ASSET Winter 2023

GRTV: Sam Stubbs wants changes to KiwiSaver

I want this world to knock my socks off

Ignore fixed interest at your peril.

Global bonds at a gallop, but don’t wear blinkers

Perpetual Guardian Investments sharpens funds suite and adds full climate aware overlay amid great wealth transfer

New Zealanders will transfer more than an estimated $1 trillion in wealth over the next two decades as the baby boomer generation ages.1 In light of this momentous shift, the Perpetual Guardian Group’s investment management business, Perpetual Guardian Investments (PGI), is simplifying and improving its investment options and providing a sharpened suite of funds with a focus on climate transition toward Net Zero 2050.

Patrick Gamble, CEO of Perpetual Guardian Group

The Capital Stable and Conservative Funds have been consolidated to form the Conservative Fund, providing an improved asset allocation to better protect investments and enhance the conditions for growth; and the Balanced ESG, Conservative ESG, and Growth ESG are being consolidated into existing aligned funds in the suite, with analogous Asset Allocations already in place. The High Conviction Fund is specifically designed to underpin exposure to good quality growth investments and provide income; it may be incorporated into existing investment options or work as a fund outright.

PGI has also been appointed to manage the New Zealand Bonds Fund and will manage the Core Asset Allocations for that entire suite of funds.

Through more than 135 years of investment management experience, Perpetual Guardian has cultivated a culture of governance and expertise, with capital preservation a key motivator in portfolio construction.

Patrick Gamble, CEO of Perpetual Guardian Group, says, “Sitting still is not always the best option. Having come through the pandemic and into the early stages of the great wealth transfer, it was time to critically review our investment options. This consolidation of funds optimises our core offering to clients and keeps options simple.

“Importantly, the focus on a climate aware overlay across our full suite of funds, rather than select funds as before, allows us to take a more considered approach which acknowledges companies that are delivering measurable value by these metrics. We are applying a multi-faceted approach to climate investing that recognises that science and technology will evolve over time and simply omitting particular investments because of their industry may penalise those companies at the forefront of change.

“This review and refinement of our fund suite comes at a time when some significant tax policy changes have been signalled by the current Government ahead of the general election. Labour has promised to raise the trustee tax rate from 33% to 39% in April 2024 – aligning trusts, excluding charitable trusts, with the top personal tax rate of 39% for income above $180,000.

“This means, unlike the progressive income tax system for individuals, trusts will continue to be subject to a flat tax rate which applies from the first dollar to the last. As other commentators have noted, PIEs would become a more attractive investment option in this circumstance. In working through and landing on the new PGI proposition for investors, we did factor in potential

and likely changes to the tax regime and have positioned the fund suite for responsiveness to a shifting landscape.”

PGI’s Chief Investment Officer Tim Chesterfield says, “Now is the right moment to refine our investment options with the first of a number of innovative funds which can form part of our clients’ diversified investment profiles. As an outcome of our research and investment philosophy, aimed at identifying good quality, long-term sustainable businesses, distinctions between some funds have become marginal.

“Clients value our open communication and information approach and we will continue to share our investment team’s view on the big picture through regular market updates. These will include our thoughts on what’s driving the economy and market movements and making available our detailed research on companies. We want to keep clients informed on what’s making their investments tick. And even as we evolve, we continue to take our fiduciary responsibilities seriously and maintain a cautious approach, adopting longterm strategies linked to disciplined investment principles.

“We believe that companies trying to make a difference on the way to Net Zero by 2050 are the ones that will succeed. The climate is changing and the way companies are responding is changing too. We believe having the flexibility to invest as those responses evolve will provide our clients with the greatest chance of success.”

PGI is a rebrand of the Openly investment management business within the Perpetual Guardian Group. PGI’s investment solutions are fully flexible and invest in New Zealand, Australian, global equities and property alongside New Zealand, Australian and International fixed interest investments. A

1 https://www.perpetualguardian.co.nz/kiwisgive-more-than-quarter-of-a-billion-despite-covidcost-of-living-crisis-as-need-continues-to-grow/

Tim Chesterfield, Chief Investment Officer of Perpetual Guardian Investments (PGI)

Contents | ASSET Winter

Learning from the world’s best

ASSET talks to two high-flying advisers at the 2023 Million Dollar Round Table conference in Nashville: an American who dreams big and brands accordingly, and an Australian who is shining the light on financial abuse.

UP FRONT

05 EDITORIAL

If MDRT is a cult, it’s a good one; also Kiwisaver the political football, and the importance of teaching financial literacy.

08 GRTV

Good Returns TV talks to Simplicity founder Sam Stubbs about Kiwisaver: it’s going great guns but could do even better

06 PEOPLE

The latest comings and goings at Nikko, Trustees Executors, Mint, Fidelity, Edmonds & Craigs

Don’t wear blinkers, despite the

blistering pace of global bonds

Global share markets got off to a roaring start this year, but investors are warned: ignore fixed-interest at your peril.

FEATURES

14 INSURANCE ADVISER PROFILE

Despite misogyny and harassment in the industry – from colleagues as well as clients - insurance adviser Olivia Clements considers the advice industry a great space for women.

REGULARS

30 PRACTICE MANAGEMENT

Too many of the good die young: rising death rates in America should serve as a lesson downunder, but the insurance sector can be part of the solution

26 INVESTMENT COMMENTARY

Being a shareholder in a funds management firm was once seen as an easy way to create wealth –but is that still the case?

32 MORNINGSTAR

34 THE GOOD RETURNS TOP 10

What can we learn from the best in the world?

This issue of ASSET has a couple of themes: KiwiSaver and coverage of the Million Dollar Round Table conference in Nashville, USA.

The former is turning into a bit of an election issue, and the latter I put into the category of adviser development.

MDRT is considered by some to be a bit of a cult. After attending three events, I can see where this comes from - but if it’s a cult, it’s a good one.

While an international organisation, it has its roots in America, and, as we know, American culture is somewhat different to New Zealand.

I’ve become a bit of a fan of the conference, as it is totally next level compared to what we are used to in New Zealand.

It’s very much based on the “soft-skills” alongside personal development. No product stuff. No regulation stuff.

To me, it is aspirational for advisers. Qualifying requires having targets to meet, and targets and goals are great for motivation.

It also gives Kiwi advisers access to different ideas - some of the best in the world.

In addition to my report on the conference, we also talk to Gemma Vivian from Partners Life about how she found the event.

For an adviser’s viewpoint, you can watch an interview with SHARE adviser Aaron Baker on Good Returns TV

Kiwisaver a political football

KiwiSaver is shaping up to be a bit of a political issue with various policies being promoted by different parties.

It’s also been a bit of a theme with our Good Returns TV interviews.

Mint Asset Management marketing manager David Boyle is spot on when he says KiwiSaver should be dealt with as non-partisan issue.

I’d add that any proposed changes

must all be benchmarked against what the scheme was set up for – a long-term savings scheme for retirement purposes.

Every policy should be considered against these benchmarks.

Added to that, politicians must be vigilant and not tinker too much, otherwise members will lose confidence in the scheme.

Another GRTV interview, which you can see on pages 8-9, is with disruptor Sam Stubbs.

Stubbs has some views which are well worth considering, especially around member tax credits.

There are things that can be done to improve KiwiSaver, but any changes have to be in the best interests of members.

Teach financial literacy

Finally, sticking with the election, I was elated to see Labour announce that financial literacy should be taught in schools.

It’s already in the National Curriculum but is an option for schools to teach. Most choose not to.

Many years ago, I interviewed a Year 13 student who had been taught about money in school; it was super-impressive.

Gosh, if I’d left school with his knowledge, I would have managed my financial affairs very differently – and responsibly. We just need to teach the teachers now. Maybe that’s an opportunity for advisers, perhaps some of those who have retired in recent years.

Philip Macalister, Publisher

Contributors

E: subscriptions@tarawera.co.nz

Moved offices?

Make

EDMONDS SCALES LOCAL APEX

Anthony Edmonds has scaled the heights of Apex Group to be appointed head of the New Zealand operation.

Edmonds is the founder and CEO of InvestNow which was acquired by global financial services provider Apex Group

CEO LATEST TO LEAVE TRUSTEES EXECUTORS

Trustees Executors chief executive, Ryan Bessemer, has resigned after five-and-a-half years at the helm and will leave in November.

The firm has lost several others including the head of its legal team, Robert Sloan, and its marketing manager

FIDELITY MAKES TWO APPOINTS TO SUPPORT ADVISERS

Fidelity Life says two new appointments underlines its commitment to the adviser channel.

Leigh Bennett has been promoted internally to the role of head of underwriting, and Mat Bark has been appointed to the newly created role of head of channel enablement.

Fidelity Life chief sales and service officer Bronwyn Kirwan says the appointments underpin a renewed strategic approach for advisers and the adviser channel.

“Following the delivery of some key transformation activities, we are now heavily focused on our distribution franchise and are delighted to announce the appointment of both Leigh and Mat in these critical leadership roles to help drive and enhance our engagement with advisers.”

Bennett will be managing Fidelity Life’s 34-strong underwriting team, working closely with the company’s strategic alliance and adviser business partners and reporting to acting chief insurance officer Adrian Riminton. She will be responsible in ensuring policy

last year.

Bermuda-based Apex Group, which has more than US$3 trillion assets under management, acquired investment administration provider MMC in May of the same year.

Edmonds will continue to work alongside Apex Group’s New Zealand management team, including Renée Tourell, who holds responsibility for the investment administration business, and

is due to leave too.

“Since joining Trustees Executors in 12018, Ryan has focused the company's operations to keep pace with the evolving regulatory and technology requirements,” says chair Rob Russell.

The company has enhanced its market position, technology and customer service under Bessemer's leadership, Russell says.

