ASSET 128 - 2013

ISSUE 128

The Code

REWRITTEN nib: Boss plans shake-up

What you need to know to make the most of 2014

Portability questions answered

100% committed to New Zealand financial advisers 0800 88 22 88

14 LEAD STORY

UP FRONT 04 EDITORIAL

How well do you know your rules?

07 UPDATE

The Code

Acting quickly can save clients tax.

10 NEWS FROM NEW ZEALAND 11 NEWS FROM AUSTRALIA

REWRITTEN 13 {PROFILE: HEALTH INSURANCE’S NEWEST PLAYER IS READY TO SHAKE THINGS UP}

The new version of the Code of Professional Conduct for AFAs is to come into force early next year.

What has changed and what might it mean for you?

REGULARS

06

30

22

24

{OPEN TO QUESTION} { INVESTMENT }

{ INSURANCE } { ASSET ADVISER }

06 What do you think of the new code?

22 Product news: What’s on offer for 2014.

30 Communications boss turns adviser.

24 What do you offer clients?

26 An outside perspective on regulation.

28 With challenge comes opportunity.

03

UP FRONT

{ FROM THE EDITOR }

How well do you know your rules?

A NEW YEAR WILL MEAN a new set of rules for authorised financial advisers to live up to – but many seem not yet to have had the time to look at what it will mean for their own businesses.

The Code of Professional Conduct for Authorised Financial Advisers sets out the commandments for AFAs to live by – those who breach it can be hauled in front of the Financial Advisers Disciplinary Committee.

It is getting its first update and a new version is likely to come into force early next year, after getting a tick of approval from first the FMA and then the Commerce Minister.

It seems on the surface that the biggest change for a lot of advisers will be the updated continuing professional development requirements.

Instead of needing to do 10 hours’ structured and 10 hours’ unstructured training over each year, advisers will need to do 30 hours of structured training over two years. What counts as structured will depend on a particular adviser’s professional development plan. If it fits with it, it counts. If it doesn’t, it won’t.

This will require some advisers to really hone their plans and put a bit more thought into what training they need to do to keep up with their stated goals. I’ve heard from people who have been involved in FMA audits that this is an area that can be a bit vague in a lot of adviser practices.

Another big change is that AFAs who are not trained in investment will be able to offer advice to people wanting to withdraw money from their KiwiSaver accounts for a first-home deposit.

This is a move that seems to have been widely welcomed but isn’t as dramatic as what the Code Committee had originally proposed – for non-AFAs to get into KiwiSaver advice via a new “pathway”. This “AFA-lite” arrangement was panned both by those who feared it would diminish the quality of advice that was given and those who said there weren’t many non-AFA advisers who would be bothered with the regulatory trimmings that would come with moving into such a role.

04

WWW.GOODRETURNS.CO.NZ

But what’s been interesting to me is how few advisers have actually been paying much attention to the looming changes.

A number of people attended consultation meetings and wrote submissions, but they probably make up no more than 10% of the whole adviser force.

It seems that when it comes to the rewrite of the code, it is the vocal minority that is really making themselves heard.

Many people I’ve contacted to ask for their opinions have said they just haven’t had time to have a proper look at what is being proposed. They’re aware that something is changing but so far are not sure whether it is going to make much difference – if any at all – to their day-today lives.

For a lot of them, it’s somewhere on their summer reading lists: a day at the beach with the new version of the code and a picnic.

The good news for those who haven’t had the time to look into it yet is that the Code Committee doesn’t expect the changes to have a huge impact on most advisers.

Provided they’re operating in a principlesbased way, working to put their clients’ interests first, they shouldn’t find any of the new changes too cumbersome, chairman David Ireland says.

Others in the industry have questioned why – if that really is the case – the changes are needed at all. One asked whether it was just change for change’s sake. Especially when more changes are planned before the end of 2014, because of the review of the qualifications framework, which was not completed in time to be reflected in this new, updated code.

We’ve tried to explain in this issue of ASSET the Code, how it works and what all the changes are. I hope you find it useful and it means that you can pack something a little lighter in your picnic baskets this summer.

Susan Edmunds Editor

HEAD OFFICE 1448A Hinemoa Street, Rotorua PO Box 2011, Rotorua P: 07 349 1920 F: 07 349 1926 E: editor @assetmagazine.co.nz PUBLISHER Philip Macalister EDITOR Susan Edmunds CONTRIBUTORS Bruce Cortesi, Russell Hutchinson, Amanda Morrall, Mike Moore, Edward Richards DESIGN Jonathan Harding ADVERTISING SALES 07 349 1920 027 437 7527 SUBSCRIPTIONS Dianne Gordon P: 0800 345 675 E: subs@assetmagazine.co.nz ASSET is published by Tarawera Publishing Ltd (TPL). TPL also publishes online money management magazine Good Returns www.goodreturns.co.nz and The NZ Mortgage Mag All contents of ASSET magazine are copyright Tarawera Publishing Ltd. Any reproduction without prior written permission is strictly prohibited.

ISSN 1175-9585

05

OPINION

OPEN TO QUESTION DAVID PINE

BBS, CLU, MDRT LIFE MEMBER

TRACEY COXHEAD

G3 FINANCIAL FREEDOM

WHAT DO YOU LIKE BEST ABOUT THE NEW VERSION OF THE CODE OF PROFESSIONAL CONDUCT FOR AUTHORISED FINANCIAL ADVISERS?

WHAT DO YOU LIKE BEST ABOUT THE NEW VERSION OF THE CODE OF PROFESSIONAL CONDUCT FOR AUTHORISED FINANCIAL ADVISERS?

WHAT DO YOU LIKE BEST ABOUT THE NEW VERSION OF THE CODE OF PROFESSIONAL CONDUCT FOR AUTHORISED FINANCIAL ADVISERS?

The emphasis on putting the client first is welcome. This is, after all, at the heart of any good quality adviser–client relationship.

This change is the most positive.

Increasing the number of CPD hours required but with a broader definition is a good idea, although 30 is still not a lot. It also seems to be putting common sense around a lot of things, like the relief from suitability obligations when a client is simply instructing an AFA to carry out instructions. The provision allowing advisers to advise on KiwiSaver without sitting the investment qualification is sensible because I’m not sure how much investing advice is actually needed there.

I quite like the change to 30 hours’ structured CPD over a two-year period. For an IFA member, we have to do 60, of which 30 are structured, so it’s a bit more in line with that.

WHAT DO YOU LIKE LEAST? The code is far too long. It still contains 18 code standards and about 4000 words (excluding schedules and definitions).

By contrast, the MDRT Code of Ethics contains just seven sections (place clients’ interests first; maintain high professional standards; keep information confidential; provide full disclosure; maintain high standards of personal conduct; replacement must be in client’s interests; abide by your country’s laws) and is less than 600 words in length. The MDRT code has evolved into its present form throughout the 86-year history of the organisation. The same code wording is applicable to all 40,000 MDRT members in 80 countries.

Granted, the MDRT code is voluntary in the sense that advisers who qualify can choose, or not choose, to belong to MDRT and therefore be bound by its code. The AFA Code on the other hand is enforceable under NZ law. But my contention is that there is no way the AFA Code should be such a lengthy document.

06

KRISTY STAPLES

CORE WEALTH SOLUTIONS

WWW.GOODRETURNS.CO.NZ

WHAT DO YOU LIKE LEAST? There’s nothing here that’s going to affect the way I do business negatively.

HOW MUCH WILL THE CHANGES AFFECT AFAS’ BUSINESSES? There’s nothing that struck me as a major change. The requirement to put the interests of the clients first seems to me to me fundamental to what all advisers should do. That’s the overarching purpose of everything.

WHAT DO YOU LIKE LEAST? I’ve always been concerned about KiwiSaver withdrawal for a first-home deposit. If you look at it one way, anyone can go to a provider and organise that withdrawal and there won’t be advice around that anyway.

But my concern has always been that these are young people withdrawing money and it’s not helping them to maintain diversification. If you take $20,000 out at an early stage it can make a huge difference to what you’ve got in retirement. There’s no requirement for advice and that bothers me. They’re not understanding what they’re doing to their futures. I would prefer that home loan subsidies and schemes are kept separate. This change [allowing AFAs who have not completed investment qualifications to advise on KiwiSaver withdrawals] opens the floodgates a bit more.

UP FRONT

{ UPDATE }

Foreign pension

changes looming Save your clients tax by knowing the rules.

By: Cambel Ferguson

H

ave any of your clients lived and worked in the UK before 2006?

Those who have are likely to be affected by the IRD’s proposals to tax their UK pensions – and the impact could be extremely beneficial.

If any of your clients have a UK personal or company pension, they can transfer it to New Zealand, and if they do so before April 1, 2014 they will only have to declare 15% of the transfer as income in their tax return.

If they wait until after April 1, 2014 they may need to declare up to 100% of the transfer as income in their tax return.

Essentially the longer they have been here the more they need to declare.

A pension transfer can take up to three months to complete – so the time to act is running short. To get the process started your clients should be contacting their UK pension provider now and updating their details and requesting overseas pension transfer forms and a statement of transfer value.

It pays to get the statement of transfer value as many people with UK pensions may have lost touch with the amount of the pension might be worth on transfer.

We have seen many cases of transfer values being 15 to 20 times the value of annual benefits promised.

If your clients leave their pension to come into payment in the UK they will pay tax on the income as foreign income. Once their pension is in New Zealand when a payment is made out of the fund there is no New Zealand tax to pay on it. So taking

Tax saving from transferring a UK pension to NZ now versus after 1 April 2014 Pension value (NZ Dollars) Years in NZ

25,000

50,000

100,000

250,000

7

297

594

1,188

2,970

9

1,029

2,058

4,115

10,288

11

1,737

3,475

6,950

17,375

13

2,425

4,849

9,699

24,247

15

3,090

6,179

12,359

30,896

17

3,735

7,470

14,939

37,348

19

4,359

8,719

17,437

43,593

21

4,964

9,928

19,856

49,640

23

5,551

11,101

22,202

55,506

25

6,118

12,236

24,473

61,182

27

6,668

13,337

26,674

66,685

29

7,013

14,025

28,050

70,125

To work out how much tax they can save if they transfer prior to April 1, 2014 as opposed to after you can use this table: a small tax hit now could be worth it in the future. Moreover, they can use a portion of their transferred funds to pay the tax on transfer – so there is no cash cost to the client.

Advisers should be making their clients aware of these changes as they have potentially large impacts. Your clients can get a free report on their UK pension and

find out more about transfers at sites like www.qropsnz.com.

With the FMA paying particular attention to pension transfers and ensuring that receive advise on the UK pension, tax and the New Zealand investments, advisers who wish to help their clients can partner with pension transfer specialists such as Charter Square Services.

07

UP FRONT

a new appointment email details { PEOPLE } Ifandyoua have picture to editor@goodreturns.co.nz

Rob Everett

FMA APPOINTS NEW BOSS The FMA has appointed Rob Everett as its new chief executive. He will start on February 3.

FMA’s Chairman Simon Allen said he was delighted that Everett would be leading FMA through the next phase, including the rollout of the Financial

Markets Conduct Act. Everett has been a director at Britain’s Promontory Financial Group.

Before that he spent 17 years at Bank of America Merrill Lynch, in Europe, Asia and North America. His roles included chief operating officer for Europe, the Middle East & Africa (EMEA); general counsel, head of legal and compliance, EMEA; and Head of Legal for Investment Banking, EMEA and before that for Investment Banking, Asia Pacific region.

Everett said he was honoured to be taking up the role of chief executive of FMA. “I look forward to building on the great progress made by Sean Hughes and his leadership team since FMA's creation and to taking FMA to the next stage of development.”

Liam Mason will be acting chief executive between Sean Hughes’ departure in December and Everett taking over in February.

ASB HIRES AFAS Simon Stredder has joined the ASB Wealth and Insurance business as a wealth manager.

Glen Wadsley

He has 17 years’ experience in investment banking, finance and trading.

Stredder’s most recent role was as a wholesale broker with ASB Securities where he managed the UK Investment Trust business along with the Equity and Fixed Income IPO business for the Wholesale Trading Desk. He has also held positions with Deutsche Bank and JP Morgan in London.

He has a keen eye on investment markets, is an NZX associate adviser and registered as an AFA. Glen Wadsley has also joined ASB

NZ Financial Services Group

Join a group that’s leading the way in helping Kiwis achieve their financial dreams Two of New Zealand’s leading groups; Allied Kiwi and Loan Market have merged to create one of the largest financial services companies in the country. Allied Kiwi’s advisers and Loan Market’s mortgage brokers work within a network of over 500 members that offers home loan, insurance and other financial services across New Zealand.

All advisers under the NZFS Group umbrella have exclusive access to MyCRM, our world-class sales and client management platform. It’s just one of the tools we offer that will make your business more efficient and give you the competitive advantage in the marketplace.

To find out more about a group that’s committed to making it easy for you to grow your business and to focus on your client’s needs contact us today.

08

WWW.GOODRETURNS.CO.NZ

To speak to one of the experienced NZFS Group team call 0508 87 87 88, email info@nzfsg.co.nz www.nzfsg.co.nz

UP FRONT

as a wealth manager.

He has 16 years’ retail, investment banking and finance experience.

Wadsley’s most recent role was that of key relationship manager at Aegis where he managed the relationship of Aegis’s largest clients including ASB and Westpac.

He has a huge passion for financial markets and has just been certified as an AFA.

NEW ROLE AT VAN EYK Van Eyk Research has appointed Anthony Vaiente to the new role of manager of practice acquisitions and recruitment – a move it says signals its intention to get more involved in financial advice.

He has more than 15 years' experience in business development, mergers and acquisitions of financial planning practices and adviser recruitment and has held roles with IPAC Securities, ANZ's OnePath and Zurich.

He will focus on building Van Eyk’s advice capabilities here and in Australia.

Former BT portfolio manager Robert da Silva has already been hired as head of manager research and deputy chief investment officer.

Funds colleague Greg Fraser, who has been appointed to the role of senior investment analyst.

Anthony Halls, who worked with Richardson and Fraser at BT before moving to the NZ Super Fund, will continue to manage Mint’s transtasman equity portfolio.

He joined Mint in September.

Former Goldman Sachs JBWere analyst Carlie Eve, who has been with Mint since its inception in 2006, will assume responsibility for Mint’s transtasman property portfolio.

CHIEF EXECUTIVE FOR NZAM Andy Morris, a principal and shareholder, has been appointed to the role of chief executive of New Zealand Assets Management.

He will be responsible for driving new business growth, running the business including the day-to-day operations.

Principal and director Alan McChesney said the decision to appoint a chief executive signalled to the market NZAM’s ambition to expand and enhance its operation.

“Appointing Andy was a unanimous

Andy Morris

board decision by myself and fellow principals, Greg Peacock, Richard Riddell, Greg Jones, Simon Tompkins and Dyrol Lowe and is growth-driven,” McChesney said.

“It follows the personal investment by the principals this year in new Trans-Tasman equity fund manager, Castle Point.”

Morris is a former director of Westpac Institutional Bank in New Zealand, and has more than 29 years’ private, wealth and institutional banking experience including having worked in London, New York and Sydney.

Paul Richardson

SHAKE-UP AT MINT Mint Asset Management has made changes to its investment team.

Former BT investment manager and Mint independent director Paul Richardson has been appointed chief investment officer.

The role is currently held by Rebecca Thomas, who is both chief investment officer and chief executive.

She will vacate the former role to focus on her tasks as chief executive as well as the overall management of the business.

Richardson will remain on the board as executive director, with a new independent director expected to be announced early next year.

