvice solutions could be part of the answer, he said. Many people around the world did not understand what they were paying for their investments, Haintz said. “When you move from commission to a fee, the fee becomes more obvious. But the challenge is only in your heads,” he said. “There are two types of value – tangible and intangible. If you’re charging an explicit fee, people will say what do you do for
that money.” To answer that question, advisers should continually demonstrate what they had done for clients, he said. “Every time you recommend somebody does something, explain in dollar terms what you’re doing for them. You can’t just say your home loan at the moment is 5.5% and I can get you 4.5%, put it in dollar terms. And don’t just say I’ve saved you $2000 over the next 12 months. That was a 25-year term. Tell them I’ve saved you $40,000.” To show intangible value, advisers should ask clients how they felt, he said. If someone had completed an estate plan and paid a couple of thousand dollars for that, but had peace of mind that their money would go where it should, advisers could ask them how they felt to have it sorted. “Don’t let that opportunity go, take every opportunity to deliver and demonstrate value,” Haintz said.
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Dr Philip M. Randall
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dvisers were told that they needed to start thinking less about delivering financial outcomes for their clients, and instead start focusing on meeting their needs – even those that they had not yet been expressed. Dr Philip M. Randall addressed delegates at two separate sessions at this year’s conference. Randall is a founding member and adjunct fellow at the Institute of LifeSpan Development and Gerontology at the University of Akron in Ohio. He has delivered retirement education programmes to more than 50,000 employees at corporations and universities and is recognised internationally for his work in retirement planning. He told advisers that things were changing for them – although their businesses had traditionally been heavily focused on the investment, risk insurance, mortgage or financial planning advice they were giving, that would not be what would carry them into the future. He said advisers needed to rethink what they offered clients. Instead of promising better products, or to beat others’ returns, they should explore how they could deepen
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The basic law of human interaction is the more you know about me, the more responsible for me you become. - Dr Philip M. Randall their relationships with clients to more fully meet their needs, he said. Randall told advisers their relationships would be the most important source of opportunities – and the more trust they could build with their clients, the better they would do.
In some cases, that would mean opening up about themselves in a way they had not previously, and which could make some uncomfortable, he said. “The basic law of human interaction is the more you know about me, the more responsible for me you become. The opportunity in relationship construction as an adviser is, rather than you trying to get [the clients] to do all the talking, it might be worthwhile that you do some talking about who you are.” He said the population was changing, and what they needed was changing with it. Products were also going through a transformation, he said. But the good advisers who could offer value to their clients would differentiate themselves through their relationships, built on trust. “The group that can meet unexpressed needs is the group that will differentiate themselves, with such a level of trust and intimacy in their client relationships that they know what clients want before they even say it.” Managing clients’ emotions and expectations would be an increasingly big part of advisers’ jobs in future, he said.
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GROWTH COMES WITH COMPLIANCE Opportunities and growth come through compliance so advisers should embrace their requirements to prepare for the future, the National Advisers Conference compliance clinic revealed.
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ll too often the intricacies of compliance can seem daunting, onerous or mystifying – but, in fact, fulfilling compliance obligations adds value to the service offered by advisers. That was the key message to emerge from the conference’s compliance health check clinic, which offered up a range of experts covering topics like legislative obligations, advice processes, CPD pathways, and disputes resolution. One of the speakers, Financial Markets Authority (FMA) principal consultant Derek Grantham, summed this overriding theme up. He said good compliance is good business and is also necessary to effectively prepare for the new regulatory regime. While Grantham focused on upcoming legislative changes, he said the advice market was going to change anyway and that meant it was worthwhile for advisers to take stock in order to grow. They should think about whether their services are compliant and meeting their clients’ needs and they should think about their state of readiness for the new regime, he said. Having done that, advisers should make some choices – starting with choosing to be effective by listening to key messages from the compliance clinic. Adviser should also choose to take notice of changes; to be the solution to clients’ need for good advice; to showcase they are putting clients at the heart of their business; and to make a contribution to shape their own future. “Use the time available to you wisely: think and plan now,” Grantham said. “Make a commitment to take on board something from this clinic to implement and then do it.” To this end, the clinic – which worked its way through an array of disparate compliance considerations on a month-by-month basis - offered up a wealth of information for advisers to take on board. In many of the areas covered, the important of planning, reviewing documents and processes and adapting to any changes emerged as critical to successful compliance as well as to service growth.
It is a chance for an adviser to take advantages of changes to the code and that’s a chance for them to improve their business. - David Ireland For example, in the section on code standards 7 to 10, Kensington Swan partner David Ireland said that updating to current code requirements offered opportunities “It is a chance for an adviser to take
advantages of changes to the code and that’s a chance for them to improve their business.” Likewise, in the section on FMA monitoring visits, advisers were encouraged not to panic about such visits and to instead treat them as an opportunity to learn. Not surprisingly, the section on CPD hours and plans had a particular focus on growth, with IFA learning and development manager Andrew Gunn urging advisers to look at CPD as an investment in themselves. When it comes to CPD, the most important thing is to actually have a plan, he said. “Identify areas of improvement and proposals for these improvements. Find out details of CPD courses and possibilities. And take into account any changes that you need to get up to speed on. “To do this you need to identify what your gap is and what you need to do to maintain your skills. And what will you be able to do once gap is closed.” Advisers were also told to keep documents like disclosure statements up-to-date; to ensure they use plain, easily understood language in the documentation they give to clients; to keep a record of their advice; and to set aside specific days in the year to deal with renewals and AML/ CFT reports.
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PLANNING FOR THE INEVITABLE
Mortality cannot be escaped and that’s why advisers who want to provide a comprehensive advice service to their clients should embrace estate planning, trustee experts say.
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round half of adult New Zealanders don’t have a will while only 25% have allotted enduring powers of attorney. Yet death comes to us all and planning what happens with an estate avoids the morass of confusion and competition that often arises after a person passes away. In a session at the National Advisers Conference 2017, trustee experts Bryan Ivamy and Aaron Hing, from Perpetual Guardian, said that advisers should be assisting clients with their plans for their estate. “It is about planning for the inevitable and for the ‘what if’ scenarios – and having consideration for the security, access and distribution of family wealth,” Hing said. To that end, advisers need to help their clients establish what arrangements they want to place for their assets. They also need to make their clients aware of what could happen if something goes wrong and there are no mechanisms in place. Ivamy said that if advisers don’t provide help with estate planning there are gaps in their service and they are not providing a total advice service to their clients. Further, not providing guidance on estate planning could mean they are exposing their
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It is all about the client establishing what they want to achieve and obtaining the appropriate advice. - Aaron Hing clients to potential risk. “You also run the risk of losing a client to someone who can provide a full suite of services,” he said. “Advisers need to actively partner with others relevant professionals, like accountants and insurers, on this. “They should plan for the client rather than plan for the portfolio. They should also ensure
their planning enables the client to meet their goals and objectives. “It is all about the client establishing what they want to achieve and obtaining the appropriate advice.” Hing agreed that estate planning is very customer-centric and that advisers should aim to ensure the wishes of the client are met. Good estate planning means good foundations are put in place to ensure the benefits of the assets in question are obtained and used by those they are intended to benefit, he said. “Wills, enduring powers of attorney, Trusts – they all reduce costs, minimise complexities, and mitigate challenges.” When planning it is a good idea to look at generational succession and to get the next generation involved too, Hing said. “It is about having these concerns. It is about talking to clients. It is about getting both the client and the next generation involved.” But remember that estate planning is only effective if assets sit in the correct ownership structure, he added. It was recommended that advisers should take all these issues into account, as well as considering their own risks and responsibilities.
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Perpetual Guardian’s Message To Advisers At National Conference.
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t’s fair to say that the presence of estate planning as a critical factor in the financial advice process is often overlooked. But our message to advisers at this year’s well-attended National Advisers Conference is that they are the glue that cements the relationship with their clients, and we – as Perpetual Guardian, the estate planning experts – are there to support and provide the reinforcement and ring-fencing of assets, ensuring that everything is structured and held together correctly. “Helping you put it all together” was our overarching message at the conference, which aligns with our vision of ‘right assets, right hands, right time’. Our presentation to advisers covered all sorts of issues, from how marriage affects estate planning to more topical matters, and the feedback we received from advisers was revealing. A top-of-mind topic is inheritance trusts, with our advice being not to leave anything directly to children but to a trust, to protect assets for the long term and prevent unintended consequences such as the involvement of interlopers who were not intended to inherit. These conversations can be difficult within families and can require some courage, and our purpose is to help the family adviser sit down and have that discussion about their goals so estate planning is not a taboo subject but is as normal as discussing insurance. We conveyed in our conference presentation that it’s important, where possible, to have the whole family party to the conversation, not only so everyone is prepared but so the concept of estate planning is familiar to the next generation and the adviser has the opportunity to build relationships. We try to work with others so the client is at the centre of the wheel, with spokes running out to all advisers – us, their financial adviser, lawyer and so on. The feedback we received from advisers attending the conference – about 580 altogether – was positive. We conducted a survey, and 60% of attendees told us estate planning was part of their process, 96% said it would benefit their clients, and 45% had a preferred estate planning partner. Advisers are aware of the need to offer the service as part of a complete advice process, but aren’t always sure how to get started, so our aim is to plug in as a complete support partner in that regard.
Bryan Ivamy, Senior Business Development Manager, Perpetual Guardian. I was able to see the two final speakers, Nigel Latta and Ngahi Bidois, and what struck me was how both talked about the value of relationships and of knowing your client, with technology just being a tool. Things have changed around the periphery over the past 25 years, but being there for your client is still at the centre of the advice process. Additionally, the theme of Financial
Advice New Zealand came through strongly for me, and it seems that the coming together of NZFAA, IFA, and PAA to form a single united adviser body with one voice is essential to putting the client first. To learn more about how Perpetual Guardian can support your advisory services, call the team on 0800 737 738 or visit www.perpetualguardian.co.nz.
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AWARDS RECOGNISE INDUSTRY'S FINEST People from the industry came from far and wide to attend August's National Advisers Conference held at the SkyCity Convention Centre. It was two days packed full of international and New Zealand keynote speakers, networking sessions and workshops and the big Awards Dinner.