“Trustees Executors has improved its position as a respected brand supporting New Zealand's funds and wealth

long-time InvestNow and FundRock NZ, executive director, Gareth Fleming.

Following the integration of the MMC business, founder Robert Moss recently retired from the Apex Investment Administration (NZ) board, along with Paul Mersi and Leigh Ryland.

Fleming and Edmonds have now been appointed to this board, joining existing board director, regional head – ANZ, Nicholas Happell.

management sector.”

The most controversial client Trustees Executors has acted as supervisor for during Bessemer's tenure was Vital Healthcare Property Trust at a time when its manager, Canada-based NorthWest Healthcare Properties Real Estate Investment Trust, several times tried to chart a course Vital's investors didn't want.

NorthWest agreed to a change in Vital's fee structure among other measures Vital's investors pushed for.

applications are assessed appropriately, making quality decisions and focused on achieving good customer and commercial outcomes.

During her more than nine years’ experience in the life insurance sector, she has developed a breadth of knowledge across the value chain and built strong relationships with Fidelity Life’s partners and advisers.

She joined Fidelity Life in 2015 as an underwriter before being promoted to new business manager and then to product training manger, where she led the development and delivery of Fidelity Life’s product accreditation programme, accrediting more than 1,800 advisers during the two years she was in the role.

Bark is tasked with shaping Fidelity Life’s future adviser channel experience. This includes business ownership of new digital interfaces and platform innovation, modernising the legacy and in force servicing experience for advisers, and leading Fidelity Life’s Group insurance re-platform.

He joins Fidelity Life from AIA NZ where he was most recently head of existing business. He has extensive experience in technology, operations, risk and crossfunctional leadership, and brings with him a deep understanding of advisers, having held numerous lead roles across the life and health insurance industry for more than nine years.

MINT APPOINTS SENIOR INVESTMENT ANALYST

Mint Asset Management’s Australasian equities team has been boosted by Tom Deacon, who is joining the company as a senior investment analyst.

Deacon was previously a senior analyst within Macquarie’s Australia/ New Zealand research team and led healthcare and technology research alongside equity strategy.

He began his financial markets career at First NZ Capital’s (now Jarden) institutional equities team; subsequently joining Evolution Healthcare and working with fund principals and senior management to increase their private healthcare businesses.

Mint’s chief operations officer Simon Haworth says Deacon’s strong analytical background and technical skills will be used to strengthen the company’s research capability.

NIKKO GROWS INVESTMENT TEAM WITH KEY APPOINTMENT

Nikko hires 16 year ANZ veteran Alan Clarke to the role of portfolio manager, diversified funds and external managers.

Nikko managing director, Stuart Williams, says Clarke’s demonstrated expertise in long-term strategy, tactical asset allocation and stakeholder engagement – honed both internationally

EX AUCKLAND AIRPORT BOSS LANDS AT CRAIGS

Craigs Investment Partners has added another big name to its board.

Former Auckland International Airport chief executive Adrian Littlewood is joining the Craigs IP board.

Littlewood is an experienced business leader with an executive career that has included 12 years at Auckland International Airport, nine of these as CEO. Prior to that he held senior roles

and through senior roles at ANZ Investments over 16 years – will see him make a significant contribution for clients.

“Within investment circles, Alan’s reputation is well known – and I see his experience, technical ability and communication style as an excellent fit for our clients.

"His expertise will allow us to strengthen our relationship with some of the best and most innovative global

across strategy, operations, product, and marketing with Telecom New Zealand (now Spark).

He has recently joined the Mercury NZ board and past governance roles include chair of the NZ Airports Association, a director of North Queensland Airports and Tourism Industry Aotearoa and acting as the New Zealand chair of the Australia/ New Zealand Leadership Forum.

“As we navigate

investment managers, including Nikko AM Europe, Goldman Sachs Asset Management, JP Morgan Alternative Asset Management, ARK Invest and Yarra CM.”

In addition to managing global partner investment relationships and Nikko AM NZ’s diversified funds, Clarke will connect with the Nikko AM Portfolio Solutions Group – a team of 13 highly experienced investment professionals from around the world including Singapore, Tokyo and New York.

the challenges posed by the current economic climate in New Zealand, Adrian's wealth of experience leading one of New Zealand’s largest listed companies including large scale project management, and his strong strategic acumen make him an ideal addition to the Craigs’ board," chairman Sir Ralph Norris says.

"Adrian’s appointment will contribute to ensuring that we remain well-positioned to adapt to the evolving economic landscape for our clients and the future,” says Norris. A

Kiwisaver going great guns, but could do even better

In a recent episode of Good Returns TV, Simplicity founder Sam Stubbs talks about changes he would like to see with KiwiSaver - and why the index manager is getting into private equity.

GRTV:

HOW DO YOU THINK KIWISAVER IS GOING AT THE MOMENT?

Stubbs: I think it's going okay. It's had a fantastic start. We've got three million people enrolled, lots of people contributing, about $100 billion worth of savings.

I think if Michael Cullen were alive today, he'd be pretty happy with how it's done. It has exceeded expectations. But like anything that's 14 years old, it probably needs a bit of a refurb.

We've got to the point where it needs to be compulsory, because otherwise a whole lot of people are just going to miss out. I think it's a fair social contract that if you're earning money, you should be saving a little for your retirement. But if you're not earning money, you shouldn't be.

Make it compulsory. You've got that $900 million of tax credits - basically a middle-class subsidy.

GRTV:

MEMBER TAX CREDITS [GOVERNMENT CONTRIBUTIONS] SHOULD GO?

Stubbs: They should go. And I think you should take that $900 million and spread it across every under-18-year-old in the country, so that when kids sign up, they get $700-$800 a year in their account.

And that means that it would be fiscally neutral right now, and every child would end up with about $25,000 in KiwiSaver account by the time they're 18 or 19. That starts to get rid of some of the income and wealth inequity that's really starting to plague New Zealand.

GRTV: HOW HARD WOULD IT BE TO DO?

Stubbs: Very simple. You already have the mechanism there. You just have to

make it a law that you've got to have a KiwiSaver account. Say when you're registered for your birth, you have to register for a KiwiSaver account as well. That means you get an IRD number too, which is useful. There's a whole lot of poverty that's gets driven by people who don't have IRD numbers. It kills three birds with one stone as far as I'm concerned.

And then that money goes in there. In South Auckland, if you've got an island family with three or four kids, and they want to collectively own a house together: four times $25,000 is $100,000. You're starting to get a house deposit together. Once you get on the housing ladder, as you know, that helps a lot.

We're getting to the point now where KiwiSaver could start discriminating against the poor – against those who don't have it. Because in 30 or 40 years, when they're seeing hundreds of billions of dollars, the government of the day will start formulating superannuation policy based on the assumption that a whole

lot of people have got wealth. And by the way, everyone talks about contributions. Just increase them by half a percent a year.

GRTV: WHAT LEVEL SHOULD CONTRIBUTIONS GET TO?

Stubbs: Well, we all know they've got to get to 10, 12%. The Aussies are going to 12%.

We are way behind the eight ball here now. Australia has, what, six times our population, and yet they have $3 trillion; we have $100 billion. They've got 30 times the savings with six times the population.

It's time for the politicians to put their big-boy trousers on, quite frankly, and admit to the voting population that we need to save more for our retirement. But if you do this slowly, you can build it in to wage negotiations.

GRTV: AND ARE THERE ANY OTHER CHANGES YOU'D LIKE TO SEE?

Stubbs: Look, this is the thing about KiwiSaver: the politicians don't get it.

They don't get that this is a huge pool of savings that will actually fund a whole lot of cool stuff in New Zealand. They're not engaging with KiwiSaver managers, and they're not engaging with the scheme as being a ticket to future prosperity.

It's almost seen like, ‘It's taking money out of your pocket now, and we'll try and minimise that.’ Or we can tap into it to solve a particular interest group's issue. I get that's politics - but boy, the loss of the opportunity is huge.

GRTV: ISN'T IT TELLING THAT WHEN MPS HAVE TO LIST THEIR PECUNIARY INTERESTS AND THEY LIST THEIR KIWISAVERS, SOME OF THEM PUT IN NAMES FOR KIWISAVER PROVIDERS WHO ARE NO LONGER THERE.

Stubbs: Yeah, it's amazing.

GRTV: DOES ENOUGH OF THE KIWISAVER MONEY GET INVESTED IN NEW ZEALAND?

Stubbs: No, because of the lack of opportunity. We've got a tiny stock market and stock exchange, which in my opinion is more interested in making profits than in growing the capital markets for its shareholders.

And you haven't got the things like large scale investment and build-to-rent, which is something we're kicking off, or the infrastructure plays - because successor governments haven't really welcomed KiwiSaver investment into infrastructure in New Zealand.

GRTV: BUT THERE'S MORE AND MORE TALK THAT THERE SHOULD BE MORE INVESTMENTS INTO PRIVATE ASSETS. SURELY THAT'S SOMETHING THAT THEY COULD DO IN NEW ZEALAND?

Stubbs: Well, they could, but you have to think about the motivations of your average KiwiSaver manager. The fees are huge. The incentive to invest long-term to the benefit of members is sort of there, sort of not there. And there's the very low-risk appetite.

And remember, there's massive conflict of interest, too. KiwiSaver is dominated by the banks. Well, the banks want to lend to develop a project rather than take a risk with their KiwiSaver scheme in doing that.

And they don't get paid any more fees for taking on more risk.

GRTV: IT’S INTERESTING THAT THE KIWISAVER PROVIDERS WHO ARE DOING PRIVATE EQUITY OR PRIVATE MARKET TYPE INVESTMENTS ARE PEOPLE LIKE YOURSELVES, GENERATE, PATHFINDER AND MILFORD. IT'S NOT THE BANKS, IS IT?