Richardson is joined by former BT

09

UP FRONT

{ NEWS FROM NEW ZEALAND }

Trans-Tasman investment opportunities limited Global equities offer better value than trans-Tasman shares but many investors are grossly underexposed to the international market, advisers have been told.

Paul Moore, founder and chairman of Australian fund manager PM Capital, told an adviser briefing in Auckland that a number of factors were making certain global shares attractive.

“The offshore investment proposition is pretty simple: there’s a greater breadth of opportunity, a greater risk-reward ratio as well as a historically elevated currency both here in New Zealand and in Australia.

“And yet, only 1% of self-managed super funds have their money offshore. It doesn’t make any sense.”

FMA wants to increase its hourly rate Most DIMS providers will likely have to pay $3565 to be licensed under the Financial Markets Conduct Act next year.

When the new rules kick in, those who are offering class DIMS advice will have to be licensed, along with other financial services providers, such as fund managers.

The FMA has released a discussion document about the fees it will charge, because it says the licensing regime will result in extra costs for the regulator.

“These costs need to be fully recovered from licensees.”

It has called for submissions on its proposals.

The FMA has recalculated its hourly rate and says licensing fees will be set with a combination of a flat fee and an hourly rate for work beyond that.

It says the hourly rate is uses to calculate FMA fees has not been changed since 1998 and is no longer accurate. It wants to increase the rate from $166.62 to $178.25, including GST. The FMA board member hourly rate would remain at $230.

At the moment it is not consulting on adviser fees administered under the Financial Advisers Act.

emailing regularly for information.”

He said the FMA’s monitoring visits were also not always as long and in-depth as they once were. He said it had been originally explained that monitoring visits would involve the FMA contacting an adviser, asking for client files to be made available, then a visit and audit, after which findings would be presented.

“But we’ve had some that have been a bit shorter than that and more interview-based. My clients’ experience with monitoring visits is that they’re generally pretty helpful for the adviser business. The way they approach is it they don’t come in with a stick… it’s like the good cop bit. If they come in on the back of a client complaint, it’s different.”

Fund managers predict pick-up

Barry Read

FMA paying more visits to AFAs Financial advisers have seen more of the Financial Markets Authority recently, its annual report says.

The FMA has increased its contact frequency with AFAs over 12 months ended June, and introduced a new, shorter “verification visit”.

“Our monitoring programme enables us to observe and record how AFAs are complying with their legal obligations and gives us the opportunity to provide them with feedback, so they can make any necessary improvements to their processes.”

Barry Read, of IDS, who helps advisers with compliance, said he had definitely noticed the FMA using different types of contact and monitoring over the past year.

“Our clients have been experiencing more calls asking questions and

Returns in most asset classes are likely to be sluggish over the next year but the outlook is brighter over the next five years, according to a survey of local fund managers.

The latest Aon Hewitt Investment Forecasts survey found short-term growth expectations for the New Zealand market had declined since the previous survey in August.

New Zealand equities, which have grown by 25% over the past year, are now expected to return 6.6% over the next year, down from 7.5% in August.

Expected property returns in the year to September 30 next year are 5.5%, down from 6.1% in the August survey.

But the outlook for international equities has improved, with an average forecast of 6% in the latest survey, compared to 4.8% three months earlier.

Opinions differ widely, however, with a 9.4% dispersion between the lowest and highest forecast for international equities over the next year.

New Zealand cash (2.9%), New Zealand fixed interest (3.0%) and international fixed interest (2.4%) are all forecast to barely beat the expected inflation rate (2.1%) over the next year.

Returns for all these asset classes are expected to improve over the next five years, with cash tipped to average 3.7% and New Zealand fixed interest 4.0% as interest rates rise here.

Keeping New Zealand financial advisers strong 0800 88 22 88 010

WWW.GOODRETURNS.CO.NZ

UP FRONT

{ NEWS FROM AUSTRALIA } seeing momentum accelerate, and our portfolio of brands is well positioned to benefit from this.”

Few Australians have an adviser

Gail Kelly

Tellers provide financial advice

Advisers boost bank bottom-line

National Australia Bank is to train all its tellers to provide “lite” financial advice as it downsizes its branches in a bid to improve its market share.

NAB, the parent of BNZ, plans to shrink its branches by 25% and rely more on digital technology.

Its executive general manager Vicki Carter said tellers would deal less with traditional transactions and more with providing customers with advice.

She told Australian media that most Australians would not pay $5000 for a financial plan. “But many Australians still need help with simple rollover products, their superannuation products and their simple protection needs. That is unfilled at present, so… this is actually a gap in the market.”

NAB will have financial advisers at 15% of its branches.

Westpac Group has revealed a 13% increase in advice income, up A$32 million for the year.

Its wealth and insurance division increased cash earnings by 13%, to A$737 million.

Revenue per adviser increased 16% and there was a 14% rise in life in-force premiums.

“I am particularly pleased that all of our operating divisions and brands contributed positively to the result,” said Westpac Group CEO Gail Kelly.

“It demonstrates the quality of the performance, with cash and core earnings up across the board.”

Kelly said that taking a portfolio approach to Westpac’s banking and wealth businesses in Australia meant higher revenue and lower costs.

“The spring season is already

Just 15% of Australians have a financial adviser, even though those who do have one rate the service highly, a survey by BlackRock has shown.

More than half use their own “thoughts and ideas” as their basis for financial planning.

Hong Kong investors were the biggest users of advisers, at 35%. Britons were the least likely to have an adviser, at 14%.

The global average was 19%.

Europe was slightly lower, at 17% and Asia-Pacific higher, at 26%.

A study by RFi found the Australian banks were missing a large section of the wealth market, with just 14% of those with investable assets of more than $100,000 excluding property having a relationship focusing on wealth and investment.

"Financial advice is still the preserve of a small minority, but those who use it value it highly," Mark Oliver, managing director of BlackRock, told media.

The research found 89% of advised Australian investors said it was good value for money, compared with 84% globally, while 93% said it helped them select the right products, higher than 87% globally.

Using a financial adviser was more common for those earning more than A$150,000, or with household income of more than A$160,000.

011

PROFILE

{ PROFILE }

New health player affordable policy panacea nib is now the second-largest health insurer in New Zealand.

With a wide range of policies and a new chief executive at the helm it is established on both sides of the Tasman.

By: Susan Edmunds

H

e’s been in the job since May but nib health funds’ New Zealand chief executive Rob Hennin says it feels like ages – and not a very long time – both at the same time. “It depends how you look at it,” he says.

And Hennin seems to only have one way of looking at his new role: As an opportunity.

Although the market conditions could be described as tough, Hennin is full of talk of what could be achieved and what is available for the taking, for the company, for the insurance industry and for New Zealand consumers. nib is the newest player in the health insurance market in this country, and has garnered attention by offering cheap policies aimed at young people, in a marketing campaign fronted by league star and rugby convert Benji Marshall.

The Australian-based business acquired TOWER’s medical insurance arm at the end of 2012 and the company now has more than one million customers spread across both sides of the Tasman.

It is now the second-largest health insurer in New Zealand. The New Zealand branch of the business contributed $8 million in pretax profits to its full-year results, in the year to June. Its premiums represented 5.5% of

012

WWW.GOODRETURNS.CO.NZ

the total premiums pulled in by the group, and the pretax profit was 8.7% of the group result. nib offers a range of policies and products, from trauma and private hospital cover to insurance for day-to-day medical expenses and optical care. Discounts are available for customers who choose a higher excess.

There is a focus on cheap and easy. Of the policies that Marshall’s ads are pushing, the $4.95 a week Basic EveryDay policy pays 60 per cent of some medical costs, up to a maximum of $100 a year on physiotherapy, $250 on the cost of prescription glasses or contact lenses, $100 on visits to the GP, and $500 on dental procedures, not including wisdom tooth removal.

The $9.95 a week Mid EveryDay policy includes more major dental work, and pays out 60 per cent of the cost of a procedure up to a maximum of $750 a year. Glasses and physiotherapy have higher limits of $350 and $250, and the GP cover includes prescriptions and minor surgery, up to $300 a year. It also includes visits to specialists and diagnostics up to $5000 a year.

Hennin had been running his own consulting company when he came to the nib position this year. Before that, he’d worked for American Express, including as

its vice-president of products, acquisition and insurance, and as its general manager of world markets insurance and chief executive in India.

He moved to New Zealand for the nib job but doesn’t want anyone to think he’s an Aussie immigrant. Hennin says he’s very much a Kiwi coming home. He started his career as marketing manager for Unilever in New Zealand, before the company moved him to Australia.

He said the opportunity to return to this country, and to an interesting, exciting job, was too hard to turn down. “My wife and I have family here and there’s a greenfields opportunity, setting up something new.”

He said nib would have a very different look and feel to that of TOWER. Hennin is on the board of the Health Funds Association of New Zealand, which recently posted statistics showing another quarter of record claims, and dwindling numbers of people with insurance.

But Hennin says he’s not fazed.

“Private health insurance is an exciting market. It is declining but we reckon there’s an opportunity for it to grow.” nib has done a lot of market research work, he says. “We can tell you why consumers have not been excited about the category. It’s because they look at the

PROFILE

Rob Hennin We’ll find out what works and do more of that, and see what doesn’t, and do less. The exciting thing will be to test, learn and work with the industry and advisers to get it right. There’s a great opportunity for a new provider to come in and stimulate demand. current offerings and perceive them as expensive. There are not that many options for carved out products, or choices for them.

There doesn’t seem to be a real focus on preventative health, and for young people, that’s of interest to them.”

Too many insurers relied on lengthy signup processes that put people off, he said.

“What customers have been telling us is that they could be interested if the choices they had were more affordable, flexible and simpler to understand. There’s an opportunity there.”

Eventually, the Government would likely have to reduce its healthcare spending in some way, he said. “The total Government

funding of health care is pretty high in New Zealand, about 80%. That’s well above the OECD average. In Australia, the Government only funds about 70%.”

Projections indicated the New Zealand level probably would not be sustainable in the future, he said. But at the same time, only about 30% of Kiwis have private health insurance, whereas in Australia it is more like 50%.

There was a chance to turn that around, he said, although New Zealand’s health insurance coverage is still dropping. Hennin said the roughly 10,000 people who dropped out of the private health insurance market every year was an unusually high number by international standards.

There was an opportunity for providers to add a “culture of value” and promote the industry heavily in ways that were seen as relevant and affordable. “There are a lot of providers in the country but the product range available to New Zealand consumers is relatively small. More choice and more flexibility would do a lot in terms of cover increasing.”

There had been some misinformation circulating in the industry about nib’s position on advisers, Hennin said. He said the organisation was committed to its relationship with independents and he had been travelling around, meeting as many as he could. “Our vision is to target the 70% who don’t have private health insurance and grow that market,” Hennin said.” Designing bespoke products for independent financial advisers is a key part of our strategy.

There is room to innovate.” nib plans a new range of product for advisers early next year and another swathe later in the year. Products are likely to be similar to those that have been successful with advisers in Australia.

But Hennin said people should not see organisations such as his moving into online sales as a threat to other insurance sales channels. “The work we’ve done shows that young people really want to research, inquire and buy online. Whether that’s via the PC, iPad, iPhone or something else, that’s the way they like to do things. For them, that’s the most relevant channel.

I don’t think they’d go to an adviser anyway.

By making insurance available online, we’re tapping into that 70% and growing that market, that’s an opportunity for advisers later on.”

For now, Hennin says it’s just an exciting time to be involved with a company like nib.

The next stage will be to see how strategy develops and how all the ideas that have been put in place pan out.

“We’ll find out what works and do more of that, and see what doesn’t, and do less.

The exciting thing will be to test, learn and work with the industry and advisers to get it right. There’s a great opportunity for a new provider to come in and stimulate demand.”

013

COVER STORY

{ REGULATION }

e d o C e h T

REWRITTEN After rounds of consultation meetings, submissions and rewrites, the new version of the Code of Professional Conduct for Authorised Financial Advisers has been submitted for sign-off. But what will it mean for advisers?

By: Susan Edmunds

W

ithin a few months, authorised financial advisers will have a new set of rules to abide by.

The Code of Professional Conduct for Authorised Financial Advisers has had its first rewrite since it came into force in 2010 – back when mentions were made to the Securities Commission rather than the Financial Markets Authority.

Since August, the Code Committee, headed by chairman David Ireland has issued a consultation paper, held public meetings in Auckland and Wellington, accepted submissions, issued an exposure draft, and accepted more submissions before finally submitting its updated version to the FMA this month.

The FMA gets six weeks to sign it off and pass it on to the Commerce Minister, who then gets another six weeks to ponder it. The committee is hoping that the full 12 weeks won’t be necessary and that the code will come into force in early 2014.

For advisers, the biggest changes are a restructuring of the continuing professional development requirements – they will have to do 30 hours of structured CPD over two years rather than the current 10 hours of structured and 10 unstructured each year; a provision that allows AFAs who have not completed investment qualifications to advise people wanting to withdraw money from their KiwiSaver accounts to purchase

014

WWW.GOODRETURNS.CO.NZ

a first home; new standards around conflicts of interest; and clarification that code standard one – requiring that advisers put clients’ interests first at all times – is paramount.

The Code Committee backed away from an earlier proposal that registered but not authorised financial advisers be allowed to offer advice on KiwiSaver.

Former FMA employee Gavin Austin, who now runs ABC Compliance, which helps advisers with regulatory compliance, said the biggest adjustment for many advisers would be the change to CPD requirements.

To count as structured credits, advisers have to show how their training and CPD hours fit in with their professional development plans. It also has to be verifiable by documentation and delivered by an appropriately qualified person.

The committee had originally suggested that when developing a CPD plan, advisers would have to ensure they had the knowledge and skills at the level of someone who was coming into the industry. But Ireland said it had been pointed out during the submission and feedback process that the only way that could be truly be ensured would be for all advisers to sit the qualifications each year. The requirement has been reworded to say that advisers need to identify the gaps in their own skills and knowledge compared to the entry level for the industry.

Austin said he noticed when he was

involved in the FMA’s monitoring activities that CPD and professional development planning were not things that advisers were paying a lot of attention to.

He said: “They haven’t planned through or stopped and thought about what their strengths and weaknesses are and how they could improve. They haven’t addressed that well. I found most had picked up a template and popped a few things in there. The plan was about collecting credits rather than self-analysis.”

He said the new code would be a chance for advisers to give some thorough thought to what was needed to keep them on track with their business development.

Some CPD would be the kind of maintenance work that every adviser had to do, he said. Other training would be required to cater to specific requirements.

“Certain things are required as a matter of course but then other things you need to think about, such as ‘do I really understand balance sheets that well?

Should I do something about my ability to interpret balance sheets?’ If you’re looking at recommending shares in a company or talking about the financial strength of a company if it’s issuing a bond, that could be something that’s on the plan and relevant.”

Advisers should welcome training, he said, rather than thinking of it as a chore.

“If it’s all as easy as paint by numbers, anyone could do this job.”

Institute of Financial Advisers president

COVER STORY

{ REGULATION }

We would be hoping that AFAs would regularly look at their business models, the way they’re operating and whether that’s consistent with best practice.

David Ireland Nigel Tate said it was awkward that professional development plans were designed year-by-year but the CPD requirements would now be taken over two.

He said, as an example, that if he had noted in his plan that he needed more training on estate planning, a session about wills and planning would count as CPD and could be used as part of the tally for a twoyear period.

But if he was with a colleague who did not have it in his plan on the particular year the training was run, it would not count as structured, even if the next year’s plan included the need for estate planning training. “That’s an anomaly in terms of the timing of the two processes. I would suggest they align the CPD plan with eligibility for CPD.” The code no longer allows CPD to

If it’s all as easy as paint by numbers, anyone could do this job.