IFA chief executive Fred Dodds get the awards night underway
Former president of the IFA Nigel Tate was recognised for his years of board involvement
David Bowie and Richie McCaw paintings were auctioned off for charity
Onny Faleafa, of Nido Insurance, was named insurance adviser of the year
Paul Sewell of Hawke's Bay was given an award in recognition of his work for the IFA and the profession
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Tracey Coxhead
New insurance adviser of the year award winner Anand Srinivasan
THE WINNERS ARE.. Industry stalwarts and newcomers were recognised with awards at this year’s joint IFA/PAA conference. The PAA handed out its excellence awards, designed to recognise the passion, pride, professionalism and general excellence in the financial advice industry. Insurance Adviser Of The Year was Onny Faleafa, of Nido Insurance. The PAA said Faleafa was recognised across the industry for helping his clients make smart financial decisions to protect and empower themselves. David Isaacs, of Isaacs Financial Planning, was investment adviser of the year. Mortgage adviser of the year was David Windler, of the Mortgage Supply Co. Last year’s judges’ excellence award winner Anand Srinivasan was this year named new insurance adviser of the year award. Cameron Marcroft was named new mortgage adviser of the year. Tracey Jones, of Thomson Jones Mortgages and Insurance was given the judges’ excellence award. The IFA made three chair awards and two key contribution awards, recognising volunteer service to the institute at a local or committee level. Lyn McMorran, chief executive of the Financial Services Federation, and former president of the IFA Nigel Tate were recognised for their years of board involvement, representing New Zealand at international Financial Planning Standards Board meetings and promoting financial advice. Paul Sewell of Hawkes Bay and Michael Courtney of Wellington were also given chair awards in recognition of their work for the IFA and the profession. The IFA gave its pro bono award to the Southland branch of the IFA for its work with the Citizens Advice Bureau. It also gave the award for an outstanding contribution to the financial advice profession to Philip Macalister, of Tarawera Publishing.
Tracey Jones, of Thomson Jones Mortgages and Insurance was given the judges’ excellence award
Tarawera Publishing's Philip Macalister received an award for outstanding contribution to the financial advice profession
Isaacs Financial Planning's David Issacs picked up his award for investment adviser of the year
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Absolute-return investors’ time is coming It’s a strategy that is less appealing in a hot market but managers say, to many, it just makes sense.
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irst: Try not to lose money. Second: Try to make some. To many investors, it sounds like common sense. But, as the basic principle of absolute-return investment, it is still considered an “alternative” way of investing client money. The market for absolute-return investing in New Zealand is still small. But managers say it may get a boost when markets eventually reach the end of their long run of strong returns. At the simplest level, absolute-return investing aims to provide a positive return for investors, regardless of the prevailing market conditions. While all investment funds want to beat
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what investors could get if they put their money in the bank, absolute-return funds aim to produce more consistently positive returns than other managers. When markets are doing well, absolutereturn investors continue to focus purely on creating positive returns for their clients and do not try to beat the market. But when markets are falling, absolutereturn investors still work to grow their clients’ funds, even if other managers can only focus on offering less negative returns than the market or each other. Absolute-return managers usually do this with a range of techniques, including shortselling or the use of derivatives and strategies that are more complex than those deployed by
traditional, long-only investors. “Whereas traditional managers might justifiably say they have done a good job if they are down 10 points when the market is done 20, and there’s nothing wrong with saying that, for an absolute-return investors minus 10 is minus 10, minus 20 is just a context, you’re still minus 10,” said Greg Peacocke, principal at absolute-returns investor New Zealand Assets Management (NZAM). He said his firm believed it was a fundamentally attractive way to manage money that sat well alongside more traditional approaches. Investors could use each strategy to complement the other, he said, as a way to provide some diversification. “With traditional investments in bonds
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or equities, the primary driver of return is the market. But with absolute-return investing, you are at the very least dampening that driver.” NZAM offers a Kapstream Absolute Return Income Fund that is designed to generate consistent income while preserving capital. It targets a net return of cash plus 2% to 3% and invests predominantly in investmentgrade bonds. Its most recent report shows an annualised return of 4.84%, and 3.87% over three years. Andy Morris, another of the NZAM principals, said there were a lot of investors who were exposed to interest rate risk through their bond investments, or were struggling to get returns from money in the bank. The fund was a good option for those who wanted fixed interest investments or a better rate of return from cash but did not want long-dated funds, he said. The fund offers daily liquidity. Peacocke said there was a cyclical component at play and absolute-return investors would outperform when markets were struggling. Demand would tend to follow performance, he said, so if the markets hit a weaker patch and absolute-return fund managers started to look appealing in comparison, more investors might look to move their money. He said with a long period of quantitative easing (QE) and flows into passive there had not been demand over recent years. “If you believe as we do that QE and zero and negative interest rates that have sent asset prices higher are... in the process of reversing that does two things; it makes it harder for asset prices to keep going up and creates opportunities for absolute-returns mangers.” Matthew Goodson, of Salt Funds, said the New Zealand market had been immature compared to others around the world. “Alternative investment in NZ has tended to be concentrated in private equity. For whatever reasons, the long/short space has been very undeveloped here compared to overseas.”
What research tends to show is, depending on the starting point… returns are similar over a lifetime. But the volatility of returns from a longshort strategy is significantly lower. - Matthew Goodson He said it was very difficult for an investor to make positive returns irrespective of the market environment unless they engaged in short-selling strategies to balance out long positions. “Otherwise, the correlation of long positions to the market makes it virtually impossible to escape the overall direction of the market.” He said his fund’s correlation to equity markets was zero, which was something it had sought to achieve to give investors a true alternative. Salt now has $250 million in the Salt Long Short Fund and it is now only open to existing investors. Both NZAM and Salt said long-term returns for absolute-returns managers should be similar to those using traditional strategies. “You would expect similar returns but with much less risk,” Peacocke said. “If you look at equities over the long term, they might make 3.5% or 4% above GDP. Over a long period of time there is going to be 30% or 40% declines as a matter of course and that’s part of the cocktail you get. “With absolute returns you get to the same place but the declines might be 10% or 15%, it becomes an easier hold for investors, rather than having to sit through the pain of a large decline. “The concept of ‘first try to avoid large losses and secondly try to make money’ seems like what all fund managers should be doing, to people off the street. Where it gets trickier is with people who’ve been exposed to fund management for a period of time and can’t get away from thinking in relative terms.”
Goodson said it had been well-documented that long-short funds had struggled in the United States to keep up with very strong longonly markets in recent years. “The point is that the strategy aims to deliver positive returns irrespective of what the market does, not correlation with long-only markets. It’s about diversification. We see good levels of interest from people seeking diversification away from long-only strategies. What research tends to show is, depending on the starting point… returns are similar over a lifetime between long-short and long-only but the volatility of returns from a long-short strategy is significantly lower.” Long-short funds look great if you choose a start point of say 2000 or 2008 but not so great if you chose say 2003 and 2009 instead – overall their returns are similar with far less volatility. NZAM now has $400 million in funds under management. Morningstar director of manager research ratings in Asia-Pacific Chris Douglas said it was difficult to run an equity-oriented absolute-return product. “It is a very noble-pursuit, but at the end of the day the only asset class that doesn't go down before inflation is cash. And, many investors can miss out on strong market performance as a result of a fund manager who is overly bearish on the world. That's not to say there aren't products out there with merit, but investors need to understand the biases and how they will fit into a diversified portfolio.”
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All systems go for
Financial Advice New Zealand
Professional bodies have given the nod to new association. By Susan Edmunds
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evelopment of Financial Advice New Zealand has ticked off its last hurdle and the establishment phase has begun. The working group tasked with bringing the new financial adviser association to life had been progressing through a 100-day plan. When that work was complete, the idea was taken to the Institute of Financial Advisers, Professional Advisers Association and NZ Financial Advisers Association for their sign-off. Each organisation last month voted unanimously to support the development of the new association, which it is hoped will provide a stronger voice for the industry to regulators, product providers and consumers. Their vote gave approval to establish and commence operations of Financial Advice New Zealand as an independent entity and use existing funds to do so. The association is yet to be incorporated but five people have been appointed to guide it through to its first annual general meeting, as the establishment board. The board will be responsible for getting Financial Advice New Zealand operating. This will include developing the operational infrastructure and building the framework for the new body to deliver on its objectives in advocacy, standards and promotion. PAA president Bruce Cortesi represents insurance advisers and IFA president Michael Dowling the investment advisers, carrying over from their roles on the working group. There were 40 applications for the remaining three roles. John Bolton, of Squirrel, has been appointed for the mortgage industry. Lawyer Sue Brown, formerly of the FMA and Kate Morrison, of the Commerce Commission, were announced at this year's conference as the other appointments. Cortesi said the first thing for the new board to do would be to meet to discuss and agree on a strategy to plan out how its goals would be delivered on. Dowling said a key step would be to incorporate the association as a legal entity. The constitution must first be ratified by the IFA, PAA and NZFAA boards, and the Financial Advice New Zealand establishment board. "We would like to have been incorporated now," he said. "The timeframe has gone out a bit already. We have to talk to advisers about how best to achieve the steps. We want to be meeting with the working group within a month, plotting out what it looks like. "We had to get to the point where we take a leap of faith, push the boat out and let it float on its own, and we are at that point now,” Dowling said. He said there was now a mandate for it to act as a separate entity and work would begin on arranging funding for it. While the eventual aim is for Financial Advice New Zealand to serve as one voice for all of the advice profession, Dowling said
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"We had to get to the point where we take a leap of faith, push the boat out and let it float on its own" - Michael Dowling
it would be premature to close down the IFA and PAA now. "There is too much happening to say 'shut the doors'. We have to say it's business as usual," he said. The existing organisations were needed as the industry worked through things such as
the development of the new code of conduct for advisers and the roboadvice exemption, he said. Discussions could be had about the future of the other organisations when the new association was at a level where everyone was satisified it could take over operations, he said. Decisions were yet to be made about how members would be recruited or what sort of fees they might pay. Dowling said that would be for the establishment board to determine - and in some cases it might want to rewrite the work of the working group. It had taken almost three years to get to this point in the development of the association, he said. “This outcome is very pleasing.” Cortesi it was time for the Financial Advice NZ establishment board to take hold of the reins. David Yates, general manager of NZFAA, said his association was pleased to have been invited to be part of the process. “We’re very excited about the possibility that Financial Advice NZ represents for the industry. The thing that’s encouraged me more than anything else is the obvious genuine desire to make this work for the whole industry.” Cortesi said the insights the group had picked up about the industry as it worked through the development phase had been beneficial. "As one of our last actions as a working group, we’d like to again take the opportunity to thank everyone who has participated in bringing Financial Advice New Zealand to life. Your involvement has been crucial in defining how our new association can best support advisers, advice and the New Zealand public."
