ASSET 133 - 2014

ISSUE 133

WHATYOU NEEDAND WHERE TOFINDIT

Value of class advice

KiwiSaver misconceptions tackled

Managing your business reputation

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WHATYOU NEEDAND WHERE TOFINDIT

10 REGULARS

Authorised financial advisers have to do it – and professional associations say every other adviser should, too. We talked to industry experts about the recent changes to CPD requirements and how advisers should use them to their advantage.

04 EDITORIAL CPD – are you getting a fair deal?

07 PEOPLE New appointments

10 NEWS FROM NEW ZEALAND 11 NEWS FROM AUSTRALIA

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{ASTERON BOSS: “I LOVE MY JOB.”}

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{OPEN TO QUESTION} { INVESTMENT } { INSURANCE }

{ ASSET ADVISER }

06 How onerous is the new Information Return?

22 Preserving an industry reputation 24 Does the industry know what it knows?

28 The influence of interest rate cycles on New Zealand stocks 30 Simplifying KiwiSaver for Kiwis

18 The rise of the big C 20 People like you tend to buy this

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UP FRONT

{ FROM THE EDITOR }

DO YOUR HOMEWORK ON CPD

HOW GOOD ARE YOU AT IDENTIFYING your own strengths and weaknesses?

Working out where the gaps in your business systems are? Determining what study you need to complete over the coming year to handle your business administration more effectively, or provide improved service to your clients?

This might sound like the sort of homework you could get from a bossy business coach. But it’s the kind of analysis all authorised financial advisers will now have to do each year to keep on top of their continuing professional development (CPD) requirements, when they write their annual professional development plans.

The plans take on extra significance under the new CPD requirements.

The new version of the Code of Professional Conduct for AFAs does away with any requirement for unstructured CPD. Instead, advisers must complete 30 hours of structured CPD over a two-year period.

To count as structured, advisers need to be able to show how the training or study relates to their professional development plan.

If you attend a seminar on estate planning, for example, it will only count as structured if that’s an area you’ve identified as one you want to work on. You could find that the training is structured for you, but not for the person next to you because of the aims identified in each of your plans.

That means it’s vital to take the time each year to identify what you might need and where you will get it.

You might think this is just another level

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Thirty hours over two years doesn’t seem too bad a proposition when it’s compared to chartered accountants’ 120 hours over three years, or chartered engineers’ 50 hours a year. of regulatory homework sent to test advisers. But when it comes to CPD, advisers have a relatively easy time compared to some other industries.

Thirty hours over two years doesn’t seem too bad a proposition when it’s compared to chartered accountants’ 120 hours over three years, or chartered engineers’ 50 hours a year.

It’s more than lawyers’ 10 CPD hours a year, or the plumbers, gasfitters and drainlayers’ requirement of 12 a year.

The key to making it useful rather than just another regulatory obligation will be to identify training that will really give you and your business a step up.

All of the professional associations offer CPD options, and there are many other providers, such as Strategi and the Professional IQ College, who have their own courses available. We’ve included some of them in this issue.

If it is approached as an opportunity to improve a business system, hone a skill or catch up on regulatory change that you haven’t had a chance to read through, rather than a box ticking exercise, CPD will be a lot more rewarding.

But that’s easy for me to say – journalists don’t have to do any.

Susan Edmuns 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 PAA, Russell Hutchinson, Ed Richards, Clayton Coplestone, Trevor Slater 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

OPINION

{ DISPUTES RESOLUTION }

Your Internal Complaints Process is a Business Tool consumers

I

N MARCH THE FMA PRODUCED a "monitoring report" on Authorised financial advisers (AFAs), and aired some criticisms. In particular, having spoken to 19 AFAs about their internal complaints handling process (ICP), all complied with minimum requirements Yet some advisers had not recorded any instances of client dissatisfaction in the last 12 months.

The FMA concluded: “In future monitoring, where an AFA has no recorded complaints in the last 12 months, we will probe further to make sure the AFA fully understands the definition of a complaint, and question whether the complaints log is a true reflection of the case.”

The FMA was questioning whether AFAs really were 100% complaints-free – possibly because they may be reluctant (or too busy) to record feedback. Perhaps some AFAs would be concerned that complaints would reflect badly on their practice?

Of course the FMA rightly infers that firms must recognise and act on feedback – as many do. Where firms assert that they never get complaints is concerning, for this could mean a failure to acknowledge issues. For professions to be a long term success story, it is vital to know what clients think about the service they receive. Without this knowledge, how can a firm sharpen its offering?

The Australian standard for, Complaints handling in Organisations, reiterates key guidelines including these three: ➤ Customer-focused approach – be open to feedback and show commitment when resolving issues ➤ Accountability – ensure complaints are recorded and available to make improvements ➤ Continual improvement – complaints are deemed to be "free business intelligence" and can supplement other sources of information such as client surveys.