Stubbs: No, no. There are 26 KiwiSaver schemes. And, what, three or four of us are in private equity. I would call that pretty lazy actually, by the industry. They’re not prepared to embrace the risk or find a way of doing it that makes sense.

GRTV: CAN WE TALK ABOUT PRIVATE EQUITY? SIMPLICITY SET UP A LOW-FEE, INDEX-BASED OFFERING, AND NOW YOU'VE PUT IN PRIVATE EQUITY, WHICH IS PROBABLY THE TOTAL OPPOSITE. HOW DOES THAT FIT TOGETHER?

Stubbs: It’s a very valid question. Ninety percent of our assets stay in low-cost index funds.

We've got about a 10% asset allocation across build-to-rent properties, against mortgages, first-home mortgages and private equity.

Why did we go into those three things? Well, we discovered over the last seven years that the money that our members are giving us is very long duration and very sticky, so we can put it into these assets.

Actually, I think there's almost a fiduciary responsibility in terms of maximising their returns - to put it into the asset classes where that money has a competitive advantage.

We actually make a lot of money by developing these properties, renting them, and managing them over a 50-100 year period. You need large amounts of very long-term monies to do that, but the members get rewarded.

Private equity is another classic example. A typical private equity fund raises money on a very large fee and says, "Listen, we want to be in and out of this transaction within seven years. Leverage up the company, change it, whatever, and then do an exit in seven years.”

Our private equity strategy is very different. We go to the family-owned businesses, existing profitable businesses, and say, "Look, here's the deal. We're a KiwiSaver fund. We're a charity and owned by a non-profit. We're going to be around here forever.

“Because we're a non-profit, we'll never make a dollar. That means we're never worth a dollar, which means we'll never be bought or sold. We're like the Southern Cross of finance.

“Here's what we'd like to do: you run a business which is very successful and very profitable, but quite under the radar. You don't want to be publicly listed and you don't want a typical private equity firm to come in, slice and dice you, and generate a lot of short-term revenue and then leave.

“We want to own 10 to 20% of your

company, no more, and that's it. We just want to own it forever. We want to own the same shares as you do. We'll exit when you do. Or maybe we'll just carry on in business for 50 years.

“We don't want to sit on your board. We don't want to tell you what to do, because we have no value to our debt. But what we do have is a lot of long-term, patient equity capital supplied by our 143,000 members now. And we are perfectly happy owning this forever. We have no exit strategy."

And if we end up having 100 of those companies over the next 30 years… we will actually have an investment in the most profitable sector of the economy, which is family-owned businesses.

It's like being listed without being listed, without all of the drama. And it's a very different proposition. No one else can do that, because no one else can say, hand on heart, "We're going to be around for here for 100 years."

But we are. We have a very long-term view. Our members will, I think, end up making a lot of money from this. In fact, the initial returns on that fund are very strong.

GRTV: WHAT ARE THE INITIAL RETURNS AT THE MOMENT?

Stubbs: It's very early days, but the first handful of investments have returned about 20% so for a year. If you believe in capitalism, the lack of liquidity, the small nature of the firms and so on, means you should get rewarded for taking that risk.

GRTV: DOES IT MAKE YOU AN ACTIVE INVESTOR?

Stubbs: That part of it? Yeah, sort of. The individual investments are active, but of course, if you own 100 of those across industries, that becomes a very passive exposure.

Likewise with mortgages all around the country, that's very passive. Even though you've actively lent to every person, the overall portfolio becomes very passive.

Likewise, with our build-to-rent: if we do own 10,000 homes, which we're aiming to do right across the country, it's very passive income. This active, passive thing to me is a bit of a spurious definition. But under the traditional way of doing it, yes, we're a little bit active. Mostly passive.

GRTV: FINALLY, DID YOU EVER THINK THAT YOU'D END UP RUNNING A NON-PROFIT CROWD OR KIWISAVER ORGANISATION?

Stubbs: No, I didn't. I was a rapacious Goldman Sachs banker for years; it’s been a personal journey. I have to say this has been the best job I've ever had. A

I want this world to knock my socks off

Julianne Hertel is not your average financial adviser. Not in the way she brands her business and not in how she describes and lives her values.

BY PHILIP MACALISTER

Julianne Hertel is an American financial planner who does things a little differently, especially when it comes to positioning her business.

Based in Massachusetts, the 44-yearold has taken a refreshing branding approach, calling her business Dream Big Wealth Strategies - a name which encompasses her approach to financial planning.

The five values prominently displayed on her website include ‘love’, ‘dream’, ‘bespoke’ and ‘a better world.’

When I suggest that these are a little bit different to those normally seen in the financial arena, she says it’s just who she is.

“My company is Dream Big Wealth Strategies, so ‘dreaming’ is a part of it. We more often than not swap out the word ‘goals’ with ‘dreams’, [but] the simplicity is important.

“‘Bespoke love’ is my personal motto. Do all things with love.

“And then we're all in this to make it a better world. That's who I want.

“If you went onto my website, you would know within 30 seconds whether you want to move forward with me or not. And if you decide not to, great. Have a great day.”

One of the things which runs through this interview is how important and influential Million Dollar Round Table has been in her life.

“I never thought big until I joined MDRT,” she says.

“I grew up in a working-class household. My mom's an immigrant. There was no, ‘Let's be adventurous’.

“That wasn't the culture I grew up in. And so MDRT really started helping me think big.

“I want this world to knock my socks off. And work is my blood, sweat, and tears, and what I love to do, but in all the facets of my life it's not the most important.

“So, if I'm going to spend seven hours a day doing something - running a business - which adds stress and complications and things like that, it better be the business I love. It has to be.”

How did you get into MDRT?

While Hertel has her own company, she is also part of an insurance agency.

When she started with them in 2007, the agency head said, "Julianne, I want you to be mentored", and paired her up with somebody.

“She was an MDRT mentor, a member, and she said, "Okay, but if you qualify, you have to come to the meeting. That's the rule."

“I qualified in 2011, but as an aspirant. I was broke. Like brokey-broke-broke.

“I called her six weeks before the meeting, and I hadn't signed up yet. And I'm like, ‘I can't go. There's no money. There's no money.’

“And what she just said was, ‘Well, get to work.’”

Hertel charged the conference to her credit card and says the conference “blew me away.”

“It just changed everything, the whole perspective.

“I was around people the same age as me at that time - this was 12 years ago,

̒If you want to be a better adviser, spend time with better advisers. More often than that, you're going to rise to their level’

so I was early thirties – people that were making so much money, but also having great businesses, being home for dinner every night and not working weekends, and taking eight weeks of vacation a year.” What are some specific things you've picked up from MDRT which have helped you?

“Oh, God. Everything.”

Probably the most influential thing is learning to charge properly for her advice and expertise.

“In the last two years, that shaped the whole direction of my business.”

This year she raised her fees for all new clients.

“People don't value the things that they don't pay for. People that desperately need it do. But I don't do pro bono work for wealthy people anymore.”

She’s done that before and saw people

“MDRT Speaks was the one thing that blew my mind. Here's the top people in the entire business that are getting on in a stage in front of thousands of other top people in the industry - competitors, let's just call us - and sharing their best business secrets.”

This year Hertel, who has been in the business for 16 years, got to be one of the MDRT Speaks presenters.

“It’s a lifetime career achievement. It was the best.”

Make better habits

She says it’s not too hard finding new business and she is out looking all the time.

“There's a famous saying, specifically about the life insurance business, that the reason why successful life insurance agents are successful is because they make a habit of doing things that other

and collect business cards and call them the next day. It's a long game.

“If nothing comes out of it, then I'm still returning money to my community. Exactly how I want it to be.

“I'm a big believer in the law of attraction and all of that that goes with it. And I have found that the more money I give away, the more money comes in.

“The more generous you are, the universe repays you.”

Where do you see your business going in the future?

Hertel wants to build up her comprehensive plans and startup plans. But, like in New Zealand, it’s a challenge finding the right advisers to join her firm.

“I'm worried that my dance card is going to get filled up sooner than later. So, I have to add in the perfect team member who can help take some of that burden off me.

“Because once my dance card fills up, the value we bring goes way down. And so I need to do that beforehand.”

She has experimented with a couple of different ways to find people, such as employing junior agents she found through the same insurance company that she does business with.

“It's really challenging finding someone that's a good match. I want a ‘mini me.’

taking her advice and running with it and doing it themselves.

“If I'm going to spend that amount of time, I'm going to do it for people who truly need us, or the true people that love me, like my family and friends."

She has also picked up the importance of mentoring from MDRT.

“I’m a big believer, and say it all the time: if you want to be better at something, be around people that are better than you.

“If you want to be a happier person, spend time with people that are happier. If you want to be more charitable, spend time with people that are more charitable.

“If you want to be a better adviser, spend time with better advisers. More often than that, you're going to rise to their level.

“MDRT members, for example, are top quality. Previously, I had spent time comparing myself to ‘average’, when in reality, the people that I spend my time with are much higher quality than the average adviser.

“And if the average adviser charges a certain amount in fees, but they only deliver average, I'm not being fair to myself. I should compare myself to my peers - fellow MDRT members - who are far more qualified than the average.”

One of the sessions advisers love is ‘MDRT Speaks’, where around a dozen advisers share business tips in rapid-fire, five-minute presentations.

people don't want to do. Not that they simply do those things, they make them a habit.

“So all those things I struggled with a couple years are just habits to me now. And I'm fortunate enough that I'm really proud of what we've built, that we provide so much value that we get a lot of recommendations. We got a lot of referrals.”

One of the interesting things she has done is decide to stop advertising and replace it strictly with sponsorships.

“We have a charity of the month, and that was an idea from another MDRT member.”

In December, she emails all of her favorite clients.