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TECHNOLOGY
Making money from roboadvice It’s a long path to profitability for some new platforms. By Andrew Lendnal
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ecent political events around the globe have focused attention on how automation has transformed the manufacturing industry, leaving workers in many countries without jobs and fewer and fewer human beings involved in the chain of production. While the effects of automation may have hit manufacturing first, other industries, including financial services, are on the cusp of being transformed by similar technological forces. Few jobs seem as far removed from the factory floor as financial adviser, but roboadvice offers the potential for drastic changes in the way financial advice is produced and distributed. A roboadviser is an automated program that assesses a client’s financial situation and risk profile and uses an algorithm to recommend a
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course of action. Proponents claim that by using an automated system to determine the most appropriate investment strategy, roboadvice can remove human biases and unfair dealing created by the self-interest of advisers. Crucially, it is also scalable, meaning the tools can offer advice to customers who normally would not have access to financial advice due to a low level of investable assets. The race to reach these under-served investors and create a business model from roboadvice is driving innovation in the field from established financial services companies as well as start-ups from the fintech sector. The US is the most advanced roboadvice market as automated advice services have been available to 401(k) participants for nearly 20 years. Now that roboadvice is rising in popularity in the retail sector, dozens of
companies have entered the market with branded or white label products seeking to tap into the trend. The list includes global investment giants where roboadvice is just one element of an extensive product range, such as Vanguard and Charles Schwab, along with smaller companies focussed solely on a single roboadvice solution, such as Betterment and Blooom. Client assets at five leading US roboadvisers approximately doubled in 2016 to USD 70 billion. Evidence suggests that stand-alone roboadvisers face a difficult road to profitability. Customer acquisition costs are extremely high and many will struggle to maintain the growth necessary to fund those costs until they are recouped, which could take as long as a decade.
TECHNOLOGY
the value chain than stand-alone roboadvisers. Two of the most important drivers of the roboadvice market will be technology and regulation. From a technology perspective, automated tools are becoming more sophisticated in their analysis and forecasting capabilities. The most sophisticated tools are able to include assets of many different types in their calculations to create an overview of a client’s total wealth and develop an investment strategy that can help an individual meet their financial goals. These capabilities paired with the ease of use of well-designed customer interfaces and the operational efficiency of using algorithms to calculate asset allocation are the technological developments that have raised hopes for the potential of roboadvice to generate profits for financial services firms. The other major factor that will determine how roboadvice develops is regulation. Regulatory bodies in many countries are still deciding how they will deal with roboadvice. In the US, roboadvice would have likely been provided a boost by the Department of Labor rules on fiduciary duty. However, the Trump administration’s attitude towards regulation has called into question whether those rules will ever go into effect. A broader push to deregulate
In 2015 Morningstar equity analyst Michael Wong estimated that the break-even client asset level for roboadvisers was $16 billion to $40 billion, eight to 20 times the client asset level of leading roboadvisory firms at the time. Established and diversified investment companies and asset managers have the advantages of an existing customer base and a trusted household name as well as the ability to incorporate elements of roboadvice into a more traditional model of advice. This could allow them to grow their customer base to include investors with relatively small amounts to invest while maintaining the more profitable segment of high-net-worth investors who would not make decisions based solely on the advice of an online tool. Additionally, asset managers with a vertically integrated roboadviser that use their own proprietary products control more of
The race to reach these underserved investors and create a business model from roboadvice is driving innovation in the field from established financial services companies as well as start-ups from the fintech sector.
the industry could provide a catalyst for innovation for companies to develop new technologies and applications for automated financial advice. In the UK, the Financial Conduct Authority has set up a special automated advice unit to provide guidance to companies developing automated advice solutions. The UK and Australian governments have also agreed to lower regulatory barriers for roboadvice firms to operate in the two markets. From a regulatory perspective, New Zealand is still lagging many countries in allowing roboadvisers to enter the market, although things are changing. Earlier this year, revisions to the Financial Advisers Act changed a provision that allowed financial advice to be given only by a certified natural person. The changes are not scheduled to take effect until 2019 at the earliest and there are still questions as to the precise regulations under which roboadvisers will operate, but it clears the path for New Zealand investors to start using the new technology. This paves the way for the introduction of roboadvice offerings, although the rate of introduction and uptake may remain slow in New Zealand for some time. Recent research from KiwiWealth shows that fewer than 20% of New Zealanders have a financial adviser and a similar number have checked their retirement finances over the previous 12 months; a level of disengagement that might make adoption of new advice platforms slower than in countries where savers are more active in managing their wealth. The same report shows that people want a proven track record and a strong financial services reputation backing a roboadvice product before they will be willing to use it. In reality, the narrative of roboadvice versus traditional financial advisers is too simplistic. The most successful investment companies of the future are likely to offer a hybrid model in which automated advice is supplemented by more traditional forms of advice, through phone support and face to face sessions with a trained adviser. The key will be to add value to the basic asset allocation offered by a roboadviser. We are at the dawn of the age of the robot in financial services, with technology and automation poised to transform the investment industry in many ways. However, evidence from early entrants in roboadvice show that automation presents an opportunity to better serve investors rather than a threat to established business. As advisers have always known, wealth management remains as much about behavioural factors and personal relationships as it does about returns, and roboadvice will not change that. These robots look more like Roombas than Terminators.
Andrew Lendnal is vice-president for business development at HelloWallet.
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ASSET REGULATION DATA ADVISER
Staying compliant:
SOCIAL MEDIA Watch what you say online, says Barry Read.
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he FMA and the Commerce Commission aren’t exactly known for keeping up with the trends. With the dramatic rise of social media over the past decade or so, this has created a problem for financial advisers trying to communicate with potential and existing clients without violating any advertising, solicitation, or other rules established by the regulators. I often see Tweets, Linkedin articles and Facebook posts from financial advisers and wonder if they have considered the compliance risks associated with these activities. Let’s take a look at some important dos and don’ts for financial advissrs when using social media, such as Twitter, Facebook or LinkedIn.
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PLAYING BY THE RULES
The FMA and the Commerce Commission haven’t issued specific rules regarding the use of social media, but rather, have applied existing rules to the new media format. In order to clarify some of the resulting issues, the agencies have issued some notices designed to lay out guidelines that should be followed in order to remain in compliance and answer some key questions that arose. The relevant notices include: Commerce Commission: ➜ Unsubstantiated representations ➜ Claiming you are something you are not ➜ Comparative advertising ➜ Jargon exaggerations and puffery.
Financial Markets Authority: ➜ Financial adviser advertising. Financial advisers should reference these sources directly in order to get the most accurate and comprehensive information about what’s permitted and denied when it comes to advertising their practices. In addition to these guidelines, financial advisers should be sure to adhere to their own firm’s guidelines when it comes to the appropriate use of social media in their business, or implement a guide if they don’t have one. The Commerce Commission have a great section on how to develop a compliance program if you don’t know where to start.
REGULATION
So here are some simple tips to help you when you are thinking about advertising on social media.
PRETEND IT’S A CONFERENCE
Financial advisers using social media should refrain from providing specific advice, since it could violate the regulations governing their practice. Any advertising should be general in nature and any advice should be noted as generic and not personalised advice. As a general rule, financial advisers should pretend that they’re speaking to a room full of clients whenever making a post on social media, including posts directed at an individual person that’s publicly available to be seen. It may also be a good idea to include a general disclaimer on any social media postings indicating that the content shouldn’t be considered personalised advice.
Financial advisers using social media should refrain from providing specific advice, since it could violate the regulations governing their practice. - Barry Read
KEEP DETAILED RECORDS
Financial advisers must preserve certain records, for AFAs it is a period of at least seven years and they should be in an easily accessible location. This is especially important for ensuring that information you relied upon is available, such as research. In other words, financial advisers should keep detailed records of all social media posting and messages, regardless of their origin or device. Facebook postings made via a personal computer may be easy to remember, but Twitter messages posted via smartphones and automated messages related to business may also be included in the definition of business communications, making it important to record.
DON’T BE MISLEADING OR DECEPTIVE
You need to ensuring that your posts are not misleading or deceptive. The FMA have provided this guidance for mortgage brokers and KiwiSaver as an example; A mortgage advice advertisement that refers to KiwiSaver in such a way that it implies an adviser is authorised to provide personalised financial advice on KiwiSaver could be misleading for consumers. In some circumstances mortgage advisers may need to draw a client's attention to the first-home deposit facility within KiwiSaver and provide practical information about accessing the facility. However, advisers should take care in the use of statements and advertisements such as “come and talk to us about KiwiSaver” or “use your KiwiSaver to buy your first home”. A client might think that the mortgage adviser could provide them with personalised advice about the merits of using KiwiSaver funds to buy a house. Under the Act, as a general rule, only an AFA (or QFE adviser) should provide this kind of personalised advice.
In an advertisement for mortgage advice services, FMA would not expect KiwiSaver to be the prominent focus or a key feature of the advertised service. If an adviser is only providing a limited service rather than personalised advice on KiwiSaver we would expect this to be clear. A mortgage adviser should also be careful when drawing their client's attention to the first-home deposit facility other than in advertising. A recommendation to an individual to make use of the facility to buy a first home could amount to personalised advice on a Category 1 product.
advertised to the client’s friends? Financial regulators struggled with this question and the situation still remains a bit too ambiguous for comfort. When such testimonials aren’t solicited (e.g. appear on independent social media or review websites), they are generally okay by regulatory bodies. Financial advisers can sidestep the concerns surrounding these issues by avoiding paid advertisements on social media websites, such as Facebook, where those who have “liked” the page are displayed in the ads. It’s important to avoid influencing any third-party commentary by displaying social profiles or information on pages curated by the financial adviser and instead simply let them exist as-is.