Ample research exists on how complaints can give firms a wake-up call when they are not achieving their core purpose – satisfying client needs. At Financial Services Complaints Limited (FSCL), members or customers asking us to resolve complaints nearly always receive priceless "data", even if feedback is challenging.

Advisers or institutions can and do choose to adjust financial products, client processes and even their market focus.

Feedback can simply alert people to the value of adjusting their personal styles and client communications – and even improve company culture.

A reluctance to acknowledge complaints risks incurring expensive, time-consuming and damaging word-of-mouth "anti-advertising."

{ TREVOR SLATER }

It is vital to know what clients think about the service they receive Platforms In the uncontrolled world of Facebook, Twitter and similar platforms, why put one’s head in the sand and opt not to have an ICP or relegate complaints to a low priority, whether you are an AFA or institution?

Complaints, handled right, are controllable and represent opportunities to improve. In my view, all financial service providers – whether dealing directly with the public or not – would be advised to have an ICP. An ICP is, in fact, a reputation management strategy and consistent with a client-centric culture.

Can a firm afford not to have an ICP today?

Having an ICP is not just sound risk management. It is also a valuable business tool – and it ought to be built into business systems – not a difficult task! That the FMA acknowledges the value of an ICP and insists that AFAs take the process seriously is constructive. So how can one convert negative feedback into a "strategic tool" to help our service ethic and, of course, clients? When one treats complaints positively, five initial benefits are evident: ➊ By allowing the client to be heard, as a first step, they can explain their side of the story – creating valuable rapport at an early stage. ➋ By clearly assessing the client’s complaint, with a few questions, one can accurately understand what has occurred,

and solutions will emerge. ➌ By finding out what the client wants through listening, one demonstrates empathy – which is often sufficient to resolve matters and frequently ensures that complainers remain clients. ➍ By internally resolving the complaint, and telling the client what changes you are considering, one puts into practice the firm’s priority about the value it places on client service. ➎ The mere act of having an ICP and genuinely utilising this process to resolve a complaint through fully investigating the issue, often means one is more than halfway to a successful resolution.

In other words, the best de-escalation strategy is to take the client complaint seriously throughout and openly tell them that you have a process to be followed.

Research in Australia (TMI Group) showed that 88% of customers will repurchase when their complaint is well handled.

Again, there is evidence that they can become more loyal than existing clients.

By making it easy for clients to lodge a complaint – empowering them and giving them confidence – firms can avoid brand damage via negative word-of-mouth feedback. What is certain is that client communication is everything.

Other benefits arising from having ICP as a "best practice" business tool include: ➤ Your firm and team are in a state of readiness if or when a complaint occurs – meaning you have an ICP in place. ➤ Complainers may make very valuable suggestions about your service or people. ➤ Complaints often pose a stern test for your people-handling skills, but less so when there is an internal process in place. ➤ Even if a complaint is not valid, handling it is good practice, regardless of the outcome. ➤ Clients will always be emotional but, in the event of a complaint, an ICP channels frustration into meaningful and recordable data – enabling firms to be receptive to change. ➤ An ICP is cost-effective insurance for managing complaints compared with legal alternatives. ➤ There is a better chance of resolving a complaint with an ICP, backed up by a Disputes Resolution Services; even if one cannot resolve it, valuable lessons will be learned – including improvements to internal processes and one's personal approach. ➤ When a complaint cannot be resolved, there is the added benefit of being a member of a Disputes Resolution Service provider such as FSCL who are experts in conflict resolution.

Why not welcome client complaints when they occur, confident in the knowledge that you have an ICP? Take the positive approach: this is a chance to test systems, services, products and people. If issues are resolved, that’s a good reflection on the firm. If it cannot be resolved internally, changes may be needed through investigating what could be done better next time including a look at your internal processes – also a good result.

A formal ICP is best practice and benefits clients and service providers – and can save expense and time in many cases.

Trevor Slater holds a Masters in Conflict Resolution (La Trobe University) and is general manager of Financial Services Complaints Limited.

OPINION

OPEN TO QUESTION

RICKY BENNETT KEPLER GROUP

AFAs will have to answer 40 questions about their businesses each year in Information Returns submitted to the Financial Markets Authority. The returns are required as part of the new reporting requirements for AFAs. The first return has to be filed by September 30 this year, covering their business activities up until June 30.