-Gavin Austin016

WWW.GOODRETURNS.CO.NZ

be counted as structured purely by virtue of being offered by a professional body.

Tate said that was a mistake. He said product providers were still allowed to offer structured hours, provided it was technical training rather than a sales pitch. It did not seem fair that professional bodies had to jump through other hoops to get their training classified as structured.

“I think that might be the wrong outcome.

It might have been better to tighten up the definition a bit more. I’m not too concerned because the IFA’s got all the requirements in place to meet the provision of structured training anyway and others will follow.

We’ve been pinged in the past for having an assessment at the end of CPD sessions but now that will be required.”

The code requires that advisers provide documentation to prove they attended training.

Ireland said there had been feedback about the new conflict of interest standard being too harsh, which the committee had responded to.

The original wording required that any adviser who was not able to put a client’s interests first in a particular situation decline to act.

Ireland said that had been tweaked in the version that had been sent to the FMA, to make it clear that the code was only concerned with situations where a client’s interests could not be put ahead of an adviser’s own, or those of a related party.

It was worried about sales concerns primarily, he said, but had been interpreted as going further than the committee had intended.

People had asked about situations such as IPOs, where an adviser had to allocate a limited number of shares across a number of clients. Some would miss out at the expense of others, but as the standard had been written, there was a perception that the adviser would have to refuse any clients who were not going to be able to be given shares.

Ireland said: “People were saying you’re asking us to send clients away when it’s not in their interests to do so.”

Advisers just needed to get full, informed consent to act in those situations, he said.

He said full and frank disclosure of what the potential conflict might be would be in clients’ best interests.

The committee has also made changes to the requirements relating to assessing the suitability of personalised advice.

The new version of the code allows an opt-out of having to determine suitability in situations where advice is transactional – where a client is purely instructing an adviser to conduct a trade, for example.

The original draft required written confirmation from the client that the adviser was not gauging suitability on each individual transaction but Ireland said that had been seen as going too far.

“We did see some situations where that was not necessarily helping the client.

It could be an irritation if they’re doing

COVER STORY

multiple trades over a few days.”

He said it had been decided that it would be better to allow relief from the requirement to determine suitability of personal advice in transactional situations where it had been expressly confirmed by the client.

Ireland said all of the changes to the code should not require advisers to change their businesses very much. “We would be hoping that AFAs would regularly look at their business models, the way they’re operating and whether that’s consistent with best practice.”

He said there would be some adjustment required to adviser business statement documents, reflecting what was in the new code. The FMA would also have to update its guide to an ABS. But he said AFAs should be reviewing them at least annually, anyway.

“The feedback has been mostly positive, it’s quite encouraging. We’ve put effort into trying to get a balance. Some people are hung up on the changes to CPD but we have considered all this and are comfortable we’re on the right track.”

Tate said that overall, the new version of the code looked good. Many things had been tidied up and a lot of it was an improvement. But he said there were some minor things that advisers would need to get their heads around.

He said advisers would need to be careful about situations where clients opted out of receiving written advice. He recommended they follow up any consultation in which a client did not want to receive a written plan with an informal outline of what was discussed and delivered. This could then be kept as insurance against any future problems.

Michael Naylor, of Massey University, made a submission on the new version of the code and said he was worried that the committee and the FMA were under pressure to offer more detailed guidance as to what advisers had to do, rather than sticking to the principles-based format that the FMA had been keen to espouse.

“The biggest failure identified internationally in the regulation of financial enterprises has been the use of detailed rules-based approaches, where market participants have been careful to obey the letter of the rules, whilst flagrantly breaching it in spirit. This not only enables harmful behaviour, but it also makes prosecution difficult.”

He said it was better to offer broad principles of best practice and put the onus on the adviser to exercise professional judgement. He suggested that the code

use the term “prudent adviser” to reflect that, and require advisers to be part of a professional body.

“The major problem with the current code is that it does not clearly require AFAs to behave ‘professionally’. Code one requires AFAS to ‘place the interests of the client first’, which very narrow and can be achieved at the level of a tradesperson.

Code six requires AFAs to ‘behave professionally in all dealing with a client’ – which does not cover non-client activities.

There is no embodiment of the spirit of professionalism.”

He suggested that the code should include a requirement for advisers to disclose when they were only able to provide the products of a limited number of suppliers, and that other product providers might offer something that better suited their needs.

Naylor also recommended that the code say that AFAs and QFEs have a duty to act in a professional manner with the collection of information and the use of that information.

He said this was aimed at bank QFEs who tended to collecting marketing information as they went about giving advice.

“Only information required for the purpose of giving advice should be collected and the AFA/QFE should be able to show why it was in the client’s interest that each piece of information was collected. It should be as limited as possible.”

Advisers should be required to refer a client to a specialist if that was required, he said, rather than ignoring needs that were outside the scope of their service.

And if advisers were only required by the code to keep records for seven years, liability should also be limited to seven years, he said. “To do otherwise would be a breach of natural justice as the adviser would no longer have the records required to adequately defend themselves.”

But he said the only thing that the committee took notice of out of his submission was to retain the Massey post-graduate diplomas as alternatives to standard set A, C and D. “The sunset clauses were deleted.”

None of his other suggestions were reflected in the final version of the revised code.

Although a sign-off on the new code is near, this will not be the last that advisers hear from the Code Committee for 2014.

Ireland said the catalyst for the review was the looming update of the qualifications framework. But it had not been finished in time to be incorporated.

“That process took longer than expected and we have ended up not being able to

The major problem with the current code is that it does not clearly require AFAs to behave ‘professionally’

Michael Naylor reflect those standards. Once the new level five comes through, we expect there will need to be targeted consultation around the qualifications so we can adopt a new set of qualifications, competency and skill requirements to reflect where level five has got to. That might be the second half of next year but it will be a much more limited, cleaner set of changes.”

At that point, the dual set of definitions that are included in the code to include both the current regulation and the looming Financial Markets Conduct Act could be culled to one.

But Ireland said it would be another chance for advisers to point out any problems with the new code, or anything that was not working well. “If we’ve got something horribly wrong or it’s problematic, we can update it.”

Keeping New Zealand financial advisers strong 0800 88 22 88 017

COVER STORY

Code standard

#1. STANDARD ONE: #2.STANDARD TWO: #3. STANDARD THREE:

An Authorised Financial Adviser must place the interests of the client first and must act with integrity. This obligation is paramount.

An Authorised Financial Adviser must not do anything or make an omission that would or would be likely to bring the financial advisory industry into disrepute.

.

An Authorised Financial Adviser must not state or imply that the Authorised Financial Adviser is independent, or that any financial adviser services provided are independent, if a reasonable person in the position of a client would consider that the Authorised Financial Adviser or the services provided are not independent.

#4.STANDARD FOUR: #5. STANDARD FIVE:

An Authorised Financial Adviser must not borrow from or lend to a retail client.

– An Authorised Financial Adviser must effectively manage any conflicts of interest that may arise when providing a financial advice service

#6.STANDARD SIX: #7. STANDARD SEVEN: #8.STANDARD EIGHT:

No ch

No ch

No ch

This client The n Whe

An Authorised Financial Adviser must behave professionally in all dealings with a client and communicate clearly, concisely and effectively.

This being

An Authorised Financial Adviser must ensure each retail client has sufficient information to enable the client to make an informed decision about whether to use the Authorised Financial Adviser’s financial adviser services.

A spe

: When providing a personalised service to a retail client, an Authorised Financial Adviser must take reasonable steps to ensure that the personalised service is suitable for the client.

#9. STANDARD NINE:

Where an Authorised Financial Adviser provides a personalised service to a retail client that is an investment .planning service or that relates to a category one product, the Authorised Financial Adviser must provide an explanation of the service that is sufficient to enable the client to make an informed decision about the financial adviser service.

#10.STANDARD TEN: #11. STANDARD ELEVEN: #12.STANDARD TWELVE:

When providing a class service to a retail client, an Authorised Financial Adviser must take reasonable steps to ensure that the client is aware of the limitations of the service provided.

An Authorised Financial Adviser must ensure there is an appropriate internal process in ..place for resolving client complaints in relation to the Authorised Financial Adviser’s financial adviser services.

An Authorised Financial Adviser must record in writing adequate information ..about any personalised services provided to a retail client.

#13. STANDARD THIRTEEN: #14.STANDARD FOURTEEN: #15. STANDARD FIFTEEN:

In sit client Com

Word

No ch

No ch

Word inclu empl

An Authorised Financial Adviser must ensure that records of all information and documents required under this Code are kept for a minimum of seven years.

Word

Before providing a financial adviser service, an Authorised Financial Adviser must have the competence, knowledge and skills to provide that service.

Word

An Authorised Financial Adviser must have a knowledge of the Act, the Code and other legal obligations ...relevant to the operation of the Authorised Financial Adviser’s practice as a financial adviser (including relevant consumer protection laws) that is adequate for the proper operation of that practice.

#16.STANDARD SIXTEEN:

: To be an Authorised Financial Adviser, a financial adviser must attain the Unit Standard Sets within the National Certificate in Financial Services (Financial Advice) (Level 5) that are relevant to the financial adviser services provided by the AFA. For the purposes of the code, an Authorised Financial Adviser is deemed to have attained a particular Unit Standard Set where the Authorised Financial Adviser has attained an alternative qualification or designation to that Unit Standard Set specified in the code’s competence alternatives schedule.

#17. STANDARD SEVENTEEN: #18.STANDARD EIGHTEEN:

An Authorised Financial Adviser must maintain and keep current a professional development plan for each CPD period.

An Authorised Financial Adviser must undertake sufficient continuing professional training to maintain the Authorised Financial Adviser’s competence at a level appropriate for the financial adviser services the Authorised Financial Adviser provides or intends to provide, and keep up-to-date with developments relevant to the Authorised Financial Adviser’s practice.

018

Word twea

WWW.GOODRETURNS.CO.NZ

No ch

The a quali pathw and t

Word and i

This They be st

ns on

AFA. ancial

ain ser

COVER STORY

Wording has been added to make it clear that this is the overarching standard for all advisers. It has also been tweaked to clarify that advisers are not required to offer services that do not fit within their scope of service.

No change.

No change.

No change.

This replaces the “related person” standard of the previous code, which required that advisers not provide advice to a retail client about a financial product that was not offered to the public if the adviser was a related person of the product provider.

The new standard makes it clear that advisers must identify and clearly communicate any potential conflicts of interest.

When the adviser is not able to put a client’s interests ahead of their own, or those of any related party, they must decline to act.

This has been clarified to make it clear what assessment and review of financial products is required by AFAs when a product is being recommended. Reference to conflicts of interest has been removed from this standard because it is covered in CS5.

A specific disclosure obligation has been added for AFAs who are limited in their authorisation.

In situations such as DIMS, AFAs can get relief from the requirement to determine suitability each time if it has been expressly confirmed by the client that they will do so. The earlier version of the revised code had suggested that written confirmation would be required each time but the Code Committee said there were situations where that could be seen as over the top, such as when multiple trades were being done over a few days.

Wording has been added to clarify the extent of the explanation required and to require a concise description of the principle risks and benefits.

No change.

No change.

Wording has been added to make it clear that information must be sufficient to demonstrate compliance with standards five through nine and must include copies of all information and documents provided to or received from the client in connection with the AFA’s personalised service. AFAs who are employees must be sure their employer’s systems are consistent with the standard and all AFAs must comply with the obligations of the Privacy Act. Wording has been added to clarify AFAs obligations when they are using third-party platform providers.

Wording has been added to emphasise that AFAs must meet the competence requirements in effect at the time their services are provided.

No change.

The ability to offer DIMS without Unit Standard Set C has been removed. Advisers who are AFAs but who have not completed the investment qualifications will be able to offer advice on the KiwiSaver first-home withdrawal option. Those who became authorised relying on a competency pathway that is no longer available for new applicants will still comply with this standard as long as there has been no break In their authorisation and they demonstrate compliance with CPD obligations.

Wording has been added to reflect the fact that the plan must take account of increasing minimum qualifications for AFAs and identify any gaps in their abilities compared to what is required at the entry level.

This standard has been rewritten to require advisers to complete 30 hours of structured CPD over each two-year period.

They must be able to show that the training fits in with the aims of the professional development plan. The standard also clarifies that to be structured, CPD must be offered by a qualified educator or relevant expert, and must be verifiable by documentation.

019

INSURANCE

{ INSURANCE }

WISHINGYOU LOTS OFGROWTH IN 2014 What do you need to think about to be prepared for the new year?

Developing good referral sources – When I ran the LJHooker franchise on the North Shore we really worked our referral sources. Each week we were in sales meetings with each office talking about something connected with home loans and insurance, educating, engaging – not always asking for leads – but somehow never leaving an office without one. That was just one channel. Given what we keep hearing about the underinsurance problem for small businesses, a focus on referrers that can access those types of business is ideal.

Compliance – Most of the work on statements of advice has been focused on meeting the compliance needs of AFAs offering investment advice. The focus has not been very strongly on insurance advice given by RFAs. They often leave out key insurance-related issues and bring in wider financial planning issues which may not be appropriate. So developing succinct, insurance-appropriate advice structures that do a good job of limiting advice is a major task. The regulator has had a lot more to do with investment management scandals, culminating in a recent highprofile conviction for fraud. But recently I have heard of more attention being put on pursuing issues and complaints around replacement advice and suitability of advice.

Direct sales – The posture of your business with regard to direct sales should be active in both playing offence to win appropriate clients and defence to reduce the risk of losses of clients to these channels. Those direct offers which annoy you on the radio as you are driving to appointments are working – so you need to know how to both inoculate your clients against the dumb price comparison or uninformed pitch across the counter next time they are doing their banking. Then you need to ask everyone you meet whether

✱

{ RUSSELL HUTCHINSON }

W

hat will be the big issues for life and health insurance in 2014? Here is my list of what to look out for. Use the list for your business planning and see how you can address each as they apply to your business, in your area.

Finding new clients – A perennial challenge. Not just new to you either, but completely new, fresh clients that haven’t got insurance. They are ideal.

Why? Younger lives, fewer underwriting problems, lower premium increases, no replacement business risks, and genuine growth in your business. There are plenty of them, so finding ways to reach them is vital.

I subscribe to lots of US-based insurance advisers’ blogs and they work their marketing channels much harder – I guess they have to as it is a more competitive market – and they work community marketing, affinity groups, online, email, educational channels so much harder, and usually not just one – they will have three or four major lines of marketing operating in concert and seek to create a brand presence in their locality.

✱

020

WWW.GOODRETURNS.CO.NZ

✱

✱

INSURANCE

that the segment will receive and talk more about medical insurance.

Explain how commission works – Be prepared to defend your model, disclose commission, and tell people why it works for them. I think advisers should always explain how they get paid, and be prepared to say why it works well: it means consumers do not have to fork out a big fee for good financial advice around insurance – that’s paid for by the product provider from the insurance. Without it the middle market for insurance would find it hard to afford talking to an adviser who could offer a range of possible providers.

Be ready for when commission doesn’t work – But sometimes commission doesn’t work. When you meet a client with existing health problems and cover who needs advice, and no sale is possible – commission doesn’t work.

Or when you are asked to provide lots of support around a very small insurance case. Or when you are asked to consult on a claim in progress…. So sometimes you need to be prepared to charge a fee instead and tell people why you need to work that way for that kind of business. Work out the schedule of services and fees so that you are ready to operate on that basis when the occasions arise.