“They might not be our top clients. They're our favorite clients. And we say, ‘Hi, every month, we want to make a meaningful donation to a great organisation. Can you nominate one and we'll consider it?’

“And I also say in the email, ‘Please tell me why’.

“We don't make charity of the month any organisation that’s against our philosophy.”

While the sponsorships don’t necessarily drive business growth now, she thinks they will over time.

“People are going to see my name more and more. It's not completely altruistic. People will link me with the same causes that are important to them. But I don't go

“I need somebody who, when I go away, can step into my shoes. And so I really want to train on an entry-level starting point, or just above that, and really teach them.”

There’s more to the story

As you may have guessed, there is more to Julianne than just being a financial planner.

Another of her passions is re-homing rescue dogs.

“That's where my heart is.”

So far, she has fostered about 175 dogs. Her favourite kind?

“I want the dogs that are unadoptable.

“I want the dogs that are old, that need some extra help, that are missing some major appendage, like an eye or a leg, or something like that. Pirates and tripods are my favorites.

“I want the dog that people are going to overlook, and we're going to bring them back.”

She also has a goal to visit every continent within the next couple of years. Many, including Antarctica, have already been ticked off. Next is Africa.

Australia and New Zealand will round off this challenge.

After that?

“I haven't figured out yet, but I'm going to do either the Seven Wonders or Seven Modern Wonders.”

“There's always got to be something after that. It's a dream-based life I lead. I want this world to knock my socks off. I want to do it all.” A

̒If I'm going to spend seven hours a day doing something – running a business - which adds stress and complications and things like that, it better be the business I love’

Shining the light financialon abuse

Australian financial planner and MDRT member Amanda Cassar explains how she became aware of financial abuse - and what she’s doing about it.

Amanda Cassar can pinpoint the first time she encountered a case of financial abuse which really shook her.

The story was shared by a woman who had been a successful, award-winning, investigative journalist, but found herself financially and emotionally devastated by her second husband.

“Despite her intelligence and savviness, she ended up losing everything to an abusive relationship.”

The woman, left in the misery of adult epilepsy, needing to scrounge money for her and her daughter's survival, sparked the Queensland-based adviser’s interest in financial abuse.

It was a harsh reality check: fiscal exploitation can happen to anyone, regardless of intelligence or professional accolades.

Fascinated yet horrified by this phenomenon, Cassar decided to turn her first book into a podcast series: “Shining the Light on Financial Abuse.”

Through this platform, she interviewed victims of financial abuse, lawyers specialising in family law and those who help recover money for victims.

Learn to spot the signs

From these conversations, she then

designed a course for financial advisers, creating a pool of specialists who can identify signs of financial abuse and aid those most vulnerable.

Advisers can often miss signs of financial abuse, she says, because they may not ask the right questions, understand the indicators, or see the value they can bring in such cases.

In her view, a couple's dynamic during a consultation, or the fact that an adviser may never meet one-half of a partnership, can serve as red flags that shouldn't be ignored.

She believes financial advisers should always act ethically - and says recognising the signs of financial abuse is an integral part of that responsibility.

Not just an advocate against financial abuse, Cassar is also a champion of financial literacy and a member of the Million Dollar Round Table (MDRT), an organisation which recognises excellence in financial services.

Her membership with MDRT, and her attachment to the Banking and Finance Oath, highlights her commitment to ethical conduct in her business practices. Giving back

Additionally, she has a strong affiliation with Business Chicks, Australia's largest

networking group for women in business. Over the past decade, her involvement with the group has led to her participate in several leadership and immersion programmes with The Hunger Project, in Malawi and India.

These programs, focused on poverty alleviation and education, resonate deeply with Cassar’s belief in selfreliance over handouts.

Aid work wasn't something she initially saw herself doing, especially considering the commitment involved. But a nudge from Business Chicks, and a hard look at her own excuses, led her to leap in, and she hasn't looked back since.

The experiences with the Hunger Project have given her a unique perspective, reinforcing her belief in the importance of giving back.

Celebrating her tenth year as a member of MDRT, Cassar remains committed to using her skills and knowledge to help others.

Her work is proof to the deep impact financial advisers can have, not only in growing wealth but also in protecting and educating clients, raising awareness of financial abuse, and ultimately making a difference in people's lives. A

̒Despite her intelligence and savviness, she ended up losing everything to an abusive relationship’

Olivia Clements got her first taste of sexism in the financial services sector at the tender age of 18.

Fresh out of school, she applied for an entry-level banking job at ASB in her hometown of Whangarei.

At the conclusion of the interview, Clements was told that if the manager could employ her based on looks, he would do so. But otherwise he didn't see much of an opportunity for her in banking.

“Looking back, I'm sure that comment was made out of ignorance rather than malice,” Clements says. “But it did stick with me.

“After I joined the same bank in

Awoman’s place

Adviser and business-owner Olivia Clements says the advice industry is a great space for women, despite the presence of a few bad eggs amongst male clients and colleagues

BY JENNI MCMANUS

Auckland, a year later I received the ‘super achiever’ award for my region and got up on stage and shook hands with the CEO.

“After I came down, I saw the same manager who first interviewed me and got to say ‘Hello, remember me?’ And that was an awesome feeling.”

Fast-forward nearly 20 years and Clements, after eight years in banking as a teller, personal banker and mobile insurance manager, is now an adviser with her own business, LiveLife Insurance, set up in September 2013. Her primary focus is insurance, but she’s also qualified to advise on KiwiSaver and other investments.

A rare species

As a woman, however, Clements is still a relative rarity in her industry.

According to the Financial Markets Authority’s statistics, women make up only 28% of all financial advisers. And, as the sector itself has been pointing out recently, women in general are woefully underinsured when compared with men.

Research from the Financial Services Council reveals that compared with men, women have lower sums insured of between 14% and 28%, particularly in the areas of trauma, life and income protection cover.

Women also have a higher number of income protection claims, Clements says.

She believes the reason for female underinsurance is a combination of cost and ignorance: she still hears people saying ACC will look after them or family members will step up.

“And that’s when I ask, ‘Well, have you discussed this with your family?’ Because they might have a completely different idea.”

As a minimum, Clements recommends mortgage and income protection cover.

“Without the ability to earn a living, you will no longer be able to pay for that car insurance, the house insurance, the dayto-day things. Because the car is tangible, people can see that, but they forget that their most valuable asset is their ability to earn.

“It’s about getting in front of them, having the conversation and finding out what’s important and what would happen if they lost their income.”

Marathon not a sprint

Now aged 36, with a husband and an 18-month-old son, Clements says she has learned to pace herself. Like most small business owners, she worked long hours for the first few years – sometimes up to 75 a week – to get LiveLife off the ground.

“My first year was self-marketing among friends and family and building my client base through my personal network,” she says.

“It was fantastic to have agencies with a number of insurers rather than be tied to one. I could immediately see the value this added to clients, being able to recommend a provider based on individual needs and goals.”

The business has grown organically through referrals, and from buying client bases from advisers exiting the life industry.

“Early on, I was fortunate to build relationships with a handful of incredible business partners I still work with, who are masters in their field of mortgages. The majority of my business since is referral-based, both from advisers and client referrals.”

And she has taken on another adviser, Alexandra Hockenhull, who, Clements says, has the three key qualities needed in an adviser: empathy, integrity and resilience.

Initially, alongside her adviser work, Clements also did all the administration herself.

“The challenge was learning to delegate and let go and trust someone with my clients.

“Who would care for them with the same level I did? But something had to change as I was on a fast road to burnout.

“A fantastic speaker at 2016 MDRT Vancouver changed my perspective and gave me the much-needed push to bring in administrative help.

“Any reservations I had quickly diminished; I’m blessed with amazing support, which has allowed me to focus on advising and my strengths.”

Lewd comments

Not surprisingly, Clements’ teenage encounter with the bank manager in Whangarei hasn’t been her only brush with misogyny in the financial services industry.

When Good Returns published a story on the subject on July 15 this year, she was quick to respond with tales of lived experience: lewd comments and unwanted sexual advances from male advisers and clients; having to tell someone where she was going for safety

his money had been stolen. He asked if she could lend him some money until the police could sort matters out.

“I couldn’t imagine someone I knew or worked with would make this up,” Clements says. “I transferred the adviser some money, with the promise it would be repaid within the week.

“Not a sizable amount, but I never considered I would be duped. I never saw the money again. I put that down to naivety and a life lesson and moved on.”

Four years later, in 2020, Clements realised the man had left mortgages and joined the insurance industry. Worse, and inexplicably, he had set up a new company and registered it as LiveLife.

“While imitation is supposed to be the ultimate flattery… it actually creeped me out.”

Fortunately, Clements had had the foresight to trademark LiveLife in 2013. But because the man refused to change his company name, she had to get her lawyers involved.

A ‘cease and desist’ letter did the trick, and, better still, her lawyers persuaded the adviser to repay the money he had borrowed from her four years earlier.

“I actually saw him at a conference not long ago, and he just stood there and stared at me…. It is unnerving to think advisers with this level of integrity operate in our industry.”

Boundaries for bad eggs

reasons before visiting certain clients; and being asked whose PA she was during her first overseas conference in Rome (and enduring “smart-arse” remarks and rudeness when she corrected him).

“These are unacceptable situations, which, if someone was not resilient, would make it difficult to continue in any industry,” she said.

Clements recalls a bizarre meeting at a client’s home, where the man asked if she had a partner. When she said yes, he picked up his newspaper and started reading, completely ignoring her until she left.

More worrying, however, was the mortgage adviser who wanted to meet her in a carpark to pass on details about a prospective client. She extricated herself from the situation, boundaries were put in place, and it was business as usual for a while.

But a year later, Clements received a distressed phone call and multiple messages from the man, who claimed he’d been badly beaten at an ATM and all

Nowadays, Clements says she has no problem dealing with misogyny or unwanted attention, putting boundaries in place or quickly removing herself from situations if she feels uncomfortable.