THE BOTTOM LINE
It is easy to post a comment or article online and therefore it is just as easy to get tripped up. Articles provided to advisers from product providers or other sources are often claimed to be ‘compliant’ but that doesn’t always mean they are compliant for your advice business. Financial advisers should be aware of the many rules and regulations surrounding the use of social media in their practice. While social media is governed by the same rules as traditional media, the different ways that its disseminated and consumed makes it difficult to determine what’s right and wrong. Financial advisers can avoid some of these mistakes during their day to day operations. In addition to these guidelines, financial advisers should carefully read and consider the FMA and Commerce Commission and other guidelines. It’s also important to keep in mind your firm’s own rules and regulations governing social media use, which often goes above and beyond the regulatory requirements. If you don’t have a social media policy and procedure for ensuring compliance, then we definitely recommend spending some time on this. Barry Read runs Independent Development Solutions (IDS), specialising in helping advisers meet their compliance requirements.
DEFINING A TESTIMONIAL If a client “likes” a financial adviser’s Facebook page, does that constitute an official testimonial since that “like” is
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PRACTICE ASSET REGULATION DATA MANAGEMENT ADVISER
The robots will kill each other before they kill us Here's how to put that technology to work for you. By Russell Hutchinson.
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n my last excursion into roboadvice I outlined an optimistic future in which helpful robots enable you to automate many of the tedious tasks associated with building a comprehensive statement of advice. That’s still true, but since then we have the FMA's draft exemption for roboadvice, which has sparked another round of speculation: the "big end of town" is being favoured over smaller independent advisers and that in the medium-term, the robots are going to steal your job (again). That calls for another round of the type of article about robo that abounds online especially those in social media – that are illustrated with a picture of Terminator. This is followed by an estimate of how many jobs will
be lost to the coming tsunami of automation. That's a best case. Elon Musk is convinced that the biggest threat to humanity isn't so much global warming, but "the singularity", when robots become more intelligent than humans, and decide to get rid of their messy biological forebears. In spite of the much talked of "conversation" between two robots which scared the researchers because the ‘bots started talking in a language the humans do not understand – I think robot co-operation to the detriment of humanity will remain rare. More to the point, with insurance sales and advice, I am betting that the robots will kill off the dumber, earlier, versions of themselves before they get around to turning on you. The click-bait approach to roboadvice isn't
PRACTICE ASSET REGULATION DATA MANAGEMENT ADVISER
designed to help anyone, adviser or client, it is just meant to generate clicks, likes, and shares. But back in the real world, we have to create actual client engagement. A "like" is not a decision, a purchase, or a change in behaviour. Of course, robots are real, and they are trying to do this with real clients. To be clear, what they are trying to achieve is a full personalised advice recommendation without the need for a human adviser. Why? To save money, time, and improve convenience, so the client can buy at any moment of the day or night, online. This trend started in wealth management. You can try out some of these robots, and you should - the experience is instructive. Go to a site offering pension savings in the US. Choose the zip code (look up a hotel if you don't know one offhand) and get planning. The tool is primarily designed to answer two questions: How much should be saved to reach a retirement goal, and what's the risk tolerance so that a client may confidently choose a fund allocation. Some of the planning tools are smart, useful and work well. I know a bit about the difficulty of building good online services - and these are usually impressive, coming from very wellresourced companies. But take a second look. Look at what they don't do. First, they rarely tackle the question of whether or not to save. No one is asking the question about whether you'd be better off paying off your credit cards, home loan, or even spending the money on finishing your education like a full service financial adviser could. Second, they aren't asking questions about the format of investment - should you even use this vehicle. Third, they aren't trying to help you choose which company to use. On the contrary, they don't want you to think about that - you will only find passive reassurance that you arrived at the right site. A few wellpositioned awards, some testimonials. The only way this service works is by offering a laser like narrowing of scope. Globally there are loads of these services, but examine the ranks of insurtech offers and you will find they all operate similarly - a narrowly defined service, with the robot enhancing what is fundamentally a direct offer, now with advice added. Comparison is available, but not with advice. Globally comparison websites are typically about price, not about quality, or advice. In fact, Life Direct in New Zealand is unusually good - and still doesn't offer personalised financial advice. Choice and advice remain the preserve of humans.
"Once upon a time the insurance agent, because they were typically agents of just one company back then, collected the premium. A robot called the banking system, with sub-robots called automatic payments, later replaced by direct debits, has "stolen" that job. Do you want it back? Of course not." Why? Trade-offs are hard to handle. Juggling the choice to insure, the things needed to insure, the place of insurance within a context of your other resources (cash, sick leave, ACC, family), which benefits to buy, what options, from which insurer, and put all that through the budget limits common. That is a devil of a job. Most clients, still, need the help of another person, a specialist, to help them through it all. Those that don't, often wish they had. But just in case all those obstacles weren’t high enough, the FMA’s exemption has come along to help you out. The kind of roboadvice it envisages is definitely of the investment management
flavor. The limitations roughly sever most usable amounts of insurance from the exemption. It goes further, by limiting the volume permitted from the roboadvice channel. This was defined in terms of funds under management as well, to ensure we took the cue that this exemption was designed for the investment folks, not insurers. But even if the dynamics of insurance advice, and the plans of the FMA weren’t there to help protect you from roboadvice, you can take succor from a further thought: The robots will find it much easier to kill direct sales channels first. Designing a robot to beat a human is hard, the game of chess with its nicely defined rules is a doddle compared with the game of insurance advice. But designing a robot that can offer slightly better advice than a price comparison website is easy. It’s the logical place to start. So the first stop towards global robot domination is, robots that eat the lunch of other robots. Of course, you still need help. However, courtesy of the rising tide of development the job keeps getting harder. Life is more complicated, financial life especially so. Consumers are smarter, and getting savvier about financial matters. Of course, they are - not least because they have the time, the