50-plus clients – This is the lapse decade, and advisers need to understand it and how it operates. These clients may not be experiencing high income growth. Their premiums are rising much faster than their income. You can cower under your desk and pretend that they aren’t going to notice or you can get pro-active with options to manage increasing premiums: reducing cover, increasing wait periods, and so on. Retaining effective catastrophe cover during the period when your clients are most exposed to risk is more important than having ideal’ cover cancelled when the client receives a big hike in premium at renewal.

Underinsurance and the design of your risk plans – Including level premium options needs to address the trade-off between sustaining cover later and worsening the underinsurance problem today. For example, promoting level insurance options is fine if the client is taking out the ideal level of cover. But if the client is reducing the amount of cover they buy that cover disadvantage has to be considered alongside the advantage of a more sustainable premium.

✱

✱

✱

they have any insurance direct – and be ready with a strong comparison showing the value of the advice-based solution you provide. The list of ways advisers can out-perform direct is long, but here are three of the most important: Determining correct cover amounts, configuring complex benefits, and connecting cover to family trusts and small business interests.

New medical products - nib will make a splash with their new product, and whether you like their product or not, you can capitalise on the increased focus on health. Perhaps you have spent the last ten years educating clients on the value of major medical insurance. You might be forgiven for being surprised at a product which focuses on making lots of claim payments for smaller medical costs. But this will raise awareness, so enjoy the attention

✱

✱

This is likely to be the first year in a while in which we have a growing economy, low interest rates, no major shocks (God willing), and a reasonable handle on regulation. 2014 should be all about growth!

Life re-pricing – Premium changes following the taxation changes of life insurance have not followed the anticipated script. We do not yet know how this will play out. Some insurers have lower rates for new business than they have for in-force business. That indicates that something has to give. Will there be some increasing prices? Or will there be more pressure on in-force books?

Income protection re-pricing – The experience in Australia in some IP books is very, very, bad. There may be some regional factors in operation but there are enough similarities to mean we should be concerned about what is about to happen here. We have seen three companies increase IP rates recently (AIA, AMP, and Asteron), while Sovereign has taken a more mixed approach with reductions in some areas and increases in others.

Attitude – This is likely to be the first year in a while in which we have a growing economy, low interest rates, no major shocks (God willing), and a reasonable handle on regulation. 2014 should be all about growth!

Best wishes for your break and the new year!

✱

✱

✱

Keeping New Zealand financial advisers strong 0800 88 22 88 021

INSURANCE

{ INSURANCE }

INSURANCE PRODUCT NEWS Providers showcase their latest developments and what is on offer for 2014.

I

n our recent product release we made some enhancements to our Trauma Cover, making a great benefit even better. We’ve also refined our policy wordings across our Assurance Extra and Business Assurance products, providing consistency across benefits, improved clarity and greater certainty at claim time.

ONEPATH Trauma Cover enhancements Trauma insurance is becoming ever more popular as customers realise the benefit of this type of insurance. This year we introduced some great changes to our Assurance Extra and Business Assurance Trauma products that will mean OnePath customers have even more opportunity to claim for a serious illness.

Changes to our trauma products include: ❤ enhanced trauma definitions ❤ new partial payments ❤ new conditions ❤ emoval of the stand-down period for a number of partial payments.

Enhanced trauma conditions include improvements to both full and partial payments for melanoma and broader cover for carcinoma in situ (under the partial payment). With cancer making up 50% of trauma claims, many customers will benefit from the enhanced cancer definition.

Other trauma definitions that have been improved include dementia, organ transplant, primary pulmonary hypertension and severe inflammatory bowel disease.

A new partial payment was introduced for customers who undergo an ileostomy and/ or colostomy but do not meet any of the full trauma definitions. In addition, a new partial

022

WWW.GOODRETURNS.CO.NZ

payment for burns of limited extent will mean that customers do not have to meet the full burns definition before a claim is paid.

New trauma conditions that have not previously been covered include open heart surgery, cognitive impairment and Creutzfeldt-Jakob disease.

OnePath’s policy enhancement benefit means that existing customers who joined us from May 2004 will benefit from these changes.

Policy wordings – Less grey, more clarity In today’s environment we understand that it’s more important than ever for you and your clients to have confidence in their insurance policy.

Our policy wordings across Assurance Extra and Business Assurance now provide greater consistency across benefits and more transparency to reduce uncertainty "or “grey”’ areas.

For more information please visit www.onepath.co.nz or email us at insurance@onepath.co.nz for a full product release overview.

cancer, heart and arteries, brain and nerves, loss of function and other health events.

Made for the future, where New Zealanders increasingly survive illnesses that previously would have been terminal, Progressive Care delivers value, transparency and fairness.

Your client receives a lump-sum payment in line with the severity of their medical condition as diagnosed by their doctor.

They can claim for multiple medical conditions and make subsequent claims if their condition becomes more severe, subject to any previous claims made under the policy. Progressive Care does not “pay and close”, because cover remains in place for life, even after a claim.

Talk to us about Progressive Care today – the base premiums are on hold until October 2017 for policies issued before 21 October 2014 (rate for age increases will still apply).

For more information visit www.sovereign.co.nz/productchanges or contact us on 0800 768 287.

Some facts to consider In 10 years to 30 June 2013, the amount in trauma claims Sovereign pays annually has quadrupled. In the past year, we paid out over $51 million to trauma clients. Cancer claims alone accounted for $34 million.

SOVEREIGN Did you know only 15% of New Zealand households have trauma insurance?

They say it’s too expensive, too hard to understand, and doesn’t pay out when they need it to.

We are excited to introduce Progressive Care, a first for the New Zealand market, connecting you to New Zealanders who want affordable cover.

Progressive Care represents the new generation in trauma insurance, offering comprehensive cover for 62 medical conditions grouped under five categories of conditions –

PARTNERS LIFE Partners Life has announced several benefit improvements and all will be passed on to existing policies automatically by virtue of the Guaranteed Upgrade of Future Benefits feature.

Life Cover and Life Income Cover A new benefit called the Repatriation Benefit is added. It works like the Bereavement Support benefit by accelerating payment of the life or life income cover to reimburse the

INSURANCE

costs (to a maximum of $20,000 or three times the monthly benefit for life income cover) of bringing a loved one home if they die overseas. This is payable in addition to the Bereavement Support benefit.

Total and Permanent Disability Cover Partners Life has added the combined loss of sight in one eye and loss of one limb to the definition of TPD. This pays the full TPD benefit, not a partial benefit. The improvement has also been added to the definition of TPD in the built in TPD benefit, which pays an additional lumpsum of 24 times the monthly benefit, under income cover, mortgage repayment cover and household expenses cover.

Trauma Cover Under trauma cover there are some changes too, the commencement date of the 90 day standdown period, which applies to some conditions, changes from the date the policy is issued to the date Partners Life receives a fully completed application. In addition, they have removed the requirement that clients survive 14 days after being removed from all life support (which applied only to the intensive care and coma conditions). Clients on claim under all conditions are now simply required to survive 14 days.

Monthly disability products: Income Cover, Mortgage Repayment Cover and Household Expenses Cover To these products several changes have been made: ❤ The waiting period has been removed from the critical illness benefit, meaning that as soon as a client suffers one of the 11 defined trauma conditions, benefits will be paid for six months and regardless of whether the client is disabled or not. This allows a client who can work the opportunity to take time off to recover properly and still receive a benefit.

Where the client is also disabled (and the waiting period commences) the waiting period will run concurrently with the critical illness benefit, meaning that if the client is disabled while receiving the critical illness benefit, only the unexpired portion of the waiting period will apply after the last critical illness benefit is paid and the first disability benefit becomes payable. ❤ Additional waiting period options of 52 weeks and 104 weeks have been added. ❤ The optional Reduction in Waiting Period Benefit has been expanded to allow reduction in waiting period without evidence of health, in other reasonable circumstances, not just a reduction in sick leave. Examples of other reasonable circumstances might be a change from self-employed to employed or coming off a group income protection scheme for instance. ❤ The Increasing Income Benefit has been expanded to allow self-employed policyholders to increase their income cover sum insured without evidence of health where an increase in profits justifies them giving themselves an increase. ❤ A new benefit has been added to

Did you know only 15% of New Zealand households have trauma insurance?

They say it’s too expensive. mortgage repayment cover. The Mortgage Restructure Benefit allows clients who have restructured their mortgage and now have higher monthly repayments to increase their cover regardless of health. ❤ For household expenses cover, additional expenses have been added.

Clients can now insure: ❤ Body corporate fees; ❤ House, contents and motor vehicle insurance premiums; ❤ Hire purchase, bank loan or other personal loan (excluding mortgage) repayments; and ❤ Private school fees.

Where these are paid annually, 1/12th of the annual amount will be allowed.

Private Medical Cover Because Partners Life believes that private medical cover should cover the costs of major diagnostic tests even if the client does not select the optional Specialist and Tests Benefit, the Major Diagnostics benefit is in the base plan. This works fine except where the client has chosen a high base plan excess.

To ensure the Major Diagnostics benefit remains relevant to the increasing number of clients selecting large excesses, the excess applicable to claims under the Major Diagnostic Tests benefit has been changed to the lesser of the base excess or $250.

Loss of Revenue Cover Partners Life has removed the distinction of sole trader under the offsets provision.

This means that the only offsets under Loss of Revenue Cover for all clients, are amounts received or entitled to be received by the business from any other business insurance policies which are payable in relation to the disability of the life assured. Specifically, the following will not be offset: ❤ On-going business income which continues to be received during the period of disability of the life assured; ❤ Personal income protection policies payable to the life assured in respect of their disability; or ❤ Benefits from ACC or any other government organisations payable to the life assured in respect of their disability.

ACCURO One of the things Kiwis take for granted is continued good health. We all know people who rely on the “she’ll be right” attitude, and don’t have any protection in place.

As a New Zealand insurer, Accuro wants to help change these attitudes by offering health insurance that is simple, accessible and an easily understandable living benefit, which may in turn encourage people to invest further in life protection products.

By investing in health insurance, Kiwis are not only protecting their health and wellbeing but also their ability to get back to work faster, and to quickly regain quality of life should health problems arise.

At Accuro we are proud to be New Zealand owned and operated.

We have been specialising in health insurance for more than 40 years and during this time we have built up a wealth of experience and understanding of what New Zealanders want and need.

This is reflected in our market-leading products, which are constantly being enhanced to ensure we provide competitive and comprehensive cover.

SmartCare+ has been developed to cater for those who require an executive level of benefits. Central to the SmartCare+ range is the comprehensive Hospital and Surgical+ base plan, and this can be tailored by adding one or more of Accuro’s add-on modules: Specialist+, GP+, Natural Health+ or Dental and Optical+, in any order.

Key benefits of SmartCare+ Hospital and Surgical+ base include: ❤ General surgery cover up to $300,000 per person, per policy year. ❤ Non-surgical cancer treatment up to $65,000 per person, per policy year. ❤ Major diagnostic procedures up to $300,000 per person, per policy year. ❤ Cover for Non-PHARMAC drugs.

This year we have added some exciting new benefits to SmartCare+ including: Cover while in Australia (SmartCare+) The benefit reimburses medical costs for nonacute medical conditions that are incurred and treated in Australia under either the surgical or non-surgical benefit.

Loyalty screening (Specialist+) After three years of cover, this benefit covers the costs of a mammogram or prostrate check.

Second opinion benefit (Specialist+) This benefit enables members to consult an alternative specialist for a second opinion.

With the increasing pressure on public health care it remains Accuro’s mission to help Kiwis realise the importance of health insurance, in a bid to break the cycle of under-insurance in New Zealand.

023

SPECIAL REPORT

{ PROVIDING VALUE }

So what's your story?

Advice to clients has changed. No longer do advisers promise to make people wealthy. Now they need to know client needs.

{ MIKE MOORE }

H

ow do you describe yourself?

Let us pretend you are sitting on a plane beside a stranger.

As always they ask you about yourself and what you do.

Do you say something like, “I am an authorised financial adviser, competent and qualified to give you all sorts of information about financial products and services”, or perhaps, “I am a registered financial planner or a risk adviser” or any number of other titles?

You can almost watch their eyes glaze over.

Surely we want to describe our profession

024

WWW.GOODRETURNS.CO.NZ

in terms of the outcome for the client.

For example, “I pay off business loans if something goes wrong”.

Or perhaps, “I ensure people can retire in comfort and security”.

It is interesting to go back over the last few years and look at articles, written by others and me. The focus has been on compliance, regulation and complexity.

I admit in the old days some of the extreme statements now cause me to shudder; something like, “I make people wealthy” probably does not cut the mustard these days.

But how dull and grey are we becoming?

Why don’t we redefine who we are and how we would want others to describe us if they were referring us to others? You might like to do a check list on your own practice, for example your website. ➢ Does it simply and honestly state what you do for your client, not all the process and procedure, just the intention? Does it tell the client how to access your services, and how you get paid? Are there comments on the website from clients that are happy with your service and who are happy to recommend?

SPECIAL REPORT

With the white and yellow pages almost just a memory you can be almost certain that anybody thinking of using you is going to visit your website just to check that you do, in fact, exist.

You might like to ask half a dozen friends to critique your website. What would they say? Hopefully, it is warm and inviting and lets people get in touch with you easily and correctly identifies what and how you can assist them. It takes away the fear.

What about you? Are you presented in a business-like way, clean and tidy, and with good habits, simple ones like turning up on time and saying please and thank you.

It doesn’t sound very complicated but you would be amazed at the number of advisers who do not fit any of these categories, never mind all of them.

Your presentation. What about asking the same friends to review your paperwork, brochures and even what your office looks like if someone comes to visit. Again is it the sort of place you would go to if you were looking for discreet, confidential and professional advice?

This is absolutely back to basics, again I find many advisers either have never done it or have forgotten to check it.

One of the themes that I have been on about for the last few years is that now we have been through a significant change process it is time to consolidate and make our business not only more professional but also more profitable. It seems that over the last decade that the old idea of an adviser whose main skill was finding new clients has now morphed into the farmer of clients where most of the focus is on process and not personality.

Client acquisition Client acquisition is much more frequently these days through purchase rather than marketing. However, that does not change the fact that if you want to be successful and grow your business, the first thing you have to do is the simple things. Look and sound like the sort of person you would deal with should you be seeking a valuable financial

Over the last decade that old idea of an adviser whose main skill was finding new clients has now morphed and most of the focus is on process and not personality. service or advice.

I had an interesting discussion the other day with quite an affluent business person. I asked them if they had an adviser.

They advised that they used to, but given that they couldn’t offer any advice other than interest rates, and it all sounded too complex and too hard, they decided to just do their own thing. This of course generally means nothing happens.

Curious, I asked what they would have preferred. They said that the first thing they would have liked would have been a bit of exploration of where they were at and where they wanted to go. Secondly they wanted some sage advice on how to get there.

Then and only then advice on the process.

I asked if he had received that level of service would he have been happy to pay for it?

The guy concerned expressed surprise at my question: Of course he would.

He didn’t expect a free lunch from his lawyer or accountant, nor did he expect it

from his financial adviser, but first of all and before he did anything he wanted to know what was in it for him.

Company line If I read all the trade journals and all the people who are industriously keeping us all compliant, I would have thought that there were literally thousands of advisers out there helping the public do better. Indeed there are a lot of people who have the credentials to do so. But then I find that there are an awful lot of them who do not see customers at all, or if they do they only do so as a representative of a bank or other organisation and they are only empowered to feed the company line. That is not to say that it is not a good company line, but it is only one of them.

Indeed, I really question how many individual advisers there are out there who sit down on a regular basis with potential clients and explore their finances with them.

I expect the number is in the hundreds, not the thousands. If there was ever a time when people need advice and would value it, it is right now.