Post-covid, she works largely remotely, so harassment issues are less likely to arise.

And, she says, there is now much less sexual harassment in the industry.

“The majority of advisers are wonderful, but there are still a few bad eggs out there.”

Despite them, Clements says the advice business is a great job for a woman and she’d love to see more women join the industry.

“So much of our role is just listening. We are often one of the first points of contact after a client suffers a traumatic life event.

“Studies have shown no matter where in the world, whatever the cultural or family influences, women in general are better at empathising with other people than men.

“This is a relationship business. Empathy is a key attribute for an adviser and female advisers have this natural advantage.” A

̒The majority of advisers are wonderful, but there are still a few bad eggs out there’

̒Empathy is a key attribute for an adviser and female advisers have this natural advantage’

The coming of age of the Cash Fund

What is a cash fund?

Cash funds have often been overlooked in favour of single issuer options like rolling term deposits and cash management accounts. However, with often better tax treatment, higher yields, and reduced risk from single-name concentration, they warrant serious consideration.

A Brief History of Cash Funds and PIE

Since the introduction of portfolio investment entities (PIE) in 2007, there has been almost no better time than the present to contemplate a cash fund as a viable alternative to term deposits or cash management accounts (CMAs).

Soon after the PIE scheme came into effect, interest rates collapsed due to the global financial crisis, undermining their tax advantages. In the aftermath,

rates remained low and bank capital regulations encouraged banks to pay higher rates on retail term deposits than from wholesale channels.

COVID then took rates to almost zero and the advantage of better tax treatment could often be less than the portfolio management fees. However, since 2022, as interest rates began to rise steeply and banks have had no compelling need to offer high term deposit rates, cash funds have come of age.

Higher expected after-tax yield than a 3-Month Term Deposit

At the time of writing, most cash funds in New Zealand are benchmarked to a 90-day bank bill index, yielding approximately 5.6%.

Similarly, the highest interest rate for a 3-month bank term deposit stands at around 4.8% (* as per Interest.co.nz on

August 29th, 2023).

Assuming a fund manager can achieve the index return whilst charging a management fee of 0.25%, we can compare the after-tax annualised yields for an investor subject to a 39% tax rate on their term deposit and a 28% PIR on their cash fund investment:

Nett Yield from a 3-month term deposit at 4.80%

2.93% [ 4.80 * (1 - 0.39) ]

Nett Yield from a cash fund after accounting for fees

3.85% [ (5.60 - 0.25) * (1 - 0.28) ]

Liquidity

While term deposits generally offer higher rates than cash management accounts, they are locked until maturity, with early access potentially incurring costs or being entirely inaccessible. In contrast, cash funds, though not as liquid as CMAs, offer high accessibility, with funds usually attainable within several days.

Risk Profile

Clearly all bank deposits are not of equivalent risk, and equally neither are all cash funds.

Referring to the RBNZ website to compare credit ratings, they state that a AA rated entity has a 1 in 300 chance of default over a 5 year period as compared to a BBB that has a 1 in 30 chance of default over the same period.

Accordingly, a term deposit or CMA typically offers a better credit risk than a

Kernel Cash Plus Fund

Attractive positive return

cash fund.

However, a diversified Cash Fund mitigates against the single-name risk associated with CMAs and Term Deposits.

Why consider a cash fund?

When evaluating tools for addressing clients' income requirements, advisors now have a variety of choices at their disposal –CMAs, term deposits, notice saver accounts, fixed income investments and naturally, Cash Funds. Each option possesses its own advantages and associated risks. A Cash Fund combines favourable attributes of these short-term cash tools – including liquidity, diversification, sometimes elevated yields, and advantageous tax treatments.

In the prevailing landscape, an opening exists to showcase the value advisors can provide to their clients. This involves

ensuring that all segments of their portfolio are finely tuned to match the conditions, their specific needs, and their individual tax circumstances.

Introducing the Kernel Cash Plus Fund

This fund is actively managed. Since its inception on 7th November 22, until 28th August 23, it has returned 4.50% after fees but before tax. Over the same period, the Bloomberg 90-day bank bill index returned 4.05%. As at the 28th August 2023, the fund investments have a net yield to maturity of 6.04% after deducting Kernel's fee of 0.25%.

About the author: Matthew Winton manages the Kernel fixed income portfolios. Prior to Kernel he was a fixed income desk head for BNP Paribas in London responsible for trading USD interest rate derivatives and US Treasuries.

Aims to achieve returns comparable to the Bloomberg NZ Bond Bank Bill Index.

Convenient and liquid

No need to open a bank account or seek out honeymoon rates or lock into long term deposit periods to earn an attractive return.

Why use the Kernel Cash Plus fund?

Risk Mitigation

Unlike equities or bonds the fund’s capital value will be maintained with a very high probability.

Short term fixed interest investment

Invest in a diversified portfolio of cash and fixed interest investments.

This fund is designed as a convenient way to store wealth and earn attractive income with minimal capital risk compared to most other types of investments, such as equities and bonds. Investors benefit from Kernel’s low fees in a tax efficient, multi-rate PIE, investment structure.

Why Kernel?

Kernel aims to deliver optimised returns for investors by providing low fees with investment operational excellence. The management fee on the Kernel Cash Plus fund is 0.25%. Find out more about the fund, including risks, at kernelwealth.co.nz/funds/ kernel-cash-plus-fund.

The

at www.kernelwealth.co.nz.

information is not investment advice. Past performance is no indicator of future returns. Kernel has taken reasonable steps to ensure that the information in this document is accurate and up to date. Kernel does not accept any responsibility for any error or omission or for any loss resulting from the use of this information, except to the extent required by law. For more information on the risks and features of the Fund, please refer to the Product Disclosure Statement

Global bonds at a gallop, but don’t wear blinkers

Global share markets got off to a roaring start this year, but investors are warned: ignore fixed-interest at your peril.

BY JENNY RUTH

If history is any guide, global bonds may be about to go on a tear, but fixed-interest fund managers warn it's unlikely to be plain sailing.

Ashley Gardyne, chief investment officer at Fisher Funds Management, says the roaring start to 2023 for global share markets may have meant investors overlooking fixed-income marketsbut they probably should start paying attention.

Year to date, the performance isn't impressive, with global bonds gaining only 2% as of early August after falling 16% last year, and positively anaemic against the 21% jump in US stocks and 11% gain in emerging markets.

Even the benchmark S&P/NZX 50 Index managed to beat bonds with a 2.8% gain as of August 15.

“On top of the starting yield being the most attractive in a decade, there is plenty of evidence to suggest that periods of lousy returns in the bond market are typically followed by much higher returns in the next three years,” Gardyne says in Fisher's latest newsletter.

He refers back to the early 1980s, when the Federal Reserve hiked its official interest rate to 20% to rein in galloping inflation.

“Inflation started to subside in 1981 and 1982 but interest rates remained high, as the Fed wasn't willing to let up on interest rate hikes,” he says.

“From the mid-1980s to the mid-1990s, fixed-income returns not only benefited

from starting yields that far outstripped inflation, but they also delivered capital gains as interest rates eventually fell and bond prices rallied.”

The outcome then was that in the three years ended 1986, US bonds delivered returns of 17% a year and 180%, or 11% a year, in the decade ended 1993.

Yields at decade highs

Of course, yields now are nowhere near 1980 levels, but Gardyne says similar dynamics are at play.

“Yields are at decade highs, just as inflation is starting to subside. Should inflation continue to fall and central banks eventually cut interest rates, bonds could be in for a strong multi-year run,” he says.

“Even if central banks don't cut rates, far better returns are likely for fixedincome investors, given current yields.”

Gardyne notes the running yield on the Fisher Funds Income Fund was about 7.4% in early August, up from 3% in 2020.

But he isn't recommending investors put all their money into bonds: Fisher's balanced funds still follow the 60% equities/40% fixed interest rule-ofthumb, he says.

“We think for a lot of investors, you still need that mix,” Gardyne told Good Returns.

“But there are some people who just aren't comfortable with equities. For someone with different risk profiles and who may not be a big fan of equities,

fixed-income markets look a lot more attractive [than they have since the GFC].

“Now, a retiree could look at a portfolio of fixed income and make a good income out of that. That just wasn't possible two years ago.”

The S&P/NZX NZ Government Bond Index was yielding 5.06% in mid-August and the investment-grade corporate bond index was yielding 6.05%.

Inflation up or down the key

“That is looking very interesting from our point of view,” says Marek Krzeczkowski, portfolio manager of multi-asset class funds at Mint Asset Management, who is also responsible for Strategic and Tactical Asset Allocation.

“Inflation is still high – it's all down to what you expect with inflation. We're definitely seeing inflation is trending lower; it has been pretty much globally over the last six months,” Krzeczkowski says.

On top of that, China is now experiencing deflation: its consumer prices index fell 0.3% in July from a year earlier, while its producer prices index fell 4.4%, suggesting consumer prices have further to fall.

Krzeczkowski says import prices from China into the US in the last three months were down about 5% in the last three months.

“That's a big influence from China, exporting that deflation to other countries. Our view is that inflation will

̒Even if central banks don't cut rates, far better returns are likely for fixed-income investors, given current yields’ Ashley Gardyne

come down quite significantly over the next six months.

“If inflation comes back to 3%, that will give you a good return.”

Economists aren't so sure that will be the case in NZ, with both ANZ and Westpac expecting the Reserve Bank to have to lift its official cash rate (OCR) from 5.5% to 5.75% before Christmas.

Inflation stood at 6% at the end of June and the next reading for the September quarter won't be released until October 17.