education, and ability, but because there is so much more information to help them learn. That's the other great thing about online resources. They will encounter the robots, but theirs will be nothing like as good as yours. Once upon a time the insurance agent, because they were typically agents of just one company back then, collected the premium. A robot called the banking system, with sub-robots called automatic payments, later replaced by direct debits, has "stolen" that job. Do you want it back? Of course not. Automation of the advice process will get another shove from the regulator. That recent section 25 request was hard for some advisers. If you had an excellent paper file it was moderately difficult. If that file had been destroyed in a recent earthquake it became impossible. If the file was on a good computer system - backed-up, duplicated, and easily accessible from multiple locations. It was easier. Better yet, if your accounts were also online. All helpful robots, making life easier for you. Embrace the roboadvice future, with you in charge. Russell Hutchinson is director of Chatswood Consulting and Quality Product Research, which operates Quotemonster.
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For more information call 0800 888 361 Latest 1 Yr 3 Yr 5 Yr Transaction Return Return Return Exit Price % New Zealand Insurance Fund Miscellaneous Booster KiwiSaver Capital Guaranteed 1.0845 2.18 2.64 -Booster KiwiSaver Options 1.249 0.78 7.31 -Fidelity Life Super-Sup Options -0.35 4.72 5.86 Kiwi Wealth KiwiSaver Scheme -2.24 3.37 3.50 CashPlus Fd NZ Funds KiwiSaver Growth Strategy 1.6253 6.72 6.89 11.47 NZ Funds KiwiSaver Income Strategy 1.3242 2.63 3.82 4.08 NZ Funds KiwiSaver Inflation Strategy 1.3329 -1.10 2.59 5.36 Westpac KiwiSaver-Capital Protect Plan 1 2.3398 11.22 11.88 14.56 Westpac KiwiSaver-Capital Protect Plan 2 2.1003 11.22 11.87 14.56 Westpac KiwiSaver-Capital Protect Plan 3 2.0136 11.21 11.87 14.56 Westpac KiwiSaver-Capital Protect Plan 4 2.0798 11.23 11.87 14.55 Westpac KiwiSaver-Capital Protect Plan 5 1.8083 11.23 11.88 -NZ Insurance Cash AMP KiwiSaver Cash Fund 1.4765 1.64 2.40 2.55 AMP NZRT Cash Fund 1.46952 0.63 1.38 1.53 AMP Prem PSS OnePath NZ Cash 1.57163 2.01 2.61 2.72 AMP PSS Select Cash 1.4813 1.82 2.40 2.49 ANZ Default KiwiSaver Scheme-Cash 1.4067 2.31 2.86 2.91 ANZ KiwiSaver-Cash 1.3112 2.33 2.92 2.93 Aon KiwiSaver ANZ Cash 15.1213 1.82 2.41 2.47 Aon KiwiSaver Nikko AM Cash 14.1403 2.21 2.81 2.99 ASB KiwiSaver Scheme's NZ Cash 1.4316 2.08 2.85 2.89 BNZ KiwiSaver Cash Fund 1.1352 2.54 2.78 -Booster KiwiSaver Enhanced Income 1.4878 1.79 2.61 2.83 Fidelity Life Super-Super Cash Portfolio 2.8344 0.83 1.36 1.50 Fisher TWO KiwiSaver Scheme-Presv 2835.63346 2.34 2.83 3.04 Kiwi Wealth KiwiSaver Scheme Cash Fund -2.74 3.22 -Mercer KiwiSaver Cash -2.09 2.82 2.93 NZ Defence Force KiwiSaver Cash -1.89 --OneAnswer KiwiSaver-Cash Fund 1.3608 2.18 2.78 2.80 SIL 60s + Sup Cash Fund 2.1722 2.10 2.49 2.43 Westpac KiwiSaver-Cash Fund 1.3721 2.28 2.87 2.91 NZ Insurance Equity Region Australasia AMP Prem PSS OnePath NZ Shares 2.22618 1.97 8.06 13.58 Booster KiwiSaver Socially Rsp Inv Gr 1.6794 8.21 9.58 9.87 Booster KiwiSaver Trans-Tasman Share 1.4344 6.92 7.49 7.23 OneAnswer KiwiSaver-Australasian Share 1.7871 2.55 12.18 16.68 NZ Insurance Equity Region Australia AMP KiwiSaver Australasian Shares 1.0777 7.15 --New Zealand Insurance Fund Equity Region NZ AMP Prem PSS ACI NZ Shares 2.51383 3.31 14.34 16.91 AMP Prem PSS ACI NZ Shares Index 2.25206 5.16 14.86 17.36 Fidelity Life NZ Shares Portfolio 6.4252 5.04 11.05 12.12 Fidelity Life Super-Super NZ Share -5.34 10.92 12.04 SIL 60s + Sup NZ Share Fund 5.6161 3.73 12.18 16.51 New Zealand Insurance Fund Equity Region World AMP KiwiSaver International Shares 1.1616 15.15 --AMP KiwiSaver Passive International 1.1564 14.60 --AMP Prem PSS ACI Global Shares Index 1.97891 9.74 10.14 12.69 AMP Prem PSS ACI Global Shares 2.28481 19.96 8.95 14.43 Index Hdg AMP Prem PSS FD Intl Share Fund 1 Value 1.22182 9.44 7.95 11.81 AMP Prem PSS FD Intl Share Fund 1.37076 11.43 11.24 12.77 3 Growth Booster KiwiSaver International Share 1.8378 13.80 10.15 12.89 FANZ Lifestages KiwiSaver High Growth 1.12602 ---Fidelity Life Aggressive 3.4957 6.16 8.88 10.33 Fidelity Life International 2.4412 11.87 7.14 10.14 Fidelity Life Super-Sup Intl -13.15 8.15 10.77 Fidelity Life Super-Super Aggressive -7.69 10.05 11.04 Fisher FuturePlan - Intl Coms 3.00002 12.22 5.29 9.85 Fisher TWO KiwiSaver Scheme-Eq 4208.59938 9.04 8.81 12.07 Mercer KiwiSaver Shares -12.37 --NZ Defence Force KiwiSaver Shares -12.17 --OneAnswer KiwiSaver-Intl Share 1.7283 14.16 12.90 14.62 OneAnswer KiwiSaver-Sustainable Int Shr 1.6567 11.81 9.56 10.98 SIL 60s + Sup International Share Fund 3.2872 14.07 12.50 14.11 New Zealand Insurance Fund Equity Sector Global - Real Estate AMP KiwiSaver Property 0.9709 -3.01 --OneAnswer KiwiSaver-Intl Property 1.3467 -4.94 7.16 9.92 New Zealand Insurance Fund Equity Sector NZ - Real Estate MFL Property Fund 3.8988 -4.55 8.76 11.97 OneAnswer KiwiSaver-Australasian Prpty 1.7706 -2.36 10.86 12.82 New Zealand Insurance Fund Global Bond AMP KiwiSaver International Fxd Intr 1.004 -0.30 --AMP Prem PSS Blackrock Global Fixed Int 1.97256 -0.38 4.47 4.72 AMP Prem PSS PIMCO Global Fixed 2.33012 2.09 5.21 5.62 Interest AMP Prem PSS SSgA Global Fixed 1.96482 -1.76 4.68 4.68 Int Index OneAnswer KiwiSaver-Intl Fxd Int 1.6764 -1.57 4.40 4.11 Name
Size Morningstar Rating $M Overall 45.90 93.03 12.75 81.25 90.50 19.01 64.07 12.31 10.22 16.00 22.72 18.88
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82.89 107.23 3.96 1.07 4.37 339.31 3.93 1.36 418.13 123.00 18.61 4.03 27.65 121.79 15.43 0.33 34.16 1.61 311.94
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4.40 29.32 6.25 27.08
3 2 1 4
0.61
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4.70 8.83 1.45 6.62 24.03
4 3 1 1 3
0.79 0.99 8.98 11.58 5.55 5.58 9.71 46.80 0.61 0.43 22.02 9.92 24.46 87.27 13.09 3.26 39.97 6.27 13.09
--4 3 2 3 3 -3 2 2 3 2 3 --4 2 5
1.15 8.18
-4
498.91 17.21
2 4
0.32 2.17 2.37
-3 5
8.66 2.55
4 2
Latest 1 Yr 3 Yr Transaction Return Return Exit Price % New Zealand Insurance Fund Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund 1.4801 9.27 6.68 AMP NZRT AMP Aggressive 3.0342 8.22 5.74 AMP PSS DynamicMkts Growth 1.82895 8.59 6.20 AMP PSS Select Growth 1.72375 8.56 6.17 Aon KiwiSaver Russell Lifepoints 2045 8.491 9.85 11.00 Booster KiwiSaver Asset Class Growth 8.3437 10.71 7.90 Booster KiwiSaver Geared Growth 1.9916 11.90 11.17 Booster KiwiSaver High Growth 1.475 8.86 8.93 Fisher Funds Growth KiwiSaver Fund 1.9283 7.68 9.37 Fisher FuturePlan - Growth 2.88671 6.53 7.40 Generate KiwiSaver Focused Growth Fund 1.4911 10.26 11.67 Kiwi Wealth KiwiSaver Growth -13.35 8.88 Mercer KiwiSaver High Growth -10.83 10.45 NZ Defence Force KiwiSaver High Growth -10.60 -New Zealand Insurance Fund Multisector - Balanced AMP KiwiSaver AMP Global Multi-Asset 1.0591 5.42 -AMP KiwiSaver AMP Responsible 1.0619 5.37 -Invmt Bal AMP KiwiSaver ASB Balanced 1.0729 6.61 -AMP KiwiSaver Fisher Balanced 1.7442 5.27 7.42 AMP KiwiSaver LS Balanced Fund 1.614 6.06 5.62 AMP KiwiSaver LS Moderate Balanced 1.5971 4.85 5.22 Fund AMP NZRT AMP Balanced Fund 2.85564 5.11 4.70 AMP NZRT AMP Global Multi-Asset 1.05672 5.76 -AMP NZRT AMP Moderate Balanced 2.09631 3.82 4.25 AMP NZRT ASB Balanced Fund 2.00582 5.44 7.44 AMP NZRT Fisher Balanced 2.3474 4.29 6.39 AMP NZRT Nikko AM Balanced 2.5395 4.35 8.14 AMP NZRT Responsible Investment Bal 1.06711 6.43 -AMP PSS DynamicMkts Balanced 1.84278 5.38 5.05 AMP PSS Lifesteps Consolidation 1.76423 4.09 4.74 AMP PSS Lifesteps Progression 1.85646 5.28 4.95 AMP PSS Select Balanced 1.78524 5.37 5.04 ANZ Default KiwiSaver Scheme-Balanced 1.6763 4.76 7.64 ANZ KiwiSaver-Balanced 1.7501 4.81 7.69 Aon KiwiSaver ANZ Balanced 24.3023 5.26 7.75 Aon KiwiSaver Russell Lifepoints 