So let us pretend that you have just purchased a customer base and you are meeting with the client, previously unknown to you for the first time. What is your airplane talk? Do you spend the next 20 minutes advising how qualified you are, how much experience you have, the financial resources of your organisation and why they should trust you, or instead do you spend that time getting to know the client, not about their hard facts, but rather about who they are and where they are trying to get to?

We seem to have lost the art of simply getting to know people and earning their trust, it is certainly necessary to go through all the compliance procedures, complete all the forms, tick all the boxes and make sure they are filed in the correct places. But this is not going to work forever, as gradually you lose clients, do not know how to find new ones and cannot explain what you do.

So isn’t it the time to have a check up from the neck up?

Unlock the value of your practice

PRACTICE MANAGEMENT

{ REGULATION }

LIFEONTHE OUTSIDE LOOKINGIN A

{ ED RICHARDS } With AFA ranks dwindling, has regulation had the desired effect on the financial advice market?

026

WWW.GOODRETURNS.CO.NZ

year has passed since I had a bird’s eye view of the financial services industry in New Zealand.

Running a leading association allowed me to familiarise myself with the busy world of advisers and suppliers as reforms to financial services were invoked.

The primary focus was to advocate vigorously for the standalone adviser business model, which was done with conviction and relative success.

The objective was to make New Zealand’s financial regulations – which lest we forget had their roots in the global investment crisis – workable and not “cost-excessive”. At the same time, there was a tacit recognition of the benefits of some regulation: the "professionalisation" of insurance, mortgage and investment professions to rank alongside accountants, lawyers and real estate agents.

Readers may recall politicians on both sides of the House collectively crowing how the Financial Advisers Act would prevent New Zealanders “being hurt” by finance companies.

Today, it is fair to say that the outcome is a moveable feast, albeit a feast that has most of the right ingredients for consumers in the years ahead.

A few warning bells have flared: readers will have heard about the independent AFA report published this year noting that there are 1895 AFAs compared to 2000 a year ago – a 5% decline. While AFAs may be a minority component of the adviser market, the FMA and professional bodies continue

Politicians on both sides of the House collectively crowed how the Financial Advisers Act would prevent New Zealanders ‘being hurt’ by Finance Companies. to tout AFAs as the future direction of the advice-based market.

Given the purpose of the Financial Advisers Act - “to promote the sound and efficient delivery of financial adviser and broking services, and to encourage public confidence in the professionalism and integrity of financial advisers and brokers” – current AFA numbers must be of concern.

Public confidence in any industry presupposes that the sector is stable and growing. Sure, good levels of business have occurred during the positive recovery in some investment markets in any event.

Still, there must be furrowed brows in the FMA’s strategy team.

Has the FMA struck a practical balance between regulation – protecting the public – and encouraging market growth in the

PRACTICE MANAGEMENT

Ask CCH

Body corporate unit size poser sector? The pressing question remains: Will financial services grow because of or, more likely, in spite of financial regulation?

If all insurance and mortgage advisers were required to become AFAs (as originally proposed) would their numbers decline, too?

The Government’s future cost-benefit assessment of the Financial Advisers Act will provide a critical “health assessment” – a task best done by independently rather than by the FMA itself. Meanwhile, at a macro-economic level, the contribution of financial services including insurance has grown slowly over the last four years, accounting for around 5% of New Zealand’s GDP in 2012, up from 4.7% in 2008.

Do these issues matter to the general public? Yes but they don’t know it! All that counts are growing investment or KiwiSaver portfolios, and protected lives and assets through competitive and comprehensive cover.

This still leaves that group of New Zealanders who continue to remain underinsured or under-invested, either because of an overwhelming love affair with paying off mortgages or because they are just cash-starved.

Perhaps there is little need for the public to have an interest in AFAs, RFAs, CPD records, disputes resolution service providers; nor can they be expected to be excited about anti-money laundering protection and requests to provide copies of passports, driver licenses or telephone accounts to verify their ID. The Financial Markets Conduct Regulations, KiwiSaver default arrangements and the Code of Professional Conduct for AFAs itself would be lost on most people.

Odd, then, that this array of statutory and regulatory protection and new adviser standards actually exists to protect the public. Advisers and providers can only keep “the main thing the main thing”: Offer comprehensive insurance and financial advice according to ‘best practice’ standards and love looking after clients How is the typical business world outside financial services different? A lack of professionalism in the cut and thrust of the business world is surprisingly common – creating opportunities for those who prefer excellence over mediocrity.

Codes of conducts are rarely mandatory, clients don’t pay their bills on time, and plenty of tradesmen still fail to do their work according to industry standards.

Apart from large public companies and NZX firms, talk about Companies Act and Director obligations is comparatively rare.

Businesspeople, suppliers and sales folk often act unashamedly and unwittingly in their own interests, oblivious to putting

clients first.

Real estate agents keep filling up mail boxes with unsolicited, standardised, letters promising the earth. To quote from a letter this month: “I would like to reinforce that this correspondence is not a ploy to gain listings and I still have a genuine interest in properties like yours.” Not a selfcontradictory hint in that sentence, right?

There is a Real Estate Agents Act 2008, but has it really improved the behaviour of agents?

The bank continues to "try it on", asking if it is okay to transfer family insurances to them, irrespective of one’s reply that we have an excellent risk adviser and a proficient AFA who provides sound investment advice. When we pointed out that liabilities could transfer 100% to the bank if they provided insurance or investment advice without a proper advice process and something went wrong, the bank withdrew its offer – for now. We utilised the services of a house and contents adviser until recently. Due to the change to sum assured policies we transferred to a boutique provider of full replacement insurance cover at annual premiums 15-20% less.

From the outside looking in, New Zealand’s financial service participants seem more fortunate to be regulated than not, though not unconditionally so. The FMA must remain cautious about over-regulation stifling business activity and adding significant transaction costs ultimately payable by the public. International surveys show that “over-regulation” and compliance costs are a major concern for global financial leaders.

The Government would therefore be best to allow an extended settling in period without significant change, other than looking at ways to reduce fees and "unrecoverable" compliance and time management costs. Also, while industry participants are used to change, some “change fatigue” has become apparent.

An upgraded Financial Adviser Act could increase entry barriers to entry for a sector that has demographic (ageing) issues – and limit financial advice and products to many who need this.

Lastly, there is a nagging sense that the reforms of the last few years have “sanitized” and pigeon holed “financial advisers” somewhat without fully appreciating the diversity of this multibillion dollar industry.

The individual characters and talents who comprise this action-packed field must be encouraged to rise to the top, attracting profitable growth, healthy balance sheets and happy clients.

A confident financial sector remains the key objective for everybody.

QUESTION:

A block of seven residential units managed by a body corporate was destroyed in the Canterbury earthquakes.

One of the units was larger than the other six, which were of equal size and shared the same ownership interest (previously known as "unit entitlement" under the Unit Titles Act 1972).

Insurance premiums for the seven units were not calculated in terms of each dwelling’s ownership interest, which meant the premiums were invoiced disproportionately, possibly in error.

The insurer has paid out the proceeds of the insurance claim. The body corporate has not yet passed a special resolution to determine the application of insurance money, as allowed by s 136(4) of the Unit Titles Act 2010.

Should the insurance settlement be apportioned between the proprietors (i.e., unit owners): * In terms of their payment of the insurance premium, or * In terms of their ownership interest?

ANSWER:

It is assumed that all seven proprietors will resolve not to apply the insurance money to reinstate the unit title development and will resolve to cancel the unit plan.

It is likely that a court will distribute the insurance payout according to the existing ownership interests, unless a valuer can now properly reassess the post-earthquake value of the demolished units, taking into account market sales of the units, free of pressure, before the earthquake.

Cancellation of unit plan and decision not to reinstate unit title development Sections 177–189 of the Unit Titles Act contain the provisions relating to cancellation of unit plans. The body corporate has two options: • Apply to the Registrar of Lands for cancellation of the unit plan (s 177) • Ask the High Court to cancel the plan under the “just and equitable” criteria outlined in s 188.

On cancellation, the underlying fee simple (freehold) estate (or leasehold, as the case may be), including the common property, vests in the owners in the shares that their ownership interests bore to the development as a whole immediately prior to cancellation (ss 38(3) and 180).

The application for cancellation of the unit plan must be accompanied by a certificate from a registered valuer reassessing the ownership interests and proposed ownership interests (if any) of all the units in the unit title development (s 177(7)).

REFERENCE: Unit Titles Act 2010, ss 38, 136, 177–189, 210

Get fast answers to your everyday tax and legal questions...

The CCH Question and Answer service allows you to ask CCH Analysis everyday questions on tax, trusts and investments.

Be the one who has All the answers  s ubstitute your research time with income earning work  b uy yourself more time by having someone else to do the research  h ave peace of mind with the support of a second opinion  s ave consultant fees for simple queries  g et answers to your complex questions  k eep accurate records, as answers are provided in writing  e xtend your areas of expertise by having expert support in a variety of fields

Call CCH today to find out more on 0800 500 224 or go to www.cch.co.nz/qanda References: Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill.

PAA NEWS

Big change but also big opportunity?

2013 has been a year of significant change and 2014 is likely to bring more of the same.

By: Bruce Cortesi

I

t almost feels passé to say that it’s been another year of significant change in our industry – every year seems to brings with it myriad new developments.

But 2013 has proved once again that you need to be quick on your feet in this industry.

No doubt 2014 will also bring with it a slew of changes and developments and one thing seems undeniable: as change is a constant, success in this industry is integrally linked to our ability to find ways that the new environment can work for our business.

The game-changer: LVR limitations At the risk of appearing flippant, let’s turn this high-LVR issue around and look at it as an opportunity.

While the RBNZ decision to limit lending to borrowers with an LVR of more than 80% has not been a popular or easy one, the intention can’t be ignored. Our central bank wants to ensure that bank balance sheets are stable; that the heat in house prices corrects softly – no repeats of 2007 to 2009 and 2011 please; and that high-LVR borrowers are protected from the impact of increasing interest rates. That’s wise in anyone’s book given the OCR is forecast to rise by one percentage point in 2014.

But good intentions aside, this decision has undoubtedly left many potential buyers out in the cold, not to mention playing havoc with adviser businesses, especially when the banks turned their attention to pre-approvals on mass.

While banks will have a fresh stock of over-80 per cent lending available once the pre-approval backlog clears, the opportunity for advisers is much broader than being the first to the table for these loans.

These are the times when quality mortgage advice and commitment to helping someone into the market (even over a significant period of time) makes the difference and importantly, gets attention.

We’re talking about clients who on the whole need more assistance than established or lower-LVR borrowers: first-home buyers, those who are experiencing a change in their

028

WWW.GOODRETURNS.CO.NZ

circumstance, such as a separation, and those who are self-employed or own a small business.

And that’s the key opportunity the current LVR environment offers the adviser community – this is the time when the expertise and knowledge of quality advisers is most needed, by those who need it most.

It’s an opportunity to highlight what advisers bring to the mix.

Whether it’s helping a client going through a separation to get back into the market on their own; helping borrowers manage the new live deal conditions for over 80 per cent bank lending; assisting clients in navigating guarantor-secured lending; or assisting with the more complicated Welcome Home Loan option, these are all opportunities to positively differentiate the adviser experience.

Added to that, it’s a prime time to showcase the adviser relationship model - working with clients over short or extended periods of time; guiding them on how to get there in achievable steps and ultimately giving them confidence to stay in the market and achieve their goal.

Time and resources have to be managed with our own business objectives in mind.

But for those who put the time in now, these will be clients for life and advocates of the adviser proposition.

How well-known are the new, simplified rules for overseas pensions?

One of the latest issues facing investment advisers – and which is set to play a role in 2014 headlines – is the proposed changes to overseas pension transfers. Aimed at simplifying the existing tax framework, the new rules which look very likely to pass into law, would come into effect on April 1 next year. It’s estimated that around 400,000 residents could be impacted.

Taking a firm line and retrospective view, the Government has indicated that it will take action on those who have previously transferred their pension and not followed existing rules to letter. While the new rules have stripped back much of the complexity

PAA NEWS

and heavy compliance of the current framework, like anything tax-related, it’s fair to assume that the new rules don’t necessarily seem simple to clients.

The main points of the new rules are: ➤ Clients have four years from when they enter or return to New Zealand in which time no tax accrues. ➤ After that point, the taxable amount is calculated based on the number of years of residency in New Zealand. ➤ Important distinction: The amount on which tax is payable relates to the amount of time a client has been in the country, not the date the transfer occurred. ➤ A 25-year schedule sets out a percentage scale for the amount which is taxable – from 0 to 25 years, starting at 4.76% and reaching 100% at year 25. So, for example, if a client has been in the country for 10 years, 48.45% of the pension amount transferred is taxable. ➤ This amount is then added to the client’s tax return as income, on which they will pay tax at their marginal tax rate. ➤ However, for new transfers that occur before 1 April next year, a 15% rate will apply. So if someone has been in the country for 25 years or more, transferring before this time will reduce their taxable rate from 100% to 15%. ➤ The new rules apply to overseas pensions, excluding Australia.

So essentially, the longer someone has been in the country, the greater their tax liability.

Given the time it takes to transfer a pension and the need to look retrospectively, there will be a lot of people who need the assistance of a quality investment adviser before the new rules come into effect. A busy start to 2014.

Online insurance Advertising campaigns promoting low cost, hassle-free insurance are reasonably common place these days. Understandable too.

With underinsurance levels in New Zealand as they are it’s not surprising that providers want to show consumers that it’s not the “toohard basket” product it’s often perceived to be.

The latest development in “repositioning” insurance as hassle-free is buying online; not to be confused with online quoting systems - but rather the entire process from start to finish, ending with the consumer paying online.

In simple terms, if the ability to buy insurance online means that more New Zealanders choose protection, it’s a good thing. But importantly for advisers - and from a pragmatic business perspective - this model is here to stay. It’s now a case of assessing the impact and opportunities.

It is early days so a few questions are yet to

be answered – like whether some insurance types are more suitable to the channel (Life versus Income Protection as an example) and whether there are any disclosure fishhooks etc.

But there’s no two ways about it – some of these online underwriting engines are very clever, intuitive and exceptionally customer friendly. There’s clearly been considerable thought about how to translate the insurance application and approval process online.

If you haven’t experienced the process yet, when you get time have a look at www.kiwicover.co.nz (Sovereign’s online engine) and www.pinnaclelife.co.nz for a first-hand opinion.

The question is how does this new model impact your business as an adviser?

Here are some of our thoughts to consider.

Defining the customer profile: Those seeking value for money with an awareness of the worth of insurance advice are the ones you can add real value to and do good business with. Defining who these customers will become more and more important as online insurance grows.

Drawing attention to the value of advice: Take the perception that online insurance is a competitive threat out of the mix and there’s an opportunity to clearly define your value.

When a different channel offering the same product enters the market, it highlights the benefits of the existing model.

Working with hybrid models: Treated as the application engine and supported by your advice, models like www.insureYou.co.nz (offering Fidelity Life and Tower products) could be a business opportunity. Hybrid models where consumers can action their insurance requirements online, but be confident with your advice that they are choosing the right cover, may be ideal for certain clients.

And if you really want to think laterally, is there an opportunity to offer a review service for those who initially purchased insurance online but over time have lost track of what they have and what they now need? As with all new approaches, a segment of consumers will give it a go but revert to traditional service models when the time comes for one-on-one help.

The online insurance model is not for everyone. Bu then, neither is the advice model (even with all is benefits). The two can exist quite nicely together and in fact, support the business objectives of each in many ways.