Hamish Pepper, Harbour Asset Management's director of fixed interest, points to the Reserve Bank's latest survey of expectations, which shows forecasters, economists and industry leaders expect inflation will be down to 4.17% by September next year and to 2.83% a year later.

That points to real returns from fixed interest being positive after inflation, given where yields are currently.

“Obviously, there are arguments as to

how positive those real returns might be,” Pepper says.

But one way to protect against inflation outcomes, whatever they are, is to buy inflation-indexed bonds, which are currently paying real returns between 2.1% and 2.8%, he says.

Supply up = yields up

One reason to expect bond yields to hold up at, or above, current levels is that increasingly indebted governments around the world, including the US and New Zealand, is going to mean an increasing supply of treasuries and local bonds - and increasing the supply of anything tends to depress prices and would therefore boost yields.

In New Zealand, the Government plans to have sold $34 billion in new bonds by June next year and another $86 billion in the three years ended June 2027although that could change if the National

Party leads the next government.

Central banks around the world are also selling down the bonds they bought through their money-printing programmes, and that's adding to the supply issue – our own Reserve Bank is selling back to Treasury about $415 million every month of the $55 billion in bonds it bought under its programme.

There are also other issues in the US, such as international ratings agency Fitch cutting its US sovereign rating early in August to “AA+” from “AAA”, despite the US debt-ceiling crisis being resolved two months earlier.

As yet, however, there's no sign that the US market is losing its safe-haven status for international investors.

But Pepper also points to the Bank of Japan deciding to widen its yield curve control policy, essentially allowing slightly more attractive yields on domestic bonds, making it likely that Japanese investors, who are the single largest block of investors in US Treasuries, will repatriate money.

Harbour is giving a nod to the economists, pencilling in a chance of another OCR hike in November - but then it isn't expecting any change to the OCR for another 12 months.

Fixed income director at Harbour, Mark Brown, points out the tax advantage for investors of using the Portfolio Investment Entity (PIE) regime, particularly for those with tax rates above the PIE rate of 28%, rather than investing in bonds or term deposits directly and being taxed at 33% or 39%.

For those on the 39% rate, investing in a PIE increases the return by about 0.5%, Brown says.

PIE investors also get the benefit of much greater diversification than most individual investors can achieve through direct investment.

̒The banks are making heaps of money, and even though we're in a recession they're in pretty good shape’

Fergus McDonald

Locking in current yields

At the moment, Brown says he's focusing on trying to lock in current yields for as long as possible.

While fixed interest for the last few years has been “really awful” - the worst returns in his 30 years as a bonds manager - a saving grace has been Harbour's investment in inflation-indexed bonds on which the effective yield has been as high as 9%.

Another strategy Harbour has been using has been to buy the bonds New Zealand banks have issued overseas and hedge them back to New Zealand dollars.

As many investors have been doing in the last few years, Harbour has included equities in its income fund - typically, property stocks and shares in the gentailers, whose share prices tend to be less volatile than the rest of the market while providing stable income streams.

But, given the rise in stock prices of the gentailers, “it's hard to see strong returns coming from those stocks” now, says Brown.

Harbour did manage to beat its benchmark in 2022: “We actually had the most successful period ever, relative to the benchmarks, but that doesn't turn a negative return into a positive return.”

Brown says he currently likes the bonds issued by local listed property companies on which the margins to government bonds have widened considerably.

Partly that's reflecting the negative sentiment towards the commercial property market in the US infecting sentiment locally.

“They don't seem to be under the same stress here, and gearing is low, typically 30% to 40%, which we think is manageable for those companies.”

Brown is more wary about the private credit market.

“There are some opportunities in those areas but they're ones that you've got to be a bit careful of. You've got to do your research. Part of it is doing your research and understanding what's cheap and what's not.”

Fergus McDonald, head of fixed income at Nikko Asset Management, notes that a couple of years ago, the yields on Nikko's cash and bond funds were close to 1% but are now a little above 6%.

and-a-half years, which he says was very popular.

“The banks are making heaps of money, and even though we're in a recession they're in pretty good shape.”

Such issues are giving people the opportunity to lock in such relatively high yields.

No more OCR hikes?

McDonald thinks the economists are wrong and the Reserve Bank won't be hiking the OCR again.

“We think pretty much the Reserve Bank has run its race as far as putting the cash rate up. We think rates are as high as they're going to be.”

Nevertheless, Nikko still has “more ammunition” if its guess is wrong and yields climb further.

The market's focus is now likely to shift to when the central bank will begin cutting the OCR, although he doesn't expect that will happen this year.

McDonald agrees with Brown that the game now is to lengthen duration to lock in current rates.

“If you can live with those income levels of 5.5% and 6%, the opportunity is to lock into those levels for a reasonable time period.”

He also doesn't favour private credit currently.

“If you've been lucky enough not to have a mortgage and have money in the bank, you've had a 500% pay increase!” McDonald says.

The search for yield when interest rates were so low was one reason asset prices rose so much after Covid hit, but those who need an income can again get it from “relatively steady assets,” he says.

McDonald pointed to Westpac's sale in early August of $600 million of subordinated notes that achieved an annual yield of $6.73% for the first five-

“The environment for direct lending has become more risky. The risk/reward has moved in favour of those with quality assets that you don't have to lose sleep over.”

Jenny Ruth has written for BusinessDesk, National Business Review, The Independent Business Weekly, Radio New Zealand, Bloomberg, the Sunday Star Times and Australian Associated Press. In 2018, she won the NZ Shareholders' Association's Business Journalist of the Year award. A

̒Should inflation continue to fall and central banks eventually cut interest rates, bonds could be in for a strong multi-year run ’

Ashley Gardyne

̒Now, a retiree could look at a portfolio of fixed income and make a good income out of that. That just wasn't possible two years ago’

Ashley Gardyne

Fund manager diversification: the key to unlocking better risk-adjusted returns in KiwiSaver

The government established the NZ Superannuation Fund and KiwiSaver in the first decade of the 21st century to ease the respective fiscal and personal costs of retirement projected for an aging population in the years ahead.

Yet while both the now $65 billion NZ Super fund and KiwiSaver, which just clocked the $100 billion barrier, share common goals, the government of the day set almost completely opposite investment rules for the two retirement savings regimes.

NZ Super was given a free hand to use

multiple underling fund managers – with a current roster of about 50 – while KiwiSaver members are restricted to using just one scheme.

In general, the single-scheme model limits KiwiSaver members to just one manager’s set of funds, which leaves New Zealanders’ retirement savings exposed to a risk that NZ Super and most other global pension funds studiously avoid.

Single-manager risk represents a significant threat to the long-term health of KiwiSaver portfolios that few, if any, members truly appreciate, given that

the higher odds of selecting the ‘wrong’ manager could see investors exposed to funds that persistently underperform the market or peers.

Each manager has their own specialisation and/or biases when it comes to investing styles, which explains the different performance outcomes over time: who’s to say that the approach favoured by any one manager will always prevail in all market cycles?

Professional asset-owners like pensions funds intuitively understand the risk-mitigation benefits of investing across multiple managers. These benefits

become more pronounced as asset balances become larger – as is the case with KiwiSaver, now in Year 16 or the age New Zealanders can first get a driver licence.

And like any new driver to the road, there’s plenty of danger to be wary of for novice KiwiSaver investors. Fortunately, by taking a lesson from the experienced hands over at the NZ Super Fund, KiwiSaver members can benefit from an additional layer of diversification to generate better risk-adjusted returns.

Multi-manager investing: the third dimension of diversification

Most investors will be familiar with the concept of diversification both between asset classes and among securities within each asset class as the primary way to manage investment risk.

The same diversification principle can be applied to fund managers as well, as the performance of any one manager can often differ significantly from their peers, even if they operate within the same asset class or utilise similar investing approaches.

For example, a Russell Investments study found that the difference in the 10year performance between a top- versus bottom-performing global equities manager was around 5.7% per annum. While the difference between a bottom manager and a median manager was around 2.7% per annum.

Compounded over 10 years these annual return differences could mean an opportunity cost of a 30% lower KiwiSaver balance for selecting a bottom-performing single manager compared to investing in an average manager and a 70% differential as measured against the best-performing managers.

Of course, the potential for a 70% swing in gains may sound enticing to some investors, but picking the single best-performing manager is no easy feat and it also comes with the added risk of inadvertently selecting a manager that ends up at the bottom of the pack.

However, securing a median level of returns (and the associated 30% or more uplift versus a bottom-performing option) is not only readily achievable with a multi-manager approach but, in fact, can be done with a lower level of risk as well.

Investors who select multiple managers within the same asset class

or investing style will naturally achieve a blended average return – one that smooths out any outlier manager performance.

By definition, the distribution of returns for the multi-manager options would have a lower dispersion (volatility) of returns due to this smoothing effect while still performing in line with the average of the individual managers.

In short, the multi-manager approach enables investors to garner greater riskadjusted returns than one fund manager alone can deliver.

While using several managers should see KiwiSaver investors avoiding the low point in the cycle, the trade-off means they also miss out on the spectacular highs when one investment options ‘shoots the lights out’ in the short term: this is not a drawback of diversification but a design feature as it applies the same risk-mitigation principles used by managers to negate the effects of concentrated single stock positions.

For example, if an investor had been exposed to only Tesla stock, then they would’ve enjoyed over 100% of gains so far this year – great stuff! But this same Tesla stock had also dropped by 65% in 2022 alone.

Most investors would likely be comfortable giving up the super-highs of any one concentrated position to be insulated from the ultra-lows. This is what diversification sets out to achieve – a more median-range return with less risk, leading to overall more consistent investment outcomes.

But with the design flaw in traditional schemes largely limiting investment to a single manager, how can advisers provide their KiwiSaver clients with the benefits of manager diversification?