2025 8.8201 5.78 8.40 Aon KiwiSaver Russell Lifepoints Bal 8.9844 8.09 9.87 ASB KiwiSaver Scheme's Balanced 1.7489 6.86 9.21 BNZ KiwiSaver Balanced Fund 1.4129 7.86 8.42 Booster KiwiSaver Balanced 1.6841 5.35 7.27 Booster KiwiSaver Socially Rsp Inv Bal 1.2827 4.73 8.15 Fidelity Life Balanced 4.4172 5.34 6.37 Fidelity Life Super-Super Balanced -4.93 -Fisher FuturePlan - Balanced 3.96116 4.85 6.52 Fisher TWO KiwiSaver Scheme-Bal 4753.2822 5.86 7.34 Kiwi Wealth KiwiSaver Balanced -8.64 7.24 Mercer KiwiSaver Balanced -6.81 8.08 Milford KiwiSaver Balanced 2.02456 7.24 10.41 NZ Defence Force KiwiSaver Balanced -6.60 -OneAnswer KiwiSaver-Balanced 1.7738 4.82 7.80 Westpac KiwiSaver-Balanced Fund 1.7023 6.43 8.31 Westpac Retirement Plan - Balanced Port 3.5443 5.33 7.17 New Zealand Insurance Fund Multisector - Conservative AMP KiwiSaver ANZ Conservative 1.0235 1.67 -AMP KiwiSaver Default (Default) 1.5946 3.77 5.05 AMP PSS Select Income 1.7505 0.13 3.63 ANZ Default KiwiSaver Scheme Cnsrv(Dflt) 1.6695 1.80 5.62 ANZ KiwiSaver-Conservative 1.634 1.67 5.45 Aon KiwiSaver Russell Lifepoints Cnsrv 9.4347 3.51 6.80 ASB KiwiSaver Scheme's Cnsrv (Default) 1.6933 3.47 5.96 BNZ KiwiSaver Conservative (Default) 1.2655 4.47 5.88 BNZ KiwiSaver First Home Buyer Fund 1.0879 4.09 -Booster KiwiSaver Default Saver 1.1851 2.30 5.48 FANZ Lifestages KiwiSaver Income 1.05138 --Fisher Funds Conservative KiwiSaver Fund 1.5375 2.22 5.75 Fisher FuturePlan - Capital Prot 1.21402 1.51 1.50 Fisher TWO KiwiSaver Cash 1.67784 3.26 5.82 Enhanced(Dflt) Kiwi Wealth KiwiSaver Conservative -3.85 5.28 Kiwi Wealth KiwiSaver Scheme Default Fd -4.93 -Mercer KiwiSaver Conservative (Default) -3.49 6.08 Milford KiwiSaver Conservative Fund 1.60363 5.40 8.25 NZ Defence Force KiwiSaver Conservative -3.14 -OneAnswer KiwiSaver-Conservative 1.6507 1.70 5.48 Westpac KiwiSaver Default 1.1767 2.78 5.45 New Zealand Insurance Fund Multisector - Growth AMP KiwiSaver ANZ Balanced Plus 1.9487 6.01 8.19 AMP KiwiSaver ANZ Growth 1.0842 7.56 -AMP KiwiSaver ASB Growth 1.1019 9.53 -AMP KiwiSaver LS Growth Fund 1.5225 8.22 6.25 AMP KiwiSaver Nikko AM Balanced 1.736 5.30 9.05 Name
5 Yr Size Morningstar Rating Return $M Overall 10.67 9.60 9.75 9.82 13.91 -12.21 10.79 11.94 10.00 -12.90 12.94 --
264.32 257.20 3.95 33.84 14.93 47.45 9.27 178.37 1369.47 70.63 222.74 1065.08 127.55 8.51
3 2 4 4 5 3 4 3 4 3 5 4 5 --
---9.06 8.17 7.30 7.13 -6.25 8.76 8.08 9.14 -7.33 6.56 7.32 7.38 9.03 9.52 9.66 10.25 11.78 10.13 -7.62 -7.27 -8.13 8.96 9.45 9.86 12.64 -9.63 9.80 8.61
4.31 3.43 3.18 36.21 815.33 560.43 788.39 1.18 280.39 74.31 158.05 157.17 2.03 3.15 7.16 2.75 47.76 99.65 1770.56 28.25 18.25 112.01 1091.97 230.55 380.33 29.44 5.28 239.22 119.86 614.29 1273.06 303.05 163.94 29.46 481.39 1198.63 100.23
---3 3 2 1 -2 3 4 3 -3 2 3 3 3 4 4 4 5 4 4 2 4 3 -4 3 4 4 5 -4 4 3
-5.62 2.91 6.01 5.96 7.65 6.00 ----6.45 1.53 6.00 5.81 -6.76 --6.00 --
2.94 1353.93 1.64 1051.17 668.40 74.95 3558.62 437.08 53.18 43.04 54.30 561.31 21.32 721.41 525.69 115.89 1076.04 37.90 1.46 406.15 120.87
-3 2 4 3 5 3 4 -3 -4 1 4 3 -5 --3 3
10.84 --9.68 10.16
218.88 3.70 2.94 623.65 42.56
3 --2 2
Latest 1 Yr 3 Yr Transaction Return Return Exit Price % AMP KiwiSaver Nikko AM Growth 1.0762 7.14 -AMP NZRT AMP Growth 2.14413 7.19 5.35 AMP NZRT ANZ Balanced Plus 2.45601 4.99 7.22 AMP NZRT ANZ Growth 1.08286 7.98 -AMP NZRT ASB Growth 1.09167 9.16 -AMP NZRT Nikko AM Growth 1.06763 6.88 -AMP PSS Lifesteps Growth 1.81545 7.51 5.75 ANZ Default KiwiSaver Scheme1.6844 6.67 8.77 Balanced Gr ANZ Default KiwiSaver Scheme-Growth 1.6809 8.25 9.70 ANZ KiwiSaver-Balanced Growth 1.7875 6.62 8.81 ANZ KiwiSaver-Growth 1.8044 8.24 9.80 Aon KiwiSaver Milford 3.1061 6.80 11.33 Aon KiwiSaver Nikko AM Balanced 17.6914 5.17 9.21 Aon KiwiSaver Russell Lifepoints 2035 8.7324 8.06 9.88 Aon KiwiSaver Russell Lifepoints Growth 8.9275 9.82 10.93 ASB KiwiSaver Scheme's Growth 1.7321 9.12 10.80 BNZ KiwiSaver Growth Fund 1.4959 10.46 9.64 Booster KiwiSaver Balanced Growth 1.65 7.05 8.23 Fidelity Life Growth 4.2656 8.03 7.65 Fidelity Life Super-Super Growth -6.32 7.30 Fisher TWO KiwiSaver Scheme-Gr 1.6795 7.57 8.21 Generate KiwiSaver Growth Fund 1.4461 6.79 10.75 Mercer KiwiSaver Growth -9.37 -Milford Active Growth KiwiSaver 3.1282 6.97 11.45 NZ Defence Force KiwiSaver Growth -9.12 -OneAnswer KiwiSaver-Balanced Growth 1.8129 6.62 8.87 OneAnswer KiwiSaver-Growth Fund 1.8279 8.29 9.89 SIL 60s + Sup Balanced Fund 4.122 6.53 8.40 Westpac KiwiSaver-Growth Fund 1.7447 7.85 9.60 Westpac Retirement Plan - Dynamic Port 4.0007 6.80 8.51 New Zealand Insurance Fund Multisector - Moderate AMP KiwiSaver AMP Income Generator 1.0491 4.13 -AMP KiwiSaver ASB Moderate 1.0459 3.94 -AMP KiwiSaver LS Conservative Fund 1.6947 2.59 4.23 AMP KiwiSaver LS Moderate Fund 1.6314 3.90 4.75 AMP KiwiSaver Nikko AM Conservative 1.0329 2.72 -AMP NZRT AMP Capital Assured Fund 2.45269 4.12 4.29 AMP NZRT AMP Conservative 2.70192 1.57 3.23 AMP NZRT AMP Income Generator 1.04677 4.45 -AMP NZRT AMP Moderate 2.07921 2.91 3.76 AMP NZRT ASB Moderate 1.05329 5.28 -AMP NZRT Nikko AM Conservative 1.02878 2.85 -AMP PSS DynamicMkts Conservative 1.77002 1.73 3.49 AMP PSS Lifesteps Maturity 1.68558 1.49 3.43 AMP PSS Lifesteps Stability 1.77701 3.08 4.00 AMP PSS Select Conservative 1.7605 1.79 3.50 ANZ Default KiwiSaver Scheme-Cnsrv Bal 1.6705 3.09 6.53 ANZ KiwiSaver-Conservative Balanced 1.6996 3.17 6.56 Aon KiwiSaver Russell Lifepoints 2015 9.0148 3.52 6.91 Aon KiwiSaver Russell Lifepoints Mod 9.3381 5.69 8.34 ASB KiwiSaver Scheme's Moderate 1.738 4.41 7.48 BNZ KiwiSaver Moderate Fund 1.3429 6.26 7.35 Booster KiwiSaver Asset Class Cnsrv 3.5526 3.72 5.85 Booster KiwiSaver Moderate 1.6429 2.71 5.69 Fisher TWO KiwiSaver Scheme-Cnsrv 1.74176 3.63 5.91 Generate KiwiSaver Conservative Fund 1.263 1.13 6.85 Mercer KiwiSaver Moderate -4.69 -NZ Defence Force KiwiSaver Moderate -4.48 -OneAnswer KiwiSaver-Conservative Bal 1.7154 3.15 6.54 Westpac KiwiSaver - Moderate 1.2137 4.20 6.53 Westpac KiwiSaver-Conservative Fund 1.6258 2.99 5.72 New Zealand Insurance Fund NZ Bonds AMP KiwiSaver NZ Fixed Interest 1.0103 0.40 -AMP Prem PSS ACI NZ Fixed Interest 2.0454 0.29 5.20 AMP Prem PSS OnePath NZ Fixed Interest 1.86334 -0.61 4.83 Fidelity Life NZ Fixed Interest 4.0162 1.24 3.54 Fidelity Life Super-Super Fixed Int -1.14 3.35 OneAnswer KiwiSaver-NZ Fixed Interest 1.6637 -0.13 5.32 SIL 60s + Sup NZ Fixed Interest 2.9272 -0.44 4.76 Westpac Retirement Plan - Accum Port 3.2681 -0.01 2.46 New Zealand OE Cash AMP AIT NZ Cash - UT35 1.10657 1.91 2.65 AMP ARS-Cash 1.94874 1.95 2.82 AMP Capital Cash Advantage Fund 1.41974 1.33 2.36 AMP Capital NZ Cash Fund 1.64126 2.23 2.96 AMP Capital Term Advantage ---AMP Prem PUT OnePath NZ Cash 1.39019 1.87 2.50 AMP PUT Select Cash 1.33077 1.66 2.30 ASB Cash Fund -0.65 1.85 BT Enhanced Cash Fund 2.0854 2.29 2.89 Name
5 Yr Size Morningstar Rating Return $M Overall -- 2.25 -8.63 196.98 2 9.83 271.66 3 -- 4.09 --- 1.57 --- 3.59 -8.87 0.34 2 10.68 109.47 3 12.25 93.91 4 11.30 1499.53 3 12.96 2350.14 5 14.60 120.90 5 10.30 7.91 2 12.23 16.77 4 13.41 32.90 5 12.26 1273.02 4 -- 211.87 4 9.23 212.78 2 9.08 3.17 3 8.88 98.68 3 10.93 263.11 3 -- 186.19 4 -- 50.99 -14.77 723.06 5 -- 8.51 -11.38 422.61 3 13.07 324.00 5 10.58 96.38 4 11.64 904.71 4 10.51 107.87 3 --5.17 6.32 -3.42 4.14 -5.27 --4.30 4.29 5.44 4.34 7.41 7.76 8.12 9.71 7.87 --5.34 6.43 ---7.77 -6.29
1.39 0.71 317.87 398.15 1.33 101.16 294.48 0.43 119.36 0.80 1.55 0.83 3.33 5.37 9.58 32.52 828.57 4.79 19.30 1305.42 298.41 15.82 134.03 126.91 99.46 57.40 1.94 156.42 231.42 2212.04
--3 3 -1 2 -2 --3 3 2 3 4 4 5 5 4 4 3 3 3 4 --4 4 3
-- 0.32 4.04 11.51 3.39 2.21 3.24 0.21 3.18 1.26 3.81 6.90 3.26 7.45 2.36 18.22
-4 3 2 1 3 2 1
2.05 2.94 2.78 3.07 -2.63 2.41 2.37 2.97
----------
9.86 11.63 89.75 4642.21 -2.73 3.08 266.26 118.29
ASSET ADVISER