No doubt 2014 will bring more developments and a clearer picture on how consumers are responding to the new model and how this relates to your business.

your business, your future, your choice

Independent thinking for advisers by advisers

• Advocacy at the highest level (Government) • New CPD portal, with structured learning capacity • Business training for advisers • PAA Friendly Guides for Advisers • ASSET magazine and Mortgage Mag (monthly) • Monthly newsletters, and industry updates • Industry conference in Auckland – May 16-17 2013 • Regional meeting programme • National Roadshows • Professional Indemnity Programme and Group Life Cover • Seven holiday homes And a dedicated team to assist you Website: www.paa.co.nz

Professsional Advisers Association Inc, PO Box 911 335, Victoria Street West, Auckland 1142 Phone: 0800 275 722, Fax: 0800 275 712 Email: admin@paa.co.nz

029

INVESTMENT

{ KIWISAVER }

JUMPING THE FENCE A former adviser to advisers is now planning to see clients himself.

BY: Amanda Morrall

T

hroughout his career in the financial services sector, Auckland's Michael Coote has filled many a role, including columnist, radio broadcaster, seminar presenter and communications manager.

To those familiar with his work, Coote's latest incarnation as a soon-to-be authorised financial adviser may seem an unlikely move, especially for someone so well versed in macro-economics.

Reflecting on his foray into the advisory sector, Coote admits it's a departure from his earlier work and yet he wouldn't describe it as a radical one.

"It's really not all that drastic a change,'' Coote says of his new position as a financial adviser with AMP's 360 unit.

"I'm still working in the financial services industry where I have basically worked my whole professional career.”

Change — career or otherwise — is really a matter of adaptation, he suggests.

“It’s using what I have learned in the past and applying that to a new set of circumstances.

AMP’s 360 unit, less than six months old, consists of about 20 salaried advisers tasked with engaging clients who do not have financial advisers but could benefit from some guidance.

Unlike AMP's dedicated KiwiSaver team, which devotes its time to getting members into risk and age-appropriate funds, the 360 group offers a full slate of financial advisory services.

"The carve-out is that we don't do the personalised KiwiSaver advice," says Coote.

"We give class advice and get them to

030

WWW.GOODRETURNS.CO.NZ

In many cases, people can tell you why they bought the policy, but in that time interval things have moved on. sign up if class advice is sufficient.

We do however give personalised advice on Category Two insurances and mortgages as QFE [Qualified Financial Entity] Advisors."

Until Coote receives his formal designation as an Authorised Financial Adviser from the Financial Markets Authority, the scope of his work with clients has to be limited.

However, regulatory constraints haven’t got in the way of relationship building.

"There's a real degree of service, and even if it might not add a lot of revenue, it does add a huge amount in terms of the integrity and clarity of advice people are getting. For a lot of people, they haven’t thought about the financial arrangements they’ve entered into, and whether they reflect their needs, goals and objectives.

“The thinking is very similar whether you are talking about KiwiSaver as a retirement savings vehicle, a deposit savings vehicle or the various insurances you can take out.

The questions are very similar: ‘What am I paying for and am I getting

what I am paying for?’”

Few have the answers to those questions, even those from whom you might expect a higher degree of understanding.

"The common experience is that the people who most want to talk to you have either nothing in place, or they have, but they've had it for quite a while. You can be looking at policies that were put in place more than 10 years ago.

"In many cases, people can tell you why they bought the policy, but in that time interval things have moved on. Even if the rationale was valid then, it may or may not be now."

In many cases, clients appear to have been sold products that they didn't necessarily need or understand.

"They don’t even know what they can do, why they could change their cover and that there are newer ways to do things."

As an overlay to these discussions, Coote encourages clients to consider the big picture and to make whatever tweaks and changes within the context of short, medium and long-term goals.

"If you look at what outcomes the client is seeking, you can reverse engineer and bolt together what they want to achieve."

This kind of one-on-one work with clients may be new territory for Coote. But it’s not a huge deviation from his career trajectory.

At his former employer, Tower Investments, where he spent more than a decade, Coote spent a good chunk of his time working with advisers, helping to bring them up to speed on domestic and global economic challenges that could affect their work and their clients wealth.

With a keen sense of those global and domestic issues still intact, Coote's rich knowledge base in this sphere won't be wasted. Quite the opposite, it could prove a key point of difference.

"I spent all those years as seminar presenter and radio broadcaster, where I dealt directly with retail clients in what was effectively an unregulated climate. I'm very used to communicating with retail clients about issues that matter, helping them to identify what it is they are trying to do, and focusing on the things they should be thinking about to reach their goals. So in that sense it's almost back to the future.”

Former employer Sam Stubbs, ex-CEO of Tower Investments, believes Coote's trademark wit, intellect and sensitivity will prove an asset in his new line of work.

"Michael is a rare jewel in the New Zealand financial services industry, with a large brain to understand the issues and options, the moral compass to do the right thing and the affability to make the advice process a very pleasant one,’’ said Stubbs, who worked closely with Coote in the retail client space.

So what advice will Coote offer on

INVESTMENT

Michael Coote

KiwiSaver when he is in the position to do so?

It depends on who’s asking.

First-time home buyers will want to make sure they are in the most appropriate fund to achieve optimal savings, while they are in KiwiSaver.

Default funds, as the most conservative

option, may fit the bill in most circumstances, because members needs to protect their capital for short-term access. But depending on the timeframe for purchase, some may do better in alternative funds, he points out.

“If they are in the default funds they are roughly in the right place to be saving for

a first-time home, but they should also consider taking on a little more risk".

The discussion is an important one.

Younger members enrolled in KiwiSaver and directed into growth funds on basic demographic assumptions (i.e. higher risk tolerance because of the youth advantage) could be disappointed if they end up wanting or needing their money for a firsthome deposit and try to withdraw it at a time when markets are depressed.

“You can wonder what many retirement savers are doing [in growth funds] because they are sensitive to a loss. They’d be pretty grumpy if they came out worse than had they stayed in a term deposit.”

Given Auckland house prices and new loan-to-valuation restrictions set by the Reserve Bank, many first-time home buyers may think that KiwiSaver won’t make a difference to their ambitions to get on the property ladder.

But Coote sees KiwiSaver as playing an increasingly important role.

That’s especially the case if the Auckland Unitary plan goes ahead, making housing more affordable for many New Zealanders on average incomes.

“That’s going to open up a lot of opportunity. There will be a melding between what people can afford and affordability of houses that will be improved significantly from what is available now.”

On the home buying front, he expects KiwiSaver will play favourably to those looking to borrow, as under the new positive credit reporting system it demonstrates a pattern of saving.

Coote’s clients will benefit from his advice without having to pay an upfront cost, under the 360 arrangement AMP offers.

He wonders how many New Zealanders would be prepared to pay for advice, if it were not from employees such as himself, paid by banks and other institutions.

But he’s under no illusion that the need for it will be there, especially if New Zealand adopts a self-managing superannuation scheme similar to that in Australia and other nations.

“Of course, New Zealanders always want free advice. They often follow it if it’s free, regardless of the quality, and not follow it if it’s clearly good, but has a price. That’s the typical New Zealand experience, ‘free’ is often seen as desirable.”

AMP clients who benefit from his advice could be in store for a different experience.

Keeping New Zealand financial advisers strong 0800 88 22 88 031

ASSET ADVISER

{ MANAGED FUND PERFORMANCE TABLES } Name

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price %

New Zealand Insurance Fund Cash AMP KiwiSaver Cash Fund 1.3249 2.75 2.91 3.27 AMP Prem PSS OnePath NZ Cash 1.4284 2.87 3.04 3.21 AMP PSS Select Cash 1.3558 2.60 2.72 2.84 ANZ KiwiSaver-Cash 1.1779 2.86 3.03 2.94 Aon KiwiSaver OnePath Cash 13.8473 2.50 2.69 2.92 Aon KiwiSaver Tyndall Cash 12.7598 3.09 3.33 3.61 ASB KiwiSaver Scheme's NZ Cash 1.2724 2.93 2.66 2.84 Asteron Rtrmnt Savings Plan Deposit 9.8558 3.74 3.37 3.42 Asteron Super Yield Deposit Fund 9.8796 3.74 3.37 3.42 Asteron Superplan 2000 Capital Fund 2.0694 3.61 3.38 3.59 Asteron Superplan Capital Fund 2.4781 3.08 2.85 3.08 FC KiwiSaver Scheme's NZ Cash 1.2712 2.92 2.65 2.82 Grosvenor KiwiSaver Enhanced 1.3486 3.10 3.30 3.72 Income Fund Mercer KiwiSaver Cash -3.06 3.24 3.74 Mercer Super Trust KiwiSaver Cash -3.03 3.17 3.68 OnePath KiwiSaver-Cash Fund 1.2662 2.89 3.11 3.11 SIL 60s + Sup Cash Fund 1.9861 2.30 2.48 2.69 SIL Cash Plus 1.9861 2.30 2.48 2.69 OneAnswer KiwiSaver-Cash Fund 1.2279 2.70 2.90 2.75 Staples Rodway KiwiSaver Conservative -2.96 3.03 2.91 TOWER KiwiSaver Preservation 2550.15026 3.49 3.20 3.37 Westpac KiwiSaver-Cash Fund 1.2354 2.92 2.83 3.02 New Zealand Insurance Fund Cash Non-PIE Fidelity Life Cash Portfolio 3.1017 1.91 1.78 -New Zealand Insurance Fund Equity Region Asia Pacific Asteron Superplan 2000 Far East Fund 1.0743 7.34 -2.39 6.32 Asteron Superplan Far East Fund 1.5738 6.57 -3.12 3.91 SIL 60s + Sup Pacific Basin Share 1.7506 6.88 2.31 7.31 SIL P/R Pacific Basin Fund 1.7506 6.88 2.31 7.31 New Zealand Insurance Fund Equity Region Australasia Aon KiwiSaver Milford 2.1148 23.35 16.59 -Asteron Superplan 2000 Trans Tasman 2.8151 25.69 13.66 13.09 Fund Asteron Superplan Trans Tasman Fund 3.599 24.78 12.90 12.35 Grosvenor KiwiSaver Socially Responsible 1.2038 13.31 6.10 -Grosvenor KiwiSaver Trs-Tasm Sm 1.0674 4.95 0.45 -Coms Shr Mercer Super Trust KiwiSaver Shares -26.22 11.75 12.01 Mercer Super Trust KiwiSaver -29.09 15.90 14.08 TransTasman Milford Active Growth KiwiSaver 2.1171 23.68 16.71 15.67 NZ Guardian Trust GIFs - Small Companies 3.9853 23.20 8.21 16.59 OneAnswer KiwiSaver-Australasian Share 1.147 27.13 16.40 13.41 Smartshares Smartkiwi Growth Fund 0.92452 16.83 7.05 8.60 New Zealand Insurance Fund Equity Region Emerging Markets Asteron Superplan 2000 Emerging Mkt Fd 1.3751 1.80 -2.10 8.66 Asteron Superplan Emerging Markets 1.146 0.97 -2.86 7.85 Fund TOWER FreedomPlan-Emerging Markets 2.16655 3.95 -5.61 10.06 TOWER FuturePlan-Emerging Markets 2.16655 3.95 -5.61 10.06 New Zealand Insurance Fund Equity Region Europe Asteron Superplan 2000 European Fund 1.9065 30.01 10.40 8.88 Asteron Superplan European Fund 2.2654 29.15 9.62 8.12 New Zealand Insurance Fund Equity Region North America Asteron Superplan 2000 Nth Amrn Fd 1.8152 26.92 12.39 9.43 Asteron Superplan North American Fund 2.5968 26.06 11.62 8.69 New Zealand Insurance Fund Equity Region Australasia AMP Prem PSS OnePath NZ Shares 1.6047 24.41 15.88 13.35 New Zealand Insurance Fund Equity Region NZ Asteron Rtrmnt Savings Plan NZ Equity 2.6569 25.91 13.50 13.59 Asteron Superplan 2000 NZ Shares Fund 2.2567 25.79 13.71 13.14 Asteron Superplan 2000 NZ Smaller 3.4213 22.07 8.02 17.58 Compns Asteron Superplan NZ Shares Fund 2.0402 24.77 12.88 12.60 Asteron Superplan NZ Smaller Compns Fd 3.0906 21.32 7.30 16.89 SIL 60s + Sup NZ Share Fund 3.6479 26.56 16.30 13.08 New Zealand Insurance Fund Equity Region NZ Non-PIE Fidelity Life NZ Shares Portfolio 4.2736 15.07 5.77 8.63 New Zealand Insurance Fund Equity Region World AMP Prem PSS FD Intl Share Fund 1 Value 0.9128 26.01 6.45 4.22 AMP Prem PSS FD Intl Share Fund 0.9468 21.30 7.18 3.32 3 Growth Asteron Rtrmnt Savings Plan Intl Eqty 2.0481 28.02 9.38 7.68 Asteron Superplan 2000 Aggressive Fund 1.5493 15.04 6.09 7.08 Asteron Superplan 2000 Global Fund 1.6716 26.95 8.99 7.57 Asteron Superplan Aggressive Fund 1.4714 14.30 5.45 6.41 Asteron Superplan Global Fund 1.988 25.79 8.10 6.71

032

WWW.GOODRETURNS.CO.NZ

60.85 4.49 2.32 158.08 3.28 1.24 254.90 3.69 5.18 3.69 28.29 8.76

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

15.92

--

10.30 2.11 1.57 2.65 1.13 18.94 17.55 22.14 199.76

----------

4.08

--

1.20 10.97 3.32 3.32

   

65.00  2.70



17.14 8.96

 

3.65



1.50



1.68  183.64  9.11  15.25  20.22  0.50  2.41



2.04  23.27  1.76 14.21

---

1.53 13.19

---

4.71



1.36 0.57

 

1.75  1.09  3.56  20.34  1.65



5.44



5.23



3.66 0.54 1.48 4.85 17.75

    