Unleashing the power of ‘and’ with the InvestNow KiwiSaver Scheme

The InvestNow Scheme was specifically built to side-step KiwiSaver’s biggest problem by providing access to 15 leading fund managers across 40 investment options – including diversified, single sector, ethical, active and passive solutions – all in one easy-touse platform.

“Advisers have really latched on to the power of ‘and’,” says Jason Choy, InvestNow Senior Portfolio Manager. “Their customers can now have investments from multiple managers in their KiwiSaver portfolio – for example

Milford and Fisher and Pathfinder. There is no longer the need to have all their eggs in one basket, hoping to have selected the single-best manager for their needs.”

InvestNow’s clever innovation means that Advisers can uniquely provide the value-added benefits of fund manager diversification to any of their clients. Unlike other KiwiSaver wrap solutions – which largely incur significant administration and transaction-based costs or require substantial minimum balances to join – InvestNow offers a comprehensive menu of investments at zero additional cost and no account size threshold.

Instead, members simply pay the headline fees of their selected funds – with investment options like the lowcost Foundation Series Funds offering investment options with management fees starting at just 0.03% per annum.

InvestNow’s focus on providing better client outcomes by offering greater choice and flexibility, all within a cost-effective medium has proven popular with advisers and end-investors alike. The InvestNow Scheme is one of the fastest-growing schemes in the KiwiSaver market, doubling in size over the past year alone.

The InvestNow KiwiSaver Scheme was also designed to be adviser-friendly with a simple and transparent client fee-charging mechanism. Advisers can charge annual advice fees of up to 50 basis points, which are negotiated directly with clients and administered by InvestNow to ensure they are taxdeductible for clients, administratively simple for advisers, and regulatorycompliant.

InvestNow, too, takes care of all the complex KiwiSaver compliance and disclosure duties, freeing up advisers from regulatory paperwork to spend more time on what they do best –solving their clients’ individual financial problems. A

Learn more about the InvestNow KiwiSaver Scheme at investnow.co.nz/ kiwisaver-betterfutures

FundRock NZ Ltd is the issuer of the InvestNow KiwiSaver Scheme and Foundation Series Funds. Product Disclosure Statements are available at www.investnow.co.nz

Spotlight on New Zealand’s life insurance gender gap

The persistent gender gap in life insurance in New Zealand can be observed through two major metrics.

One is that women are heavily underrepresented in the advisory industry: according to the Financial Markets Authority (FMA), as of June 2021, women make up around 28% of financial advisers in New Zealand.

The other - likely a consequence of the first, at least in part - is that in an overall underinsured nation (per Financial Services Council research), women have significantly less cover, with between 14 and 25 percent lower sums insured than men for trauma, life, and income protection insurance.

Gemma Vivian, General Manager Adviser Engagement Distribution at Partners Life, knew nothing about insurance when she started working in the field nearly 14 years ago.

“Back then, Naomi [Ballantyne] was one of the only female CEOs. If you put on a women’s event, there were about 15 women on the invite list as they were really the only ones in the industry.

“When I joined the BDM team six years ago, there were only two women - and now half our team of 15 is female.

“What I’d like to see, though, is more women - especially younger women - in the field as insurance advisers, as they play a huge role in education and wield massive power for change.”

She notes that anecdotally just around a third of those who have income protection with Partners Life are women.

Sharp suit not required

A common misconception, Vivian says, is that working in the world of insurance requires a sharp suit and a mathematical mind.

“You’re not in the financial services industry, you’re in the people industry. You’re changing people’s lives.

“The more diversity of thought we have, the more people are represented and the closer we all come to seeing more equal insurance protection across gender and ethnicity.”

The comparatively low profile of women in the advisory sector arguably

contributes to lesser awareness of what insurance can do - even among people who do hold policies.

Raelene Rees, a self-employed chartered accountant, has had extensive cover for herself, her family, and her accountancy practice for many years, and for the past two decades has used the services of her friend and one of the industry's top female advisers, Steph Wiki.

When she switched to Wiki from her previous adviser, Rees says it was a relief to have someone in charge of the insurance cover who knew the family “and had our back.”

“I fell off my bike and broke my pelvis and was telling Steph I was on crutches.

“She said, ‘You can claim for that.’ I would have had no idea otherwise; insurance not being front of mind, I never considered being able to claim."

Though her professional background meant the claims process was not daunting, it is telling that the strength of Rees’ relationship with her advisermentioning in a casual chat that she'd had an accident - was the necessary trigger for a claim.

Financially savvy: start early

Rees has ideas for how to improve New Zealand’s woeful stats around personal insurance.

"I think when someone starts their job, takes out KiwiSaver, they should also take out insurance. Get good habits early on.

“I have never understood why so few people have trauma cover when the risk of trauma is so high."

Cheryl Bowie, director and executive coach at Mind Coach, also works with Steph Wiki and says she selected her for her experience, credibility, and rapport, having used a different adviser previously.

In terms of specific advice about issues she hadn't been aware of, Bowie says, "Steph did an amazing job of finding a way to get more cover for pre-existing conditions that no longer existed, or risk factors which felt, in my mind, really unfair to be penalised for.

"I feel very strongly that there needs to

be more financial literacy in our school curriculum, especially targeting girls and young women so they are empowered to have the choices later in their lives that financial literacy and savvy affords."

More women advisers needed

What can the industry, and wider society, do about this gender gap across pay, insurance, and even KiwiSaver inequalities, where data gathered by Te Ara Ahunga Ora, the Retirement Commission, shows the average balance for a woman is 20 percent lower than that of a man?

Encouraging more women into the advisory space to offer guidance to people who can relate to them is a start.

Gemma Vivian points out that insurance advisers have the flexibility to get out what they put in. For women who are looking after young children, for example, the hours are flexible, and bringing your authentic self to meetings – many of which now take place online –actually attracts clients.

“Dealing with rejection is also a big part of the job, and so is the tenacity it takes to make approaches and seek connections to people who could be helped.

“Confidence plays a role in this, and this is an area where the vocabulary should be more inclusive of young girls, whose view of the world and their place in it is being critically shaped at a younger age with the modern connectivity we now have.”

The team at Partners Life sees that closing the gender pay gap, and properly calculating the value of all work done by women, whether inside or outside the home, translates to more equitable insurance outcomes.

The difference in the sums insured between men and women exists in part because men earn more than women on average, so they have a higher income to replace in the event of their death or inability to work. A

Information is current at the time of publication. The opinions expressed do not constitute and should not be viewed as financial or other advice.

No longer a one-way bet

Arecent Goodreturns article titled ‘annus horribilis’ caught my eye and made me ponder.

Being a shareholder in a funds management firm was once seen as the easy way to generate wealthoften significant amounts of it - but looking at the track record of the fund industry across Australasia, this no longer appears to be the case.

This issue has broader relevance, as the owners of four of the largest funds management operations in New Zealand - the four large ‘high street’ banks - have signalled they wish to exit from funds management such as their Australianbased parents have done already.

Several of the larger privately owned fund managers have also signalled an intention to one day list on the local stock exchange so their shareholders have an exit strategy.

It’s a competitive industry

Once seen as an industry where all participants were locked in to neverending funds under management and revenue growth, funds management in reality is like all other industries.

It’s competitive. Its products are in the public domain. And customers take the leave-or-don’t-go-there option if their products aren’t delivering to expectation.

So while compulsory superannuation in Australia and KiwiSaver in New Zealand has boosted overall industry growth in funds and revenues within the industry, there are winners and losers.

Looking for examples of across the Tasman of winners to ‘losers’ from a shareholder perspective, the experiences in recent years of Magellan and Platinum’s shareholders has been pretty grim.

Both groups grew from start-ups, had ‘active’ investment approaches,

invested very successfully, primarily in international shares, grew funds under management rapidly on the back of great fund performances, and had listed their funds management companies on the ASX.

However the shine has come off their fund performances in recent years.

Platinum’s flagship international fund, while having great relative performance since inception, has materially underperformed its benchmark over the last three, five and ten years.

Platinum clients have voted with their ‘redemption’ buttons, with funds under management falling 33% over the last five years and the share price of the

What we can learn

The take-outs from these examples appear to be:

1 yesterday’s successful active managers aren’t always tomorrow’s 2 if performance doesn’t sustain, many of those customers attracted by yesteryear’s success will leave 3 this leads to declining business revenues, profitability and share prices

Having been involved in leading and selecting active fund managers, I am fully aware it’s as challenging to identify tomorrow’s outperformers as it is to know when to bail from yesterday’s successful managers.

So being a shareholder in an active fund manager not only carries the risk that excess performance is not sustained by the investment team, but also this loss in performance can lead to material and permanent downside in business value.

management company falling 72% over the five years to mid-August 2023.

Similarly the Magellan experience. Their decline from favour has been more recent than Platinum’s.

Magellan’s international fund has underperformed its benchmark over the last three and five years, with their funds under management declining by 43% over the last five years.

The Magellan management company’s share price has in similar pattern fallen 63% in the five years to mid-August 2023.

Goodreturn’s recent article on the business trends in some New Zealandbased fund managers highlighted a similar pattern of volatility in funds under management and profit volatility, but no links were made in this article with trends in some of those managers’ fund performances.

The fund groups mentioned in the article were:

• all active managers

• privately owned

• often developing tied (internal) adviser teams

• and often had performance fees

Five of the six had KiwiSaver offerings.

The question in my mind was this: is there a similar correlation for these New Zealand fund groups between their

Being a shareholder in a funds management firm was once seen as an easy way to create wealth, but, as David van Schaardenburg explains, this no longer appears to be the case.

‘It’s as challenging to identify tomorrow’s outperformers as it is to know when to bail from yesterday’s successful managers’

investment performances and their funds under management/business revenues?

As an indicator of their investment performance, I used each manager’s KiwiSaver growth fund (where they had a KiwiSaver offering) short and medium term returns as a proxy for customer outcomes. In other words, are they doing a good job for clients?