Latest 1 Yr Transaction Return Exit Price % Fisher Cashplus Fund 1.3055 2.15 Nikko AM NZ Cash 1.025 2.80 NZ Funds Core Cash 1.33346 1.83 New Zealand OE Equity Region Australasia AMP AIT Australasian Shrs-Multi 2.84657 5.43 Mgr-UT07 AMP ARS-NZ & Australian (multi3.33339 5.95 manager) AMP ARS-NZ & Australian (Value) 3.74458 -1.34 AMP NZRT Australasian Shares 1.30292 6.93 AMP Prem PUT OnePath NZ Shares 2.25403 1.70 BT PS Australasian Diversified Share 2.1006 3.63 Castle Point Ranger Fund 1.3776 15.77 Devon Alpha Fund 1.5812 -0.04 Devon Dividend Yield 1.8651 1.05 Devon Trans-Tasman Fund 3.6517 2.67 Forte Equity Trust 1.46188 26.08 Harbour Australasian Equity 2.3638 7.53 Harbour Australasian Equity Focus Fund 1.4705 9.14 Harbour Australasian Equity Income 1.7214 2.70 Milford Trans-Tasman 2.32803 10.36 Mint Australia NZ Active Equity 2.556 4.75 Nikko AM Concentrated Equity 2.036 6.64 OneAnswer SAC Equity Selection 2.2772 2.05 Pie Australasian Dividend 2.3206 7.66 Pie Australasian Emerging Companies 3.0092 2.44 Pie Australasian Growth Fund 4.4425 -10.74 Pie Growth 2 Fund 1.3839 5.12 New Zealand OE Equity Region Australia AMP Capital Australian Share Fund 2.45051 3.19 Devon Australian 1.3646 3.21 Fisher Funds Australian Growth Fund 3.2295 -3.13 Fisher Funds Premium Australian Fund 1.4189 -2.96 Milford Dynamic 1.51026 3.68 OneAnswer SAC Australian Share 3.8129 1.33 New Zealand OE Equity Region Emerging Markets AMP AIT Emerging Markets - UT65 1.37074 14.60 New Zealand OE Equity Region NZ AMP Capital NZ Shares Fund 2.76094 3.73 AMP Capital RIL NZ Shares 1.87842 4.41 AMP Prem PUT ACI NZ Shares 2.57558 3.23 AMP Prem PUT ACI NZ Shares Index 1.97761 4.92 BT Dividend Share Fund 2.2261 4.07 Fisher Funds NZ Growth Fund 7.6907 9.07 Fisher Funds Premium New Zealand Fund 1.8031 9.16 Fisher Trans Tasman Equity Trust 4.8719 2.12 Forsyth Barr New Zealand Equities 2.5825 11.22 Harbour NZ Equity Advanced Beta Fund 1.4019 6.44 Nikko AM Core Equity 2.011 5.90 NZ Funds Dividend and Growth 1.7676 7.67 OneAnswer SAC NZ Share 4.3876 3.77 Russell Investments NZ Shares 1.6214 5.91 Smartshares NZ Core Equity Trust 1.3484 8.85 New Zealand OE Equity Region World AMP AIT Global Equities-Multi Mgr-UT28 1.18566 15.93 AMP AIT Global Infrastructure - UT04 2.58958 7.27 AMP ARS-International Shares (Growth) 1.42579 14.25 AMP ARS-International Shares (Passive) 1.62751 16.76 AMP ARS-International Shares (Value) 1.36482 20.93 AMP Capital Core Global Shares Fund 1.37897 9.45 AMP Capital Core Hedged Global 1.50766 19.83 Shares Fd AMP Capital Emerging Markets Share 1.11578 16.44 AMP Capital Global Listed Infrastructure 1.77174 9.04 AMP Capital Global Shares Fund 2.72237 15.47 AMP Capital Resp Invest Leaders Gl Sh 1.5683 15.17 AMP NZRT International Shares 1.39888 15.54 AMP NZRT Passive International Shares 1.39204 15.40 AMP Prem PUT FD Intl Share Fund 1 Value 1.27549 9.24 AMP Prem PUT FD Intl Share Fund 1.40974 11.35 3 Growth AMP Prem PUT SSgA Global Shares Index 1.72274 10.23 AMP Prem PUT SSgA Global Shares 2.32195 15.81 IndexHdg ASB World Shares 1.5632 16.43 BT PS International Diversified Share 1.7154 17.28 Elevation Capital Value Fund 1.5643 9.07 Fisher Funds International Growth Fund 1.7973 14.07 Fisher Funds Premium International Fund 1.8666 14.01 Fisher Global Fund 5.0735 12.54 Milford Global Fund 1.37689 9.90 Nikko AM Global Equity Hedged 1.7638 18.84 Nikko AM Global Equity Unhedged 1.7335 8.57 NZ Funds Equity Inflation 0.8707 -2.69 Name
3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 2.59 2.54 35.63 -3.33 -- 105.58 -2.65 2.65 58.04 -7.59 10.54 18.58
1
8.21 11.50 8.95 7.94 13.00 9.89 6.94 14.01 10.20 12.50 13.38 12.38 10.45 11.25 14.09 16.23 7.92 11.69 17.63 9.70 --
11.13 15.98 -13.58 17.32 -13.86 -14.30 -18.26 -14.25 14.68 18.72 17.60 13.12 17.46 -15.87 --
7.44 5.30 8.39 1.84 178.45 22.93 95.77 77.91 107.33 14.43 188.09 12.04 48.12 252.59 60.99 34.30 16.74 89.51 86.93 72.45 133.42
2 3 2 3 4 3 2 4 3 3 5 4 3 3 5 4 2 4 5 3 --
2.00 7.29 6.91 7.10 10.32 0.62
5.34 10.34 7.43 7.74 -5.75
183.45 25.94 58.27 63.99 168.19 28.86
1 4 3 4 5 2
2.47
3.13
3.06
--
14.67 15.00 14.13 14.07 16.41 13.35 13.43 11.35 17.64 -16.33 14.35 12.47 14.73 15.87
17.26 -16.76 16.86 18.80 17.09 17.13 14.99 18.62 -18.49 14.27 16.77 ---
480.66 12.73 1.85 4.17 18.90 152.42 88.64 48.79 18.30 113.77 7.93 85.35 124.22 232.27 43.29
4 4 4 3 5 2 3 2 5 -4 2 3 3 4
8.82 7.80 14.24 8.62 11.16 11.45 10.28 5.43 5.65 10.12 6.70 10.79 9.63 7.85 11.16 10.25 10.32 12.68 10.88 7.79 9.54 9.95 5.56 8.14 11.09 10.84 4.05
12.51 13.04 18.55 13.61 17.44 14.14 16.25 6.74 -14.43 12.12 --11.80 12.72 12.67 15.56 14.27 13.47 10.76 10.86 11.23 10.79 ---5.94
21.85 19.30 7.14 3.62 5.51 857.01 551.56 75.99 324.33 138.23 59.37 9.03 4.74 2.38 2.12 4.25 7.16 151.86 267.43 26.95 36.88 81.71 92.03 325.53 85.45 112.48 85.65
3 3 5 3 5 4 4 1 1 4 3 4 3 2 3 3 4 4 4 2 2 2 3 2 4 3 1
Latest 1 Yr Transaction Return Exit Price % OneAnswer SAC International Share 1.9705 13.97 Pathfinder Global Water 1.8004 6.16 Pathfinder World Equity Fund 1.6273 8.78 Pie Global Small Companies Fund 1.3912 13.55 Russell Investments Global Shares 1.769 13.51 Russell Investments Hedged Global 1.9967 18.73 Shares T.Rowe Price Global Equity Growth 1.3353 15.79 New Zealand OE Equity Sector Global - Real Estate AMP AIT Global Property - UT54 3.1033 -3.60 AMP ARS-Listed International Property 3.8025 -3.01 AMP Capital Global Propty Securities Fd 1.52501 -4.47 NZ Funds Property Inflation 1.5154 -0.99 OneAnswer SAC International Property 1.3618 -5.21 New Zealand OE Equity Sector NZ - Real Estate AMP ARS-Listed NZ & Australian Property 3.23204 -3.43 AMP Capital Listed Property Secs Fd 2.3079 -2.88 AMP Capital NZ Property Fund 2.18687 -5.15 BT Property Fund 4.0813 0.14 Mint Australia NZ Real Estate Investment 1.7525 -3.39 OneAnswer SAC Property Securities 3.1116 -2.40 New Zealand OE Global Bond AMP AIT Fixed Interest Income - UT36 1.20428 2.04 AMP AIT Global Bonds-Multi Mgr-UT13 1.97409 -0.93 AMP ARS-International Fixed Interest 2.4535 -0.36 AMP Capital Global Short Duration 1.0905 2.40 AMP Capital Hdgd Gbl Fixed Intrst Fund 2.34472 0.76 AMP NZRT International Fixed Interest 1.15774 0.22 AMP Prem PUT Blackrock Global Fixed Int 1.82694 -0.41 AMP Prem PUT PIMCO Global Fixed 2.32764 1.98 Interest AMP Prem PUT SSgA Global Fixed 1.8185 -1.50 Int Index ASB World Fixed Interest 1.1135 0.19 BT PS International Diversified Bond 2.1992 1.15 Fisher BondPlus Fund 2.1739 0.79 Fisher Funds High Income 1.0228 1.71 Nikko AM Global Bond 1.1524 0.40 NZ Funds Global Income 1.4415 2.35 OneAnswer SAC International Fixed Intrst 1.2016 -1.65 Russell Investments Global Fixed Int 1.1879 1.54 New Zealand OE Miscellaneous AMP ARS-UK Cash 0.67458 -6.69 Fisher Funds Property and Infrastructure 2.2392 8.90 KTAM NZ Australian Long Short Equity 1.29388 -Nikko AM Income 1.2438 1.91 Nikko AM Multi-Strategy 1.1204 3.90 NZ Funds Core Inflation 1.3077 -0.58 NZAM Alpha Fund 1.1034 -5.37 NZAM Global Growth 1.4013 -1.87 Pathfinder Commodity Plus Fund 0.8515 -5.00 Salt Long Short Fund 1.504 7.76 Salt Long Short Fund 1.4734 7.07 New Zealand OE Multisector - Aggressive AMP AIT Aggressive Portfolio - UT31 1.87975 8.17 AMP AIT eInvest - Aggressive - MDF7 1.31405 9.13 AMP AIT Growth Portfolio - UT03 1.80409 7.26 AMP Capital Growth Fund 2.55018 9.52 AMP PUT DynamicMkts Growth 1.85673 8.32 AMP PUT Select Growth 1.6454 8.39 New Zealand OE Multisector - Balanced AMP AIT eInvest - Balanced - MDF5 1.24094 5.96 AMP AIT Moderate Portfolio - UT01 1.81672 3.11 AMP ARS-Balanced 2.00175 6.29 AMP Capital Global Multi Asset Fund 1.21515 5.73 AMP Capital Responsible Inv Leaders Bal 1.83226 5.66 AMP PUT DynamicMkts Balanced 1.81602 5.08 AMP PUT Select Balanced 1.71479 5.20 ANZ Invmt Fds Balanced 1.7081 4.46 ASB Balanced 1.5709 6.25 Milford Balanced 1.98895 7.16 NZ Funds Core Growth 1.3688 -0.07 OneAnswer MAC Balanced 1.7081 4.46 Westpac Active Balanced Trust 2.1281 5.70 New Zealand OE Multisector - Conservative AMP PUT Select Income 1.63081 -0.02 ANZ Invmt Fds Conservative 1.4857 1.46 ASB Conservative 1.5656 2.87 Milford Conservative 1.08486 5.46 OneAnswer MAC Conservative 1.4857 1.46 Westpac Active Conservative Trust 1.8321 2.41 Name