Name

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price %

FC KiwiSaver Scheme's Active High 1.0803 26.78 8.71 7.22 Growth FC KiwiSaver Scheme's Global Sustain 1.558 29.19 10.34 10.21 Grosvenor KiwiSaver International Share 1.3051 24.83 7.53 -Mercer Super Trust KiwiSaver Global -24.93 9.86 10.81 NZ Guardian Trust GIFs - Global Equity 1.5121 27.33 9.47 8.57 SIL 60s + Sup International Share Fund 2.2162 25.76 10.25 7.66 SIL International Share 2.2162 25.76 10.25 7.66 OneAnswer KiwiSaver-Intl Share 1.1476 26.43 10.81 8.14 OneAnswer KiwiSaver-Sustainable 1.1921 18.92 6.53 4.86 Growth TOWER FreedomPlan - Int'l Companies 2.27527 20.22 7.13 9.75 TOWER FuturePlan - Intl Companies 2.27527 20.22 7.13 9.75 TOWER KiwiSaver Equity 2989.99435 19.74 8.18 9.57 New Zealand Insurance Fund Equity Region World Non-PIE Fidelity Life Aggressive 2.4999 14.61 1.21 5.42 Fidelity Life International 1.8519 20.50 3.42 4.45 New Zealand Insurance Fund Equity Sector Global - Real Estate Mercer Super Trust KiwiSaver Real Assets -13.65 8.80 10.82 OneAnswer KiwiSaver-Intl Property 0.9546 12.86 10.97 12.73 New Zealand Insurance Fund Equity Sector NZ - Real Estate MFL Property Fund 2.6965 15.60 14.30 13.93 OneAnswer KiwiSaver-Australasian Prpty 1.179 9.93 13.90 11.59 New Zealand Insurance Fund Global Bond AMP Prem PSS Blackrock Global Fixed Int 1.631 2.70 4.70 6.84 AMP Prem PSS PIMCO Global Fixed 1.8522 0.84 6.76 10.36 Interest AMP Prem PSS SSgA Global Fixed 1.6233 3.27 4.86 5.96 Int Index Asteron Rtrmnt Savings Plan Intl Fx Int 2.8171 2.98 4.75 6.53 Asteron Superplan 2000 Global Bond Fund 2.5255 2.46 4.36 6.62 Asteron Superplan Global Bond Fund 2.3888 2.41 4.35 6.60 Mercer Super Trust KiwiSaver Fixed Intr -2.87 4.40 8.59 OneAnswer KiwiSaver-Intl Fxd Int 1.3978 1.88 4.42 5.81 New Zealand Insurance Fund Miscellaneous Fidelity KiwiSaver-Options Kiwi Fund 4.9406 9.64 6.23 8.10 Westpac KiwiSaver-Capital Protect Plan 1 1.5616 23.56 11.31 -Westpac KiwiSaver-Capital Protect Plan 2 1.4018 23.55 11.31 -New Zealand Insurance Fund Miscellaneous Non-PIE Fidelity Life Options Portfolio 3.8662 7.64 4.31 5.59 New Zealand Insurance Fund Mortgages Non-PIE Fidelity Life Mortgage 3.606 3.14 2.74 3.15 New Zealand Insurance Fund Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund 1.0921 18.85 9.23 8.88 AMP PSS DynamicMkts Growth 1.4092 17.96 8.70 7.77 AMP PSS Select Growth 1.3277 18.38 8.86 7.90 Aon KiwiSaver Russell Lifepoints 2045 5.8271 25.03 --Brook Professional KiwiSaver Growth 1.4308 21.90 9.37 8.39 Fund Brook Professional KiwiSaver Growth 1.4308 21.90 9.37 8.39 Fund Fidelity KiwiSaver-Aggressive Kiwi Fund 3.3585 17.49 7.33 8.31 Fisher Funds Growth KiwiSaver Fund 1.4147 22.18 8.81 15.10 Grosvenor KiwiSaver Geared Growth Fund 1.3526 17.61 6.43 -Grosvenor KiwiSaver High Growth Fund 1.0738 17.67 6.51 6.32 Mercer KiwiSaver High Growth -19.96 9.62 10.96 Mercer Super Trust KiwiSaver High -20.13 9.64 10.72 Growth TOWER FreedomPlan - Growth 2.1357 14.46 6.35 8.10 TOWER FuturePlan - Growth 2.1357 14.46 6.35 8.10 TOWER KiwiSaver Growth 1.22953 15.68 9.08 10.04 New Zealand Insurance Fund Multisector - Aggressive Non-PIE AMP PRP Dynamic 1.6301 16.99 7.12 6.27 New Zealand Insurance Fund Multisector - Balanced AMP KiwiSaver LS Balanced Fund 1.25 12.77 7.88 7.96 AMP KiwiSaver LS Moderate Balanced 1.2597 10.78 6.98 7.08 Fund AMP KiwiSaver TOWER Balanced Fund 1.3011 10.36 7.13 8.36 AMP PSS DynamicMkts Balanced 1.4929 11.95 7.30 7.06 AMP PSS Lifesteps Consolidation 1.4498 10.02 6.44 6.32 AMP PSS Lifesteps Progression 1.5071 12.19 7.39 7.13 AMP PSS Select Balanced 1.4443 12.15 7.38 7.10 ANZ KiwiSaver-Balanced 1.3158 14.57 9.81 9.22 Aon KiwiSaver OnePath Balanced 18.1685 14.30 10.16 11.81 Aon KiwiSaver Russell Lifepoints 2025 6.5143 15.87 9.37 11.86 Aon KiwiSaver Russell Lifepoints Bal 6.3636 18.83 10.03 12.42 ASB KiwiSaver Scheme's Balanced 1.2479 14.02 8.44 8.67 Asteron Rtrmnt Savings Plan Mgd Neutral 2.4569 15.65 9.07 8.77 Asteron Super Yield Managed Fund 12.4484 16.70 9.15 8.81 Asteron Superplan 2000 Balanced Fund 1.9637 15.36 8.65 8.04

2.93



5.64 4.01 1.62 5.84 12.13 12.13 22.43

      

1.86



3.16  28.68  34.48  2.06 0.76

 

0.92 4.99

 

430.71  8.49  2.23



2.50  8.20



1.19 0.99 1.47 1.21 2.13

    

67.82 10.37 8.87

----

22.54

--

2.77

--

154.84  3.73  32.54  6.95 -7.32



7.32



17.21  648.71  3.25  75.34  39.20  8.53  7.80  76.35  111.91  105.98



419.78  250.68  16.20  2.91   7.88 3.78  49.21  587.58  13.30  8.43  34.92  375.36  14.31  18.98  8.63 

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % Asteron Superplan Balanced Fund 2.525 14.53 7.78 7.21 62.23   Brook Professional KiwiSaver Balanced Fd 1.3623 15.28 7.03 6.10 2.03  Brook Professional KiwiSaver Balanced Fd 1.3623 15.28 7.03 6.10 2.03 FC KiwiSaver Scheme's Active Balanced 1.2297 14.73 7.68 8.20 26.07  Fidelity KiwiSaver-Balanced Kiwi Fund 6.80952 10.55 6.32 6.78 106.10  Fidelity KiwiSaver-Ethical Kiwi 2.67733 16.62 8.90 8.09 11.19  FirstChoice KiwiSaver Scheme's Balanced 1.2452 14.03 8.43 8.68 25.50  Grosvenor KiwiSaver Balanced Fund 1.2937 8.76 6.01 6.69 108.77  Mercer Super Trust KiwiSaver Moderate -12.20 7.28 9.23 34.49  Milford KiwiSaver Balanced 1.4004 18.00 12.15 -- 26.19  OnePath KiwiSaver-Balanced 1.2579 12.39 8.92 8.52 17.32  OneAnswer KiwiSaver-Balanced 1.3291 14.66 9.87 9.35 243.92  Smartshares Smartkiwi Balanced Fund 1.08818 7.48 5.48 6.61 6.95  TOWER FreedomPlan - Balanced Fund 3.04316 9.63 6.54 7.23 11.21  TOWER FuturePlan - Balanced 3.04316 9.63 6.54 7.23 136.77  TOWER KiwiSaver Balanced 3594.9264 11.05 7.52 8.42 335.15  Westpac KiwiSaver-Balanced Fund 1.2613 12.89 8.77 8.43 522.58  Westpac Retirement Plan - Balanced Port 2.7309 11.55 7.45 7.23 93.95  New Zealand Insurance Fund Multisector - Balanced Non-PIE Fidelity Life Balanced 3.4754 9.68 4.92 6.25 32.06  Fidelity Life Ethical Portfolio 2.4608 14.78 6.53 -- 0.59  New Zealand Insurance Fund Multisector - Conservative AMP KiwiSaver Default Fund 1.3077 6.38 4.88 5.11 1174.52  AMP PSS Select Income 1.5266 -0.21 3.95 5.17 2.67  ANZ KiwiSaver-Conservative 1.3265 6.65 6.45 6.64 299.15  Aon KiwiSaver Russell Lifepoints Cnsrv 7.2923 8.85 7.87 10.41 55.40  ASB KiwiSaver Scheme's Cnsrv (Default) 1.3475 5.81 5.46 6.22 1853.52  Fidelity KiwiSaver-Capital Guarant Kiwi 2.54976 4.54 4.37 4.35 36.92  FirstChoice KiwiSaver Scheme's Conserv 1.3453 5.80 5.44 6.22 84.78  Fisher Funds Conservative KiwiSaver Fund 1.2468 8.26 6.71 -- 208.25  Mercer KiwiSaver Conservative (Default) -7.43 5.90 8.12 739.78  OnePath KiwiSaver-Conservative (Default) 1.3396 6.11 6.48 6.83 701.14  OneAnswer KiwiSaver-Conservative 1.3389 6.76 6.52 6.74 255.58  Smartshares Smartkiwi Conservative Fund 1.29244 7.85 5.40 4.78 3.01  TOWER FuturePlan - Capital Protected 1.14947 1.50 1.85 2.06 33.95  TOWER KiwiSaver Cash Enhanced 1.34657 5.25 5.75 6.12 476.42  (Default) New Zealand Insurance Fund Multisector - Conservative Non-PIE Fidelity Life Conservative 3.7167 5.27 4.30 5.50 36.58 -New Zealand Insurance Fund Multisector - Growth AMP KiwiSaver LS Growth Fund 1.1444 16.44 8.63 8.29 331.72  AMP KiwiSaver OnePath Balanced 1.4081 17.30 10.77 11.05 82.16  Plus Fund AMP KiwiSaver Tyndall Balanced Fund 1.2406 13.06 7.58 8.44 12.40  AMP PSS Lifesteps Growth 1.4229 15.86 8.28 7.42 1.08  ANZ KiwiSaver-Balanced Growth 1.295 18.63 11.33 10.35 471.42  ANZ KiwiSaver-Growth 1.2657 22.64 12.81 11.42 865.58  Aon KiwiSaver Russell Lifepoints 2035 6.1847 20.59 10.41 12.59 7.49  Aon KiwiSaver Russell Lifepoints Growth 6.1388 23.07 11.02 13.03 13.41  Aon KiwiSaver Tyndall Balanced 12.765 13.45 7.91 8.78 3.56  ASB KiwiSaver Scheme's Growth 1.1795 18.76 9.68 9.38 359.40  Asteron Rtrmnt Savings Plan Mgd Growth 2.4029 19.63 9.90 9.35 25.55  Asteron Superplan 2000 Dynamic Fund 1.892 18.74 9.26 8.51 1.99  Asteron Superplan Dynamic Fund 2.175 18.47 8.59 7.86 18.23  FC KiwiSaver Scheme's Active Growth 1.1748 19.87 8.73 8.79 26.32  Fidelity KiwiSaver-Growth Kiwi Fund 6.5926 14.59 6.99 6.91 47.27  FirstChoice KiwiSaver Scheme's Growth 1.1765 18.76 9.67 9.36 21.42   Forsyth Barr KiwiSaver Balanced Port 1.1922 7.73 5.27 5.98 8.60  Forsyth Barr KiwiSaver Growth Portfolio 1.1211 11.33 5.94 6.48 7.58 Grosvenor KiwiSaver Balanced Growth 1.2266 12.55 6.20 -- 42.96  Mercer KiwiSaver Balanced -14.21 7.96 10.00 47.23  Mercer Super Trust KiwiSaver Active Bal -14.27 7.94 9.84 52.56  Mercer Super Trust KiwiSaver Growth -16.54 8.66 10.13 4.90  OnePath KiwiSaver-Balanced Growth 1.2172 16.02 10.18 9.31 20.07  OnePath KiwiSaver-Growth 1.1759 19.73 11.44 10.04 17.94  SIL 60s + Sup Balanced Fund 3.0315 17.02 10.69 9.80 413.98  SIL Balanced Plus 3.0315 17.02 10.69 9.80 76.00  OneAnswer KiwiSaver-Balanced Growth 1.3105 18.74 11.45 10.53 225.35  OneAnswer KiwiSaver-Growth Fund 1.2776 22.77 12.88 11.58 160.78  Staples Rodway KiwiSaver Balanced -16.43 10.88 9.83 16.76  Staples Rodway KiwiSaver Growth -14.13 8.02 9.41 8.92  Westpac KiwiSaver-Growth Fund 1.242 16.47 10.26 9.35 309.99  Westpac Retirement Plan - Dynamic Port 2.9547 15.19 9.22 8.28 97.30  New Zealand Insurance Fund Multisector - Growth Non-PIE Fidelity Life Growth 3.2039 13.80 5.22 6.37 10.46  New Zealand Insurance Fund Multisector - Moderate AMP KiwiSaver LS Conservative Fund 1.3961 5.99 5.56 6.04 160.77  AMP KiwiSaver LS Moderate Fund 1.3122 8.67 6.35 6.42 168.63 

Name

ASSET ADVISER

For more information visit www.morningstar.co.nz

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % AMP PSS DynamicMkts Conservative 1.5312 5.07 4.88 5.25 0.76  AMP PSS Lifesteps Maturity 1.4602 5.16 4.93 5.27 2.82  AMP PSS Lifesteps Stability 1.5006 7.71 5.79 5.84 4.70  AMP PSS Select Conservative 1.521 5.12 4.91 5.32 10.45  ANZ KiwiSaver-Conservative Balanced 1.3271 10.58 8.23 8.02 303.84  Aon KiwiSaver Russell Lifepoints 2015 6.9466 10.59 8.19 10.95 4.34  Aon KiwiSaver Russell Lifepoints Mod 6.9056 13.77 9.00 11.49 9.43  ASB KiwiSaver Scheme's Moderate 1.3061 9.35 6.93 7.64 512.15  Asteron Rtrmnt Savings Plan Mgd Conserv 2.4416 9.32 7.47 7.58 2.07  Asteron Superplan 2000 Conservative Fund 1.9992 8.80 7.05 7.17 2.40  Asteron Superplan Conservative Fund 2.237 8.01 6.17 6.28 5.49  FC KiwiSaver Scheme's Active Cnsrv 1.33 9.03 6.35 7.41 6.88  Fidelity KiwiSaver-Conservative Kiwi Fd 6.86587 6.13 5.93 6.21 44.84  FirstChoice KiwiSaver Scheme's 1.2957 9.34 6.92 7.61 20.09  Moderate Grosvenor KiwiSaver Conservative Fund 1.3306 3.71 5.67 6.47 37.18  Mercer Super Trust KiwiSaver Conserv -7.79 5.56 7.78 2.37  OnePath KiwiSaver-Conservative 1.3024 9.13 7.73 7.70 6.27  Balanced OneAnswer KiwiSaver-Conservative Bal 1.3395 10.64 8.30 8.17 85.37  TOWER KiwiSaver Conservative 1.3918 6.20 6.16 7.50 76.16  Westpac KiwiSaver-Conservative Fund 1.31 6.10 6.39 6.57 1120.03  New Zealand Insurance Fund NZ Bonds AMP Prem PSS OnePath NZ Fixed Interest 1.5617 -1.93 5.15 5.83 2.21  Asteron Rtrmnt Savings Plan NZ Fixed Int 2.6964 1.14 6.14 6.72 1.28   Asteron Superplan 2000 NZ Bond Fund 2.3354 0.68 5.68 5.96 1.57  Asteron Superplan NZ Bond Fund 2.9819 0.68 5.73 5.99 6.66  SIL 60s + Sup NZ Fixed Interest 2.4502 -2.10 4.72 5.06 164.02  OneAnswer KiwiSaver-NZ Fixed Interest 1.3652 -1.61 5.19 5.51 5.63  SIL NZ Fixed Interest 2.4502 -2.10 4.72 5.06 6.88  Westpac Retirement Plan - Accum Port 2.9463 0.70 2.66 3.40 20.76  New Zealand Insurance Fund NZ Bonds Non-PIE Fidelity Life NZ Fixed Interest 3.5211 1.59 3.51 3.97 0.55  New Zealand Insurance Fund Unlisted and Direct Property - NZ Asteron Rtrmnt Savings Plan NZ Property 3.3151 ---- 0.89 -Asteron Superplan 2000 Property Fund 1.788 4.28 11.11 13.14 1.14 -Asteron Superplan Property Fund 1.5762 3.67 10.09 12.01 1.73 -TOWER FreedomPlan - Property Fund 3.8192 13.53 6.25 5.47 0.97 -TOWER FuturePlan - Property 3.8192 13.53 6.25 5.47 7.78 -New Zealand Insurance Fund Unlisted and Direct Property - NZ Non-PIE Fidelity Life Property Portfolio 3.944 11.11 9.54 6.73 0.71 -New Zealand OE Cash AMP Capital Cash Advantage Fund 1.29192 3.41 3.54 3.65 244.85 -AMP Capital NZ Cash Fund 1.59561 3.21 3.38 3.69 3385.54 -AMP Prem PUT OnePath NZ Cash 1.2646 2.76 2.92 3.10 4.59 -AMP PUT Select Cash 1.2199 2.53 2.66 2.75 3.91 -ASB Cash Fund -3.15 3.21 3.35 493.60 -Public Trust Cash Management Fund 1.2156 2.07 2.20 2.55 23.94 -TOWER Cash Fund 1.1869 2.44 2.50 2.77 16.88 -Westpac Cash Plus Trust 1.2328 3.04 3.12 3.24 56.94 -New Zealand OE Cash Non-PIE AMP UT NZ Cash 1.7186 1.79 1.81 2.36 1.98 -New Zealand OE Equity Region Asia Pacific Non-PIE AMP UT Asian Shares 1.507 14.51 1.05 8.25 1.43  New Zealand OE Equity Region Australasia AMP Capital Equity Opportunity 1.54532 17.90 13.93 13.62 27.10  Brook Alpha Fund 3.4733 30.39 9.06 10.52 16.81  Brook Tasman Fund 1.2039 32.67 13.81 13.92 7.47  Devon Alpha Fund 1.3061 27.07 11.15 -- 50.71  Devon Trans-Tasman Fund 2.8136 25.19 10.85 12.19 73.30  Harbour Australasian Equity 1.447 32.40 14.90 -- 53.06  Milford Active Growth 2.1132 23.40 16.64 15.63 657.93  Milford Trans-Tasman 1.6535 26.32 17.41 17.76 196.83  Mint Australia NZ Active Equity 1.577 33.22 18.07 16.42 24.07  OneAnswer SAC Equity Selection 1.6457 23.16 15.11 12.28 15.09  Blueprint Australasian Shares 1.184 22.76 10.13 -- 18.37  Pie Australasian Growth Fund 3.2011 32.19 29.94 39.83 50.83  Tyndall Aggressive Australasian Equity 1.2366 23.24 10.02 12.89 1.44  Tyndall Small Companies Fund 1.4056 23.58 8.70 -- 0.64  New Zealand OE Equity Region Australia AMP Capital Cash Advantage Fund 1.29519 3.41 3.54 3.65 243.22 -AMP Capital NZ Cash Fund 1.59939 3.21 3.38 3.69 3478.36 -AMP Prem PUT OnePath NZ Cash 1.2669 2.76 2.92 3.10 4.55 -AMP PUT Select Cash 1.2219 2.53 2.66 2.75 3.93 -ASB Cash Fund -3.15 3.21 3.35 479.10 -Public Trust Cash Management Fund 1.2173 2.07 2.20 2.55 23.45 -TOWER Cash Fund 1.1889 2.44 2.50 2.77 16.65 -Westpac Cash Plus Trust 1.2357 3.04 3.12 3.24 51.79 -Name

Latest 1 Yr Transaction Return Exit Price % New Zealand OE Equity Region Australia Non-PIE AMP UT Australian Shares 2.2197 11.57 New Zealand OE Equity Region NZ AMP Capital NZ Shares Fund 1.93767 19.61 AMP Capital Strategic NZ Shares Fund 1.72791 17.95 Brook Premium Share 1.3675 29.72 Fisher Funds NZ Growth Fund 4.9605 26.15 Fisher Funds Premium New Zealand Fund 1.1585 25.55 OneAnswer SAC NZ Share 2.8225 26.68 TOWER Trans Tasman Equity Trust 3.2888 16.51 Tyndall Core NZ Equity Fund 1.2498 26.75 New Zealand OE Equity Region NZ Non-PIE AMP UT NZ Shares 2.2965 15.79 New Zealand OE Equity Region World AMP Capital Core Global Shares Fund 0.92028 27.69 AMP Capital Core Hedged Global 1.01197 32.95 Shares Fd AMP Capital Emerging Markets Share 0.85384 10.12 AMP Capital Global Shares Fund 1.85504 28.68 AMP Capital Resp Invest Leaders Gl Sh 1.15315 27.37 AMP Prem PUT FD Intl Share Fund 1 Value 0.9547 26.18 AMP Prem PUT FD Intl Share Fund 0.977 21.29 3 Growth AMP Prem PUT SSgA Global Shares Index 1.2216 25.20 AMP Prem PUT SSgA Global Shares 1.5739 31.12 IndexHdg ASB EasyFund World Shares Fund 1.0555 24.41 Brook Walter Scott Global Share Fd 1.2432 20.01 Elevation Capital Value Fund 1.3382 24.41 Fisher Funds International Growth Fund 1.3352 23.49 Fisher Funds Premium International Fund 1.3647 23.31 OneAnswer SAC International Share 1.3217 29.14 TOWER Global Fund 3.8704 22.50 New Zealand OE Equity Sector Global - Real Estate AMP Capital Global Propty Securities Fd 1.10835 17.86 ASB EasyFund Global Property Fund 0.9134 10.35 New Zealand OE Equity Sector NZ - Real Estate AMP Capital Listed Property Secs Fd 1.75893 7.27 ASB NZ Property Trust 1.0663 1.71 Mint Australia NZ Real Estate Investment 1.2103 7.39 OneAnswer SAC Property Securities 2.0813 9.62 New Zealand OE Global Bond AMP Capital Hdgd Gbl Fixed Intrst Fund 1.93999 3.15 AMP Prem PUT Blackrock Global Fixed Int 1.5218 2.51 AMP Prem PUT PIMCO Global Fixed 1.8593 1.27 Interest AMP Prem PUT SSgA Global Fixed 1.508 3.23 Int Index ASB EasyFund World Fixed Interest Trust 1.0072 0.82 TOWER BondPlus Fund 1.7694 1.34 New Zealand OE Miscellaneous Fisher Funds Property and Infrastructure 1.434 17.60 Pathfinder Commodity Plus Fund 0.954 -3.83 Tyndall Income Fund 1.1621 4.90 New Zealand OE Mortgages Westpac Home Loan Trust 1 2.29 Westpac Mortgage Investment Fund 1 2.37 New Zealand OE Mortgages Non-PIE AMP PMF - Mortgage Investment 151.8589 0.50 New Zealand OE Multisector - Aggressive AMP Capital Growth Fund 1.94278 17.66 AMP PUT DynamicMkts Growth 1.4361 17.97 AMP PUT Select Growth 1.2728 18.15 Public Trust Growth Priority Fund 1.5532 18.25 New Zealand OE Multisector - Aggressive Non-PIE AMP UT Dynamic 1.721 17.98 New Zealand OE Multisector - Balanced AMP Capital Balanced Fund 2.02609 12.79 AMP PUT DynamicMkts Balanced 1.4787 11.93 AMP PUT Select Balanced 1.3938 11.96 ANZ Invmt Fds Balanced 1.2997 14.38 ASB EasyFund Balanced 1.1711 13.41 Milford Balanced 1.3962 17.45 Public Trust Balanced Fund 1.7287 11.24 Public Trust Balanced Growth Fund 1.5038 13.93 Public Trust Moderate Growth Fund 1.5013 11.74 Name

3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 3.97 10.18 1.81 14.43 12.55 -19.99 20.13 16.38 12.28 14.01

12.32 11.17 -14.37 14.71 13.54 12.45 --

11.38 9.97 8.15

--

471.13  404.32  3.09 -116.23  40.92  33.92  40.43  8.72  2.63



6.43 352.05



14.90 15.51 625.90  1.73 11.34 10.51 6.15

5.58 11.58 10.19 4.01

96.30  168.08  27.54  2.25 

7.00

3.16

1.80



8.34

5.00

2.92



14.41 11.57 4.54  9.75 7.60 6.57 3.44 3.65 13.00 8.01

7.85 --10.45 10.78 10.16 9.10

141.52  44.80  11.13  17.19  29.66  45.17  77.59 --

13.45 16.46 152.27  8.55 8.76 59.36  13.47 -- 19.69   5.84 -4.45 2.50 12.14 10.35 28.26  13.65 11.65 75.37  4.47 4.48

8.16 169.95  6.71 1.45 

6.86 10.39 2.90  4.85

5.94

3.93

3.54 6.79

-- 20.17  9.61 154.89 



8.16 -- 28.53 -1.38 -- 42.86 6.57 7.84 4.15

----

2.32 2.39

2.56 125.50 2.61 196.06

---

-0.84 -0.42 4.62

--

9.15 8.68 8.76 9.66

8.36 5.26  7.85 3.27  7.78 12.23  9.23 8.14 

8.44

7.73

9.06 

8.06 7.20 7.27 9.50 7.79 12.02 7.63 8.11 7.38

7.76 6.93 7.01 -7.97 -8.08 8.07 7.65

45.64 3.84 31.04 40.30 74.76 59.98 4.24 9.56 5.49

        

Latest 1 Yr 3 Yr Transaction Return Return Exit Price % Westpac Active Balanced Trust 1.6208 13.12 8.20 New Zealand OE Multisector - Balanced Non-PIE AMP UT Balanced 1.8668 11.75 6.96 AMP UT Balanced - Other 1.6174 11.71 6.93 New Zealand OE Multisector - Conservative AMP PUT Select Income 1.4238 -0.28 3.92 ANZ Invmt Fds Conservative 1.217 6.51 6.22 ASB EasyFund Defensive 1.2919 5.19 4.81 Public Trust Defensive Fund 1.489 4.64 5.13 New Zealand OE Multisector - Growth ANZ Invmt Fds Balanced Growth 1.3492 18.58 11.16 ANZ Invmt Fds Growth 1.3802 22.42 12.43 ASB EasyFund Growth 1.0952 18.07 8.97 Diversified Wealth Management Balanced 1.1336 5.36 0.58 OneAnswer SAC Balanced 2.1642 17.10 10.88 Public Trust Capital Growth Fund 1.7706 15.93 8.98 TOWER Multi Sector Fund 2.4331 10.67 7.71 Westpac Active Growth Trust 1.518 16.53 9.61 New Zealand OE Multisector - Growth Non-PIE AMP PMF - Active Growth 1.8692 10.64 4.71 AMP UT Legg Mason Balanced 1.39 13.69 5.44 New Zealand OE Multisector - Moderate AMP Capital Conservative Fund NZ 1.99379 5.48 5.44 AMP PUT DynamicMkts Conservative 1.4907 4.91 4.79 AMP PUT Select Conservative 1.4993 5.10 4.86 ANZ Invmt Fds Conservative Balanced 1.2599 10.16 7.86 ASB EasyFund Conservative 1.2499 6.67 5.45 ASB EasyFund Moderate 1.2316 8.77 6.31 Brook Income 1.0696 10.41 -Milford Income 1.2631 14.86 13.45 Public Trust Conservative Fund 1.4992 9.03 6.64 Westpac Active Conservative Trust 1.5259 5.57 5.41 New Zealand OE Multisector - Moderate Non-PIE AMP PMF - Balanced 2.1883 7.31 4.15 AMP UT Conservative 1.8543 4.79 4.51 New Zealand OE NZ Bonds AMP Capital NZ Fixed Interest Fund 1.52645 -0.55 5.43 AMP Capital NZ Short Duration 1.19756 3.39 4.26 AMP Prem PUT OnePath NZ Fixed Interest 1.4606 -2.04 5.04 Harbour NZ Corporate Bond 1.027 3.28 5.34 OneAnswer SAC NZ Fixed Interest 1.3756 -2.15 4.62 Public Trust NZ Bond Fund 1.6115 -1.55 4.60 Tyndall Corporate Bond Fund 1.0931 3.44 6.46 New Zealand OE NZ Bonds Non-PIE AMP UT NZ Fixed Interest 1.7012 -0.77 3.44 New Zealand OE Unlisted and Direct Property - NZ AMP Capital NZ Property Fund 1.62936 10.97 6.06 New Zealand OE Unlisted and Direct Property - NZ Non-PIE AMP UT NZ Property 1.3578 9.98 5.41 Name

5 Yr Size Morningstar Rating Return $M Overall 7.59 99.84  6.86 14.96  6.89 0.87  5.08 4.10  -- 25.39  5.60 114.42  5.80 8.82  --8.61 5.64 9.77 8.89 8.64 8.52

60.42 16.72 19.59 20.99 35.45 3.93 11.36 44.67

       

6.06 17.61 9.68 1.73 5.88 5.17 5.27 -6.18 6.97 --6.91 5.46

 

14.20   1.54 14.35  37.80  282.43  112.54  5.13 -548.56  10.42  85.70 

5.35 35.45  4.98 0.90  7.05 4.50 5.72 -4.96 6.15 --

1560.76  154.64  2.30  110.86  7.05  2.48  123.23 

4.25

0.69 

--

236.21

--

-5.49 2.11

--

Returns are calculated to 31/11/13 Returns are calculated before tax and after fees, except for the non-PIE categories, which are after tax and after fees. For more information about this table and the methodology behind the data, contact helpdesk.nz@ morningstar.com or go to www.morningstar.co.nz © 2012 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 not personalised and has been prepared by Morningstar Research Limited (a subsidiary 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 Investment Statement before making any decision to invest. Neither Morningstar 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.

033

ASSET ADVISER

{ DATA } NZ SUPER FUND PERFORMANCE DATA As at the end of October 2013, the New Zealand Superannuation Fund was worth $24.79 billion. It is weighted to growth assets so can experience large short-term movements.

Month To

Return*

Risk Free Rate of Return**

Excess Return Over Risk Free rate

Size of Fund***

August 2013

-0.18%

0.20%

-0.38%

$23.35

September 2013

2.10%

0.18%

1.92%

$23.93

October 2013

3.65%

0.21%

3.44%

$24.79

Last 12 months

28.13%

2.38%

25.75%

$24.79

Since inception (30 September 2003) on an annualised basis

9.44%

4.85%

4.59%

$24.79

PERFORMANCE SINCE INCEPTION The Guardians have added $7.8 billion to the fund since its inception when compared to the NZ 90-day Treasury Bill rate. The gap between the brown and green lines shows the difference between the active investment strategies that have been used and a passive reference portfolio benchmark. Its largest holdings in New Zealand are in Z Energy and Fletcher Building, and in Apple and Zurich Airport internationally.

ASSET CLASS EXPOSURES AT AT OCTOBER 31 Global equities

62%

South America

2%

Fixed income

10%

Africa

1%

Property

6%

Middle East

0%

Timber

6%

Investments by economic exposure

Infrastructure

4%

North America

45%

NZ equities

5%

Europe

25%

Other private markets

3%

New Zealand

13%

Private equity

2%

Australia

3%

Rural land

1%

Japan

6%

Investments by value

034

WWW.GOODRETURNS.CO.NZ

Asia

6%

North America

36%

South America

1%

Europe

28%

Africa

1%

New Zealand

18%

Middle East

0%

Australia

5%

Japan

5%

Asia

5%

6th Annual

KiwiSaver Report Now available

ASSET Magazine's latest KiwiSaver survey is now available. The survey provides you with clear details of all the retail schemes available in New Zealand. It illustrates all the latest trends and this year features new data.

The report includes details on: ➜ Membership trends and growth ➜ Funds under management ➜ Member balances ➜ Fee analysis ➜ Transfers and withdrawals ➜ Contribution rates ➜ And More

To get your copy of the KiwiSaver report call 0800-345675 or go to goodreturns.co.nz/kiwisaver report