ANGUS DALE-JONES NZ ASSET MANAGEMENT, PAA BOARD MEMBER

SIMON HASSAN

HASSAN AND ASSOCIATES

HOW LONG DO YOU EXPECT HOW LONG DO YOU EXPECT HOW LONG DO YOU EXPECT THE INFORMATION RETURN, THE INFORMATION RETURN, THE INFORMATION RETURN, REQUIRED UNDER THE NEW REQUIRED UNDER THE NEW REQUIRED UNDER THE NEW REGULATORY REPORTING REGULATORY REPORTING REGULATORY REPORTING GUIDELINES, TO TAKE GUIDELINES, TO TAKE GUIDELINES, TO TAKE TO FILL OUT? TO FILL OUT? TO FILL OUT? There is a bit of work to do to sort out the questions they’ve asked.. maybe an hour’s work in it for us. There might be more for others.

WHAT DO YOU THINK OF THE QUESTIONS THAT ARE BEING ASKED? It’s the environment we live in and operate in, we just have to get on and deal with it.

At the end of the day, the regulations are there to provide confidence to the people we serve. It’s part of the patch. Some of the questions look to be reasonably detailed. I suppose you could argue are they overstepping the mark of what they should need to know? A lot doesn’t apply to every AFA, and the questions will mean different things to different people.

I imagine they’re trying to see which areas people are fringing into… They might be trying to flesh out where there might be an at-risk practice, and which advice practice is in which space. AFAs can do a lot of stuff, this probably pigeon holes advisers into what they’re actually doing.

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Because there are so many different business models, it’s difficult to say it will take x number of hours. It’s great the FMA is accepting best estimates because that is one area where more realistic timeframes can happen, if you’re not having to do detailed calculations… It still gives them good information but advisers don’t have to do huge spreadsheets of minute data.

WHAT DO YOU THINK OF THE QUESTIONS THAT ARE BEING ASKED? Professional associations have spent hours and hours on behalf of members talking about the practicalities of the FMA obtaining the information. The FMA has been receptive to the practicalities and really made an effort to adjust how they ask for things, to take into account the impact it will have on advisers. They’ve dropped a huge number of questions.

It’s not too difficult now they’ve simplified it down a bit. When the revised set of questions came out, I went through it and tried answering and didn’t find it too difficult at all… it might take less than an hour to do.

WHAT DO YOU THINK OF THE QUESTIONS THAT ARE BEING ASKED? I have no problems with it. They’ve dropped a lot of questions, it’s 40 now from about 70 before. Some of the other questions would have taken you back to your books or through your financial accounts. I don’t have any issues with the questions they’re asking now they have dropped some. The professional bodies did a good job lobbying to get unnecessary questions tossed out. These are all very easy questions to work through.

UP FRONT

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

David’s appointment and the creation of this new role reinforces our continued focus on delivering a superior customer experience at Asteron Life.”

Jeff Page

KEPA LINE-UP REVEALED Former TNP boss Jeff Page is the chief executive at Kepa, which came together through the combining of TNP and Ginger Group. Page will also head the sales and distribution team for the time being.

Nicola Smee from Ginger Group will be head of communications and marketing, Suzanne Baldwin (TNP) will be head of operations and IT, and Dr Dave McMillan(TNP) will be head of training and development.

TNP's Jamie Coltman has decided not to have an executive role, however he is on the board of the new group. Page says Kepa is looking to appoint a chief financial officer in the coming months.

ASTERON COMPLETES EXECUTIVE BENCH Asteron Life has appointed David Drillien to the new role of executive manager of product, underwriting and new business.

Drillien joins Asteron Life from National Australian Bank (NAB) where he headed up the retail insurance product team.

His appointment completes Asteron Life’s executive bench, following Nadine Tereora’s promotion to the role of executive general manager in March.

Tereora says Drillien has extensive experience in general management roles.

“David is a highly focused individual committed to product delivery and leading teams to achieve excellence. He has an unrelenting passion for the customer.

Donnamarie Edwards

NIB APPOINTS HEAD OF DISTRIBUTION nib has appointed Donnamarie Edwards as its head of distribution for its New Zealand operations.

Edwards was previously with AMP Financial Services and has more than 10 years’ senior management experience in finance and insurance. nib’s chief executive, Rob Hennin, said Edwards’ extensive experience and industry knowledge would make her a valuable addition to nib’s senior management team.

“In less than 12 months, we have made significant progress by launching the nib brand in New Zealand, offering customers a direct-to-consumer health insurance product, developing new adviser only products, and our business partnership with Fidelity Life. Critical to this and our ongoing success is having the right people on board, and Donnamarie will play a critical role in the continued growth and success of our business,” he said.

Her previous roles include head of workplace solutions for AMP, director of group business for AIA and national manager for Southern Cross Healthcare.

ACCURO APPOINTS SOUTH ISLAND BDM Accuro has appointed a former adviser to new business development role.

Steve Crawley has been appointed Accuro Health Insurance’s first business development manager based in the South Island.

He is based in North Canterbury and plans to increase Accuro’s exposure and membership throughout the South Island.

“I’ve built up strong relationships with advisers over the years, as a result of consistently delivering the service that I know they need. I’m looking forward to reengaging with them at Accuro,” he says.

From 2003 to 2006, he worked as a life and medical insurance adviser in North Canterbury. He then joined AXA (now AMP) as an account manager before advancing to the role of business development manager.

MORNINGSTAR STAFF MOVEMENTS Chris Douglas, Australasia Co-Head of Fund Research at Morningstar, has been promoted to a new role leading the company’s American regional data team.

He is to relocate to Chicago in September.

Morningstar has appointed Tom Whitelaw as Director of Manager Research Ratings, working alongside Tim Murphy, Director of Manager Research. Both will report to Grant Kennaway, Director of Manager Research, Asia-Pacific.

Whitelaw will be responsible for chairing Morningstar's ratings committee and managing the research team and schedule. Murphy is responsible for leading Morningstar’s manager research services, which include investment committee participation, approved product list management, and analyst access relationships.

Whitelaw has worked in the firm's Australasian manager research team since 2010. He joined Morningstar in 2007, and worked in the UK manager research team for three years. Before that, he worked in fund research roles with Aviva and Pearson Jones.

Morningstar said it was committed to continuing to provide investors and advisers with independent, timely research on New Zealand and Australian funds, and to maintaining and expanding its KiwiSaver coverage. Stuart Auld will continue to service the needs of New Zealand clients from the Auckland office.

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UP FRONT

{ NEWS FROM NEW ZEALAND } RETIREMENT SAVINGS The latest ANZ Retirement Savings Barometer asked young people about their retirement savings: It found:

Rob Everett

Jeff Page

Kepa looks for more groups to catch Kepa, the group formed through a merger of TNP and Ginger, is looking at taking over other groups.

Kepa managing director Jeff Page says the group, which has 710 advisers, is already talking to other groups about joining. While he wouldn't name any, discussions were ongoing, he said.

Chairman David Johnstone, agrees further consolidation is likely within the advice sector, and said Kepa wanted to be a home for independent, non-aligned advisers.

While Kepa is strong in the life insurance space it is light in mortgage broking and wealth management.

Shorter version of return gets green light AFAs will have to answer 40 questions about their businesses each year in Information Returns submitted to the FMA. The returns are required as part of the new reporting requirements for AFAs. The first return has to be filed by September 30 this year, covering their business activities up until June 30.

FMA’s workload increasing The FMA expects to be doing more with less over the next four years, its latest Statement of Intent reveals.

The regulator has outlined its direction for the period between 2014 and 2018. It describes the coming years as a period of transition with a significant growth in the scope and depth of regulation of New Zealand financial markets, particularly due to the introduction of the Financial Markets Conduct Act. Chief executive Rob Everett said: "The increase in the scope of FMA’s regulatory mandate means that more than ever, we need to ensure that we are delivering the best value for money in terms of our regulatory priorities and actions."

New funds management firm Craigs Investment Partners is setting up a standalone fund manager which will be run by two highlyregarded investment managers.

Craigs already has more than $250 million of funds undermanagement in its PIE funds and is looking to grow this business.

The two directors of the new business are Andrew South and James Ring. They are joinedby two analysts Roy Cross and Stefan Stevanovic.

➤ 70% of those surveyed are saving for retirement.

➤ 17% of respondents expected to rely solely on national superannuation

• 29% of women believed they would need more than $500 per week on top of national superannuation when they retired, compared with 34% of men indicating they wanted to earn this much.

• Despite their lower expectations on future income, 31% of women were confident of reaching their retirement savings goals, compared with 51% of men.

• 50% of respondents said they would consider getting professional advice about KiwiSaver and their retirement savings plan.

• 55% of people nominated banks as their first choice for advice on KiwiSaver or retirement savings.

• 33% of people aged 45 to 64 would consider using an investment broker for advice.

Keeping New Zealand financial advisers strong 0800 88 22 88 08

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UP FRONT

{ NEWS FROM AUSTRALIA } affordability and accessibility of financial advice, were sadly forgotten as the reforms fundamentally changed.”

He pointed to a survey of advisers completed by the FSC that revealed advice post-FoFA now costs an additional 33%.

He said experience is also showing a fall in consumer numbers seeking holistic advice.

Advice more expensive

Australia’s Financial Services Council (FSC) says the cost of financial advice has increased and the number of people who seek it has dropped under the country’s Future of Financial Advice reforms.

Andrew Bragg, FSC’s director of policy, said the current form of FoFA has strayed far from the original intentions that sought reform and cultural change in the wake of collapses.

“Each of those three key recommendations were designed to address collapses such as Storm, where it was obvious the law was deficient,” he said. “[But] the announcement of FoFA went well beyond Ripoll. It significantly overreached. And over the next three years, FoFA got bigger, broader and less targeted. The original objectives which were two-fold: to rebuild trust and confidence and to expand the

understand and educate Australians on the option of equity release products," Deloitte Financial Services partner and author of the report, James Hickey, said.

"These are the groups seeking to help their customers aged 65 and over to navigate their retirement with the dual challenges of longevity and income sustainability. Bringing what is often their most substantial asset - their home - into such discussions must be in the best interests of everyone," he said.

Hickey said retirees have just a third of their required savings for retirement, according to the Association of Superannuation Funds of Australia's modelling.

Struggle to find staff

James Hickey

Reverse mortgages may be the answer: Deloitte Australia’s disconnect between retirement savings and untapped home equity is puzzling, Deloitte says.

The accounting firm has produced a Reverse Mortgage report, which said it seemed logical that retirement income conversations focus on the $500 billion held in home equity.

"Banks, insurers and superannuation funds are best placed to better embrace,

Financial planning practices are finding it hard to hire compliance staff with the right industry experience and training, a wealth manager says.

“There’s less tolerance for not doing the job fully… with many lessons to be learned from people who under-resource [in terms of compliance],” says Paul Harding-Davis, chief executive of Premium Wealth Management told Australian media.

He has been trying to hire a compliance manager for some time.

“There are quite a lot of smart, talented people who have come out of university into compliance and worked their way through, but not as many have been planners before they chose the compliance route.

We prefer someone who has at least been a paraplanner [before moving into compliance],” he said.

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WHATYOU NEEDAND WHERE TOFINDIT

LEAD STORY

{ PROFESSIONAL DEVELOPMENT }

I

t might have been a while since you last set foot in a classroom, but if you’re operating as an authorised financial adviser in New Zealand, your learning will never stop.

AFAs are required to keep up a programme of professional development, which could include anything from training in business systems to studying technical aspects of the products they deal in.

The new Code of Conduct has changed the structure of the requirements.

Instead of being required to complete 10 structured and 10 unstructured credits each year, advisers are now tasked with collecting 30 structured credits over a two-year period.

To count as structured, the training has to be delivered by a qualified educator or relevant expert – but no longer necessarily a DAO or professional body – and be relevant to an adviser’s professional development plan.

A member of the Financial Markets Authority’s monitoring team said the new regime was more outcomes-based, more flexible and took an adviser-led approach to learning. He said it left a lot of decisions about what was acceptable as CPD up to the professional judgement of each adviser.

The industry response to the new rules has been positive.

PAA learning and development manager Angi Mann said the new system would benefit the financial adviser sector and help it move towards a more professional approach.

PROFESSION There have long been calls for advisers to be considered as a profession in the same way that lawyers, accountants and doctors are, particularly if they are to move to a fee-for-

{ ANGI MANN }

service model. Chartered accountants must complete 120 hours of CPD every three years, of which 60 must be “verifiable”. Lawyers have to do 10 CPD hours per year.

Institute of Financial Advisers chief executive Fred Dodds said the changes – which he said placed less emphasis on a numerical target and more on “advisercentric” goals of learning – were welcome.

“In fact, the new definition of code structured CPD is almost, word for word, the IFA definition of structured learning.

The challenge remains, however, for all CPD providers, to understand the true learning needs of the sector and respond, a challenge the IFA intends to meet.”

Adviser Murray Weatherston agreed the move was a good one. “[The changes] place the individual AFA at the centre of the decision as to what is and what is not structured CPD.”

STRUCTURED

The way the code is written opens up a lot more venues for advisers. Before, it was restricted to what professional bodies provided..

-Angi Mann-

The key to the new rules is to get each year’s professional development plan right.

This guides the adviser to the type of CPD they need to complete, and is vital if training is to count as “structured”. No matter how relevant a particular course is to an adviser’s business, if it is not in their CPD plan, it will not count.

Weatherston said: “Two AFAs could attend the same session and one might decide it is structured CPD for her and the other might decide it is not.”

Mann said the first step in writing a professional development plan was to look at the advice the adviser gave and whether any structured credits were being offered that related to their particular area of expertise, such as targeted insurance training for risk advisers, or

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LOOKING FOR CPD? A SAMPLE OF SOME OF THE CPD OPTIONS ON OFFER:

IFA

➤ All IFA webinars are $29.

But if the institute hosts and FMA or Code Committee speaker the live webinars are free and free.

IFA 2014 Conference: ➤ July 22 and 23, Auckland.

PAA and IFA members $699 (early bird) late registration $899 Non-members $999 (early bird) late registration $1199

IFA legal webinar: ➤ Financial advisers and avoiding being sued: Jun 17.

IFA legal webinar: ➤ Legal principles underlying health and life insurance: July 15.

ISO webinar: ➤ When clients don’t tell the truth – fraud, mis-statement and false statement in insurance claims: September 30.

ISO webinar: ➤ Dealing with conflict and difficult customers: October 14.

ISO webinar: ➤ Non-disclosure – common mistakes clients make and how you can help them: November 11.

ISO webinar: ➤ Trends in complaints and complaint inquiries to the ISO scheme: December 2.

IFA webinar recording: ➤ Constructing better risk statements of advice.

Meet the Managers (Free) ➤ Week commencing September 15, Auckland, Wellington, Christchurch and Dunedin.

Strategi Institute: ➤ (CPD plus platform and content available for $350 per year for groups with 10-49 advisers; $360 for one to nine, or pick and choose courses from $45 plus GST)

SSD Investment specialist: ➤ August 27-29, Auckland ➤ SSE Business Risk insurance (online, distance or classroom) ➤ SSE insurance specialist (online, distance or classroom) ➤ SSE residential property lending specialist (online, distance, or classroom) ➤ Seven steps to financial profitability (online) ➤ AML/CFT annual refresher (online) ➤ Legislation/regulation update (online) ➤ Lessons from consumer complaints (online) ➤ Lifecycle insurance needs (online) ➤ Maximise your business profitability (online) ➤ Time management for financial advisers (online)

PAA Adviser Toolkit Regional Meetings ➤ August and September 2014 ➤ Practical Compliance - 2014 ➤ Legislative Changes ➤ Save time with an update on what you need to know in one event: ➤ The practical business implications ➤ New legislation and changes to existing legislation that you need to comply with ➤ What you can do specifically to comply ​PAA members are welcome to book online at www.paa.co.nz o ​ r call 09 365 1722.

Professional IQ College online courses ($92 non-members, $75 for PAA/IFA members, $58 IBANZ) ➤ Rural insurance ➤ Business structures and laws affecting business in NZ ➤ Introduction to insurance ➤ The law and insurance ➤ Intermediate project management ➤ Negotiating for results ➤ Understanding financial statements ➤ Material damage insurance ➤ Call centre sales and service ➤ Professional indemnity ➤ Statutory liability ➤ Managing budgets and money ➤ Understanding project money ➤ Business interruption ➤ Directors and officers ➤ HR for the non-HR manager ➤ Surety bonds ➤ Advanced project management

Professional IQ workshop ($240 non-members, $205 PAA/IFA members, $149 IBANZ members) The professional and effective broker: July 29, Auckland.

mortgage training for loan advisers.

Once that specific segment of training was dealt with, she said advisers should expand their focus and look at training that would help them with the business of giving advice.

She said this might be courses that related to running a business – such as dealing with complaints or even human resources issues.

As long as the need for that training was identified in the adviser’s CPD plan, and was delivered in line with the requirements of the code, it would count as structured training. “The way the code is written opens up a lot more venues for advisers. Before, it was restricted to what professional bodies provided.”

Advisers could choose to train in any area that was needed, provided they could demonstrate why they thought the training provider was qualified to deliver the training.

RELEVANT Sometimes that could be as informal as financial advisers who needed to know more about trusts getting an accountant who was a trust expert in to provide advice.

“If you had an accountant come in who is a specialist in trusts, it’s easy to demonstrate why that person is a relevant subject matter expert,” Mann said.

Advisers who had been actively updating their knowledge of the code and working with their professional body were familiar with the changes they needed to make, she said. “They know what they need to do and how to go about it.”

David Greenslade, of training provider Strategi Institute, said professional development plans needed to be personalised. That would mean the adviser was forced to think about what they would do over the next year or two.

“Some people are saying the plan process is quite laborious and has taken time and they’ve really had to think,” Greenslade said.

“But that’s the whole idea. That’s what the code committee wants.”

He said it would be more difficult for some than others to identify gaps in their knowledge or competency. “How do you know what you don’t know? Some advisers need templates and tools to prompt them.”

Once a professional development plan was in place, Greenslade said advisers should not “set and forget” but continue

LEAD STORY

to change and adapt it as they year went on. Sometimes they would need to go back and “backfill” their plans to ensure relevant study they had done would count as structured credits, he said, especially if unexpected changes to the business environment occurred that meant extra training was needed.

“This year if someone is doing DIMS, they now need to go back and update their professional development plan to include understanding and being able to apply for and implement the new licenses around DIMS,” Greenslade said.

With the ever-changing regulatory landscape in which financial advisers are operating, many will need to set aside a lot of CPD time just to keep up with the changing rules.

RULE CHANGES Greenslade said this could be a big part of many advisers’ CPD programmes.

Even reading FMA guidance notes on new rule changes could count as structured CPD, provided the adviser was able to prove they had done it.

The need to verify the training was what prompted some to seek out online offerings that included a test of some kind, he said. “Online, it’s hard to prove interactivity so the simplest way is to offer mulitchoice questions to be marked.”

Strategi offers a legislation/regulation update online course for $55 plus GST.

Dodds agreed there was a need for “reactive” learning as legislative changes came into force.

“This demand is likely to continue for a while longer, with AML and DIMS being evidence of that, Dodds said.

“However, members’ CPD requirements are moving to the next level with many expressing a ‘proactive’ demand for better business processes, knowledge of smarter technology and modern advice processes. The emerging professional need is to provide learning that leads to more transparent advice and client choices, with clearer documentation to a larger cohort of investment-savvy clients.”

COMPETENCY

{ DAVID GREENSLADE } Some advisers need templates and tools to prompt them.

-David Greenslade-

The code requires that advisers maintain their competency at the same level of those entering the industry.

A new level five qualification is due to be signed off by NZQA over the coming months.

Once that has happened, advisers will need to check the criteria for it and make sure that they are confident their competency is at that level – otherwise improving to meet the standard will need to be added as an objective in their CPD plans.

All of the CPD experts spoken to

by ASSET wanted to stress that the 30 hours should not be seen as a target but a minimum.

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LEAD STORY

{ PROFESSIONAL DEVELOPMENT }

The IFA requires that its adviser members should complete an additional 30 unstructured hours, on top of the structured credits they earn under the new code.

Mann said: “Some advisers, particularly new advisers or those wanting to give advice in other areas, may need to complete more than 30 hours every two years in order to develop their competency.

It comes back to the adviser knowing where they need to develop or maintain their competency and knowledge, and putting a plan in place to address that.”

Greenslade agreed. He said advisers should never consider 30 hours a target. “It’s a minimum 30 hours and the code stresses you need to do as many as you have to do to show your competency and skill. If that’s 100 hours, you have to do 100 hours.”

The PAA recommends that advisers stagger their CPD over the period so they do not leave it until the last few months to rack up all the required credits required. Spread out, it is just over one CPD credit per month.

The IFA has an annual conference and holds regular webinars. Dodds said it would offer 12 hours via the conference every year, 10 hours via two professional development days, 30 hours of webinars and six hours of branch meetings.

ACCESSIBLE He said webinars were becoming more sought-after. “This delivery mechanism has been particularly popular for timepoor advisers. It also provides a very

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A CPD plan with ongoing education will help demonstrate skill and that they’re staying up to date. cost-effective delivery of CPD to both metropolitan and rural locations and is particularly suited to cover off technical issues in a short time. To this end the IFA have also established an online webinar library that accessible to everyone.”

Andrew Gunn, IFA’s manager of member learning and development, said the IFA approach to the delivery of CPD had changed a lot over the past five years.

The IFA had recognised it was not a training provider and was making better use of learning partners such as Massey University and the Professional IQ College.

IFA is focusing its CPD resources on being a “learning and professional hub”.

He said the IFA surveyed its advisers, asking what their CPD needs where. The IFA would then find speakers and industry experts for its annual conference, branch CPD events, webinar platform and professional development days in line with the response.

“I’m continually amazed at the number of talented people, both within the IFA

membership and financial services sector, who are willing to provide their time and talent to the profession,” Gunn said.

Greenslade said it was easy for most advisers to access the right sort of CPD. “But it depends whether you want it free or if you’re prepared to pay for it.”

QUALITY He said 800 advisers used Strategi’s resources, which were available for $350 a year and included professional development plans, training courses, articles and webinars. “You can go to a high-quality conference and get CPD there but it tends to be narrowly-focused so you need other CPD.” All of the professional bodies hold a conference each year. SiFA holds two.

Mann agreed it should not be hard for advisers to access CPD. “At the PAA we will be offering 40 structured credits over two years to ensure advisers have access to the credits they need.”

She said they could then look elsewhere for more if they felt the needed other training.

Mann said CPD was important for all advisers, not just AFAs. Registered financial advisers have to demonstrate that they are carrying out their business with diligence, care and skill. “A CPD plan with ongoing education will help demonstrate skill and that they’re staying up to date.”

She said it should be something that advisers wanted to do as a matter of course.

“If we are a professional industry, it’s a good thing for us to do.”

PROFILE

{ PROFILE }

EXECUTIVE ‘PR IN APPOIN By: Susan Edmunds

I

f Nadine Tereora wanted some reassurance that she had support as she took on the role of executive managing director at Asteron Life, she needed to look no further than her email inbox.

It was announced in February that she would take over the job when the incumbent, David Carter, moved to an executive role at Suncorp Bank in Australia, the parent of Asteron Life. Within 24 hours of word of her new job, she had received close to 200 supportive emails from the company’s risk insurance advisers and her colleagues.

“I’m very privileged but excited to take over the position,” she told ASSET magazine over coffee at the foyer café of the Lumley Centre in Auckland, where Asteron has its head offices.

Tereora was promoted internally to the position, from the role of Executive Manager Claims, Underwriting and Product.

Before joining Asteron, she was chief operating officer at AIA and had held senior roles at Sovereign.

Her Asteron position had grown over the two years she had held it, to include a larger portfolio of product and new business. The job’s evolution is something Tereora puts down to Carter expanding the “bench strength” of his senior management team, with an eye on the future.

She said it had been well-known that David Carter had planned to move on and wanted to appoint his successor from within the organisation, someone familiar to advisers and other strategic partners of the business. “It’s an important continuation. He had a strong desire to have a New Zealander succeed him in the role and I’m the first New Zealander to head up the organisation.”

PROFILE

PRIVILEGE’ OINTMENT Nadine Tereora is the first New Zealander to head Asteron Life in this country.

The number of independent advisers is growing; we’ve had exponential growth over the past two years. I want to build on that momentum and partnership.

A number of people from across the group were interested in the position, and Tereora said she had to undergo a rigorous process before finally getting the nod. But coming into the job from within the organisation enabled her to hit the ground running. “It’s been really good, an easy transition because I was part of the leadership team already,” Tereora said. “If I had come in from the outside I would have had to orientate myself with staff but because I’m already a part of it it’s not been a huge transition.”

Top jobs Suncorp has a robust career-planning framework, she says, with a focus on finding people for the top jobs from within wherever possible.

“With recent changes, 50% of the roles that have been filled have been with internal talent, which speaks volumes to the depth of talent in the company. New Zealand has a strong, capable leadership team and my appointment from within is proof of the depth. My background is not as an accountant or an actuary; it’s in the technical areas of life insurance and distribution.”

She has been in the insurance industry her entire career. While at university studying commerce, then marketing and law, she started working for National Insurance, which was part of TOWER. Then an interview with Naomi Ballantyne, now head of Partners Life, convinced her to move to Sovereign, where she spent 12 years, including a stint in Australia, before moving on to AIA and Asteron.

“Insurance definitely wasn’t an industry I expected to be part of but I fell into it by accident while I was at university,” Tereora says.

“The biggest attraction was the fantastic people and the ability to really make a difference to clients’ lives, working in partnership with advisers to do that. It’s a relationship business.”

Novelty While Tereora has carved out a reputation in the industry, there is evidence that a woman in a top job is still seen as a novelty for some. She has had to deal with a number of people asking how she will manage to balance her new role with the care of her young family – something

men in the position probably would not have to contend with.

She says: “People keep making a point about it being a woman in the role and asking how I will juggle my family.

All women know how to make it work.”

So far, it’s only been finishing her degree that she has had to let slip. She’s a few papers away from finishing her legal papers and says it’s on the to-do list, for one day. “I’ll do it when I have time.”

Tereora says a strong focus for Asteron is sustainability. “That’s a challenge the whole industry faces and I don’t think it’s a challenge we should shy away from.”

She said steps already taken towards increased sustainability included changes to adviser remuneration and improving the company’s product offers. “Simplicity is important.

Kiwis still have that ‘she’ll be right’ attitude.”

People needed to understand the benefits of risk insurance, she said.

“New Zealanders are really great at insuring their house, car and contents but I don’t think there’s good understanding of what risk insurance can do – whether that’s loss of income, mortgage repayment or trauma insurance.”

Adviser numbers Asteron Life has experienced strong growth in adviser numbers, which bodes well for the future of the industry as well as the company’s position in it , Tereora said. “The number of independent advisers is growing; we’ve had exponential growth over the past two years. I want to build on that momentum and partnership.”

Tereora admits to a time when she might have considered becoming an adviser herself.

“There was probably a time in my career when I thought being an adviser was an option but I love what I do and this role gives me the opportunity to deal with a number of advisers and help them with their businesses.

On your own, there’s a definite type of workload.

I get the best of all the worlds.”

Asteron has been focusing on increasing its footprint in the market, Tereora says. Part of that has meant increasing its reach to attract more advisers.

She said she had also noticed adviser groups working hard to bring new faces into the industry and spending time developing their risk skills. Tereora says she can understand why advisers are seeking out the support of groups: “With regulation, it’s difficult to set up being an independent adviser; it makes sense to amalgamate where possible.”

Some of the advisers dealing with Asteron are aligned to the company but most are independent.

Tereora says it’s an exciting time to be in the industry. “Being a risk specialist, I’m looking forward to providing simplistic product innovation, and the service proposition evolving.”

The outlook is bright, she says. Asteron is wellpositioned for growth and the opportunities are increasing for advisers and their clients. Tereora says she feels very fortunate to have been chosen to be guiding force driving the company through the next stages of its development. “I love what I do.”

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INSURANCE CASE STUDY

{ DEFINING EVENTS }

The