3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 13.56 15.83 178.88 5 9.30 13.46 14.07 3 9.45 -- 31.89 3 8.68 -- 75.99 3 11.59 -- 60.74 4 10.95 14.82 60.34 4 --- 19.73 -7.29 6.11 5.28 5.24 6.83
9.83 2.48 9.65 5.55 9.89 214.97 6.47 85.66 -- 5.31
5 3 2 2 3
9.58 11.00 8.68 12.36 10.04 10.78
10.76 12.10 8.84 12.79 11.33 12.63
4.44 9.12 121.15 79.98 45.84 127.45
1 3 -5 2 3
3.22 3.34 4.07 3.27 4.41 4.18 4.20 5.03
3.24 3.59 4.29 3.76 4.67 -4.52 5.60
89.19 10.66 1.79 200.69 82.60 1.90 1.29 2.26
1 2 3 2 3 3 3 5
4.54 3.08 3.54 4.47 4.73 4.45 3.46 4.29 5.54
4.59 2.98 4.20 5.06 4.74 -3.63 -5.92
4.74 315.78 337.10 153.67 67.34 21.88 118.38 2.68 534.75
3 1 2 4 4 4 2 3 5
-4.71 12.12 -6.11 3.30 1.82 1.00 1.54 -2.73 12.77 --
-2.55 13.29 -6.20 -4.23 -3.94 -3.42 ---
9.76 78.80 21.87 10.70 122.86 117.38 33.51 47.85 18.92 257.79 236.71
------------
5.16 6.41 5.15 5.91 6.06 6.01
8.17 -7.89 9.69 9.65 9.68
95.72 51.21 35.54 6.53 3.89 14.17
1 3 1 4 3 2
5.47 3.89 6.00 5.45 5.51 4.89 4.90 7.32 8.62 10.04 2.58 7.32 7.47
-5.33 8.17 -8.54 7.21 7.24 9.21 9.52 12.24 8.53 9.21 9.28
86.69 95.04 153.72 185.13 46.02 4.67 38.54 217.86 168.11 413.07 87.87 37.40 243.07
2 1 3 3 3 2 2 3 4 5 2 3 4
3.59 5.20 5.34 -5.20 4.74
2.86 5.72 5.37 -5.72 5.43
2.79 50.23 133.95 141.47 9.46 232.55
1 3 2 -3 2
Latest Transaction Exit Price New Zealand OE Multisector - Growth AMP AIT Balanced Portfolio - UT 02 1.88614 AMP AIT eInvest - Growth - MDF6 1.29353 AMP ARS-High Growth 1.79293 ANZ Invmt Fds Balanced Growth 1.842 ANZ Invmt Fds Growth 1.945 ASB Growth 1.5333 Fisher Multi Sector Fund 3.1027 Milford Active Growth 3.10065 NZ Funds Global Equity Growth 1.521 OneAnswer MAC Balanced Growth 1.842 OneAnswer MAC Growth 1.945 OneAnswer SAC Balanced 2.9295 Westpac Active Growth Trust 2.0688 New Zealand OE Multisector - Moderate AMP AIT eInvest - Conservative - MDF2 1.1712 AMP AIT eInvest - Moderate - MDf3 1.20903 AMP ARS-Conservative 2.19088 AMP Capital Conservative Fund NZ 2.35679 AMP Capital Income Generator Fund 1.11581 AMP PUT DynamicMkts Conservative 1.71471 AMP PUT Select Conservative 1.72566 ANZ Invmt Fds Conservative Balanced 1.5942 ASB Conservative Plus 1.5567 ASB Moderate 1.5717 Harbour Income 0.9958 Milford Diversified Income 1.63531 Mint Diversified Income Fund (Retail) 1.0434 NZ Funds Global Multi-Asset Growth 0.5629 OneAnswer MAC Conservative Balanced 1.5942 Westpac Active Moderate Trust 1.4409 New Zealand OE NZ Bonds AMP AIT NZ Bond - UT36 1.19795 AMP AIT NZ Fixed Interest - UT60 1.73057 AMP ARS-NZ Fixed Interest 2.47817 AMP Capital NZ Fixed Interest Fund 1.68483 AMP Capital NZ Short Duration 1.27134 AMP NZRT NZ Fixed Interest 1.21801 AMP Prem PUT ACI NZ Fixed Interest 2.03145 AMP Prem PUT OnePath NZ Fixed Interest 1.73726 BT Corporate Bond Fund 1.6476 BT PS NZ Diversified Bond 1.3346 Fisher New Zealand Fixed Inc Trust 1.2722 Forsyth Barr NZ Fixed Interest 1.6709 Forsyth Barr Premium Yield 1.7102 Harbour NZ Core Fixed Interest 1.1047 Harbour NZ Corporate Bond 1.0664 Nikko AM NZ Bond 1.0284 Nikko AM NZ Corporate Bond 1.1626 NZ Funds Core Income 1.54354 OneAnswer SAC NZ Fixed Interest 1.6665 Russell Investments NZ Fixed Interest 1.1813 Westpac Active Income Strategies Trust 1.1864 Name
1 Yr 3 Yr 5 Yr Size Morningstar Return Return Rating Return $M Overall % 5.25 8.14 8.31 6.22 7.93 8.48 4.52 6.59 12.17 6.22 7.93 5.76 7.02
4.67 6.01 6.50 8.50 9.45 10.15 6.34 11.18 9.34 8.50 9.45 8.26 8.66
6.77 -9.62 11.05 12.62 11.59 8.31 14.56 11.90 11.05 12.62 10.50 11.02
106.14 31.12 54.06 157.83 79.16 33.23 11.71 739.51 62.58 32.74 19.54 51.70 73.50
1 1 2 3 4 4 2 5 2 3 4 4 3
2.55 3.79 2.80 2.23 4.03 1.68 1.65 2.82 -3.85 2.39 7.23 1.39 -1.46 2.82 3.70
3.96 4.53 4.59 4.00 7.64 3.36 3.30 6.22 -6.90 -11.21 --10.98 6.22 6.06
--5.45 4.82 -4.19 4.21 7.39 -7.28 -12.84 --7.16 7.39 7.16
25.06 88.43 51.13 9.46 117.73 2.12 15.22 170.13 678.16 288.80 45.52 1651.87 39.81 27.29 10.28 457.95
2 3 3 3 5 2 3 4 -4 -5 -1 4 3
1.92 -0.06 0.35 0.51 2.76 0.69 0.31 -0.72 2.44 0.72 -0.38 1.95 2.36 1.32 2.20 0.74 2.44 2.19 -0.23 0.99 2.20
5.06 4.77 5.35 5.43 4.45 5.43 5.13 4.71 4.59 4.95 4.69 5.25 5.43 5.08 4.96 5.27 5.75 3.98 5.20 5.13 2.98
3.20 3.66 4.17 4.22 4.22 -3.99 3.29 4.56 4.26 3.57 3.77 4.80 4.36 4.70 4.64 5.58 4.27 3.54 -3.05
24.83 6.41 6.81 1748.83 426.70 7.53 8.00 1.59 70.37 210.96 62.00 14.02 54.94 148.51 305.78 52.66 213.39 126.82 12.03 181.51 12.79
2 3 3 4 3 5 4 3 3 4 2 3 5 4 4 4 5 3 2 3 1
Returns are calculated to 31/07/17 Returns are calculated before tax and 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
DATA
ADVISER ASSOCIATIONS
Financial Advice NZ will hope to attract members of existing adviser organisations, as well as those who are not part of any professional body. We asked associations who their members are.
Institute of Financial Advisers:
Professional Advisers Association
➜ 517 AFAs of which 370 hold CFP or CLU designations ➜ 58 RFAs – 90% of whom have completed papers necessary to progress to L5 ➜ 27 Student members
➜ 1150 members and 194 AFAs
Insurance Brokers Association of New Zealand
SiFA ➜ 55 members, all AFAs
➜ 2150 individual advisers almost exclusively RFAs.
Triple A Advisers Association ➜ Membership is 196 currently but growing steadily with another 30 pending and in the pipeline who will be confirmed shortly so round it to 225. AFA/RFA split is almost exactly 60% and 40% respectively.
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NZ Financial Advisers Association ➜ 190 members with approximately 40 AFAs.
Top 10 It's been a busy month at Good Returns. Here's a rundown of the most read stories including all the news from the National Advisers Conference and CBA's announcement that it is considering the divestment of its life insurance businesses.
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Milestone day for financial advice in New Zealand A new bill to replace the Financial Advisers Act was to be introduced on Thursday, Commerce Minister Jacqui Dean announced at the National Advisers Conference.
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Many advisers ‘won’t pass licensing hurdle’ As many as 40% of advisers may fail to receive a licence under the new regulatory regime, it has been suggested
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Advisers should be whistle-blowers Advisers are blowing the whistle on each other – and industry commentators say that’s to be encouraged.
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Law changes an imperfect improvement Changes made to the Financial Services Legislation Amendment Bill before it was introduced to Parliament have been welcomed by the financial advice sector – but some say they did not go far enough.
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Awards to industry’s finest Industry stalwarts and newcomers have been recognised with awards at this year’s joint IFA/PAA conference. TSB Trust to take over Fisher Funds The TSB Community Trust’s commercial arm is to buy the 51% shareholding in Fisher Funds it does not currently own. CBA eyes Sovereign, CommInsure divestment Commonwealth Bank of Australia has signalled the possible divestment of its life insurance businesses in New Zealand and Australia, but Sovereign CEO, Nick Stanhope, says it’s “business as usual”.
Performance fees boost managers’ earnings Performance fees have helped to lift the fee revenue claimed by fund managers Milford and Fisher Funds.
Partners Life profit flat on back of continued growth Partners Life has reported a flat profit for the year to March 31, even though premium revenue has continued to grow. Bill won’t get through this term – so what? Labour “can’t guarantee” position of support for the Financial Services Legislation Amendment Bill won’t change.