Then I looked at their investment management revenues between 2020 and most recent, stripping out fund manager performance fees to focus on trends in base management fees only.

Fund performance is not the sole factor determining fund manager business health, but the Australian example above shows it can be very influential.

As an indicator for near-term future business trends, three of these fund managers had above-average performances in the last 12 months and five years – Milford, Fisher Funds, Generate - probably boding well for a continuation of their business value growth, while two others lagged, one materially so in the last 12 months.

Business growth rate

Has the variation in customer outcomes influenced their business growth rates?

Yes and not so much. The three groups above have increased base revenues over the last three financial years by between 60 and over 100%.

One performance lagger still had over 50% fee growth, while the material lagger only grew base-fee revenues by 21% over three years.

Over the same three-year period, KiwiSaver market share growth (source Morningstar) has been material at Generate and Milford, static at Fishers, and minimal at the two performance laggards.

Not conclusive, but this small survey still strongly indicates that the clients of the New Zealand funds management industry, including KiwiSaver and their financial advisers, are more often placing their funds with managers who are performing relatively well over the medium term, and steering away from performance laggards. I

guess the reward for a job well done.

This is influencing the relative business growth rates of the fund managers, both short and medium term.

So while no New Zealand-based fund manager is yet listed on the NZX, should this occur, prospective investors should carefully consider the experiences of offshore-listed fund managers and the business risks derived from the relative fund performance outcomes generated by their investment teams. A

David van Schaardenburg is independent of any KiwiSaver/fund provider and is CEO of the Ignite adviser network, which has over 10,000 investing clients.

‘Being a shareholder in a funds management firm was once seen as the easy way to generate wealth – often significant amounts of it – but… this no longer appears to be the case’

Only the good die young Too many of

America is a large, rich country with many advantages, yet compared to other rich countries –and even many poorer countries – far too many people die far too soon.

Gun deaths, workplace deaths and an epidemic of fentanyl deaths have contributed to a decline in America’s performance on a life-expectancy measure - from near the average in 1980, to dead last at about 76 years by 2021.

The gap to the average life expectancy of eleven similarly wealthy countries is about six years. Contrasted with the best country, it is about eight years worse.

Death rate debate difficult

Like in many countries, the debate on the causes of this problem seems particularly hard to have.

No one likes to dwell on their faults.

Comparisons with China, where life expectancy may have recently overtaken that of the United States, may bring questions about the quality of data from the communist country.

Comparisons with Europe often elicit comments about the supposed ‘decline’ of Europe.

Any discussion on specific causes which relate to other politicised subjects can end up similarly dismissed.

For example, right-wing talk-show

host Tucker Carlson characterises the opioid epidemic more as a problem with Mexico, where much of the illegal supply of the drug comes from, than as an addiction problem with a public health solution.

Maternal mortality is closely linked to the provision of good obstetric care, which is closely correlated with access to abortion – the better women’s access to contraception and abortion, the better maternal mortality tends to be as well.

But we die later, right?

We might smugly compare the US life expectancy to New Zealand’s, which is about 82 years at birth: almost exactly the average of the eleven mostly rich countries in the study mentioned above.

Back in 1980, it was 73 years. That’s a good improvement we can be proud of, current problems with our health service notwithstanding.

We’re a small country and we spend a lot less on health than the US does: our spend as a proportion of Gross Domestic Product is about 10-12%; the US spends over 17%, while Australia spends a little less than us.

We get good value from the health expenditure we make.

Having a national health service which is extended free, or at least cheaply, to everyone clearly helps life expectancy.

The level of deaths due to gun violence is of course appalling, as is America’s access to guns, but try convincing Americans of that.

Life expectancy has worsened in recent years, largely due to the opioid epidemic, increasing gun violence and, more recently, deaths due to the Covid-19 pandemic.

In the United States, Covid-19 knocked two years off life expectancy – whereas in peer countries the effect was to reduce life expectancy by just two months.

Some countries have a larger private role (Australia and France) and some have less (the UK). But all the countries with this feature of broadly accessible state care tend to have a good foundation.

Despite all this, there is much we can improve.

We must remember that the US was average, just like us, and has allowed this key measure of population health to drift so far away from its peers over the past forty years.

We could do the same.

Rising death rates in America should serve as a lesson to New Zealand – and the insurance sector can be part of the solution.

BY RUSSELL HUTCHINSON

‘Wealth is not much good without health. Poor health is detrimental to wealth creation.’

Focus on the cause of death

To look on the brighter side, there are areas where substantial gains could be made.

Our obesity rate is nearly as bad as in the United States: their average (mean) BMI is 28.8, New Zealand’s is 27.9, which is worse than the UK at 27.3, and much worse than, say, France, which is renowned for great food – the French BMI is just 25.3, despite all the wine, cheese and bread.

Weight has a big impact on the incidence of non-communicable diseases. Fatter people tend to die younger.

It is possible to be fat but fit and healthy, it just isn’t that likely –which is why life insurers use it as a key assessment factor when considering rating.

It is hard to change food culture, but we should be reminded that it has changed from good to bad; change back the other way must be possible.

It should also encourage us that modern countries such as France and Japan have a good food culture,

along with lower rates of heart disease and some types of cancerand great life expectancy.

We could also do with improving workplace safety.

Dr Emma Espiner tells a heartbreaking story in her recent book about the death of her cousin in a workplace accident decades ago.

I like to think that recent improvements in law and regulation around workplace safety and responsibility will improve on that, but right now we still have much higher levels of workplace deaths than we should.

Chatswood did some work on how many lives could be saved – this ranged from hundreds to a couple of thousand per year if we could improve to the average or the best of the OECD in certain areas.

Treatment of cervical cancer and breast cancer are another two causes of death where big improvements are possible.

These cancers take women from us far too early. Hundreds of deaths annually could be deferred by many years.

Self-harm in paradise

Lastly, death from self-harm runs at a rate about 80% higher than in the UK.

I think New Zealand is a kind of paradise and love my adopted home.

I much prefer living here to the UK – and yet something is going wrong here that so many of our young people feel there is no way out from their troubles but suicide.

The solution is probably bigger than simply throwing more money at mental health services, although more money would surely help.

Does the insurance sector have a role to play in this area? I think so.

We can highlight that there are gains to be made; we can talk about health, which has always been associated, traditionally, with wealth.

Wealth is not much good without health. Poor health is detrimental to wealth creation. Our clients are interested.

The sector, particularly insurers, should join to promote good, evidence-based approaches to the problem areas which hold back improving health and longevity. A

‘We must remember that the US was average, just like us, and has allowed this key measure of population health to drift so far away from its peers’

Returns are calculated to 31/07/23. Returns are calculated before tax, after fees, except for the non-PIE categories, which are after tax and after fees.

For more information about this table and the methodology behind the data, contact helpdesk.nz@morningstar.com or go to www.morningstar.com.au

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

TOP 10

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

01 Tax hikes make PIEs shine

Financial advisers can’t control the markets but they can control what their clients pay in tax.

02 Fidelity appoints new chief executive Fidelity recruits its new chief executive from general insurer Suncorp.

03 Why we need more female advisers

To work in insurance requires a sharp suit and a mathematical mind? Wrong.

04 InvestNow to expand term deposits, KiwiSaver ETFs

InvestNow is looking to add three more banks to those offering term deposits through its online investing platform.

05 Sharesies members looking bullish again

Online trading platform Sharesies, which now has $2.5b in funds under management, has dug into the behaviour and sentiment of its 500,000 members to release its first investor index report.

06 FMA says monitoring isn't an audit or investigation

The Financial Markets Authority may select a financial advice provider (FAP), or licensed adviser, to provide responses as part of its role in monitoring the industry, says the FMA's Crystal Burbery.

07 FMA denies step-up in information, confidentiality orders

FMA calls out law firm over its use of section 25 notices.

08 Review of Loadings and Exclusions

Continuing my journey in the weeds on existing business servicing; policy terms. More specifically, reviewing policy terms for existing clients.

09 Amplifi boosts advice business

Amplifi, the parent of Mint Asset Management, has added a third advice firm to its business.

10 Reserve

Bank stress-tests banks on climate risk

With climate-related risks already impacting the financial system, the Reserve Bank of New Zealand (RBNZ) has made public the test it is using to climate stress-test the five largest banks..

goodreturns.co.nz

A few snapshots from the 2023 Million Dollar Round Table Annual Meeting held in Nashville, Tennessee, USA.

MDRT ROADSHOW: New Zealand Edition

October 17th - Auckland

October 18th - Christchurch

Keynote Speakers

Nick Longo an established Financial Adviser from Melbourne who demonstrates the power of success through balcony people.

Rico Gomes is a High-Performance Mental Health Coach. He has coached some of our country's highest performing athletes, coaches, and leaders to clear the mental mess and create long term brain change.

Member Spotlight

Hear from 4 accomplished MDRT members as they share their personal journeys and how MDRT has transformed their careers and lives. Also, our first Global Services member and his insights.

Event Highlights:

✔ Engaging Keynote Presentations

✔ Real-life Success Stories

✔ Networking Opportunities

✔ Professional Development Insights

Don't miss this exceptional opportunity to connect, learn, and be inspired! Join us at the MDRT Roadshow and discover how MDRT can elevate your financial services career to new heights.

For enquiries, please contact:

Event Details:

Auckland

Date: October 17th

Location: Ellerslie Racecourse

Time: 9.30am – 12.30pm

Register: https://tinyurl.com/MDRTAkl

Christchurch

Date: October 18th

Location: Addington Racecourse

Time: 9.30am – 12.30pm

Register: https://tinyurl.com/MDRTCHCH

Auckland - Tony Gribble 021 853463

Christchurch - Travis Hamilton 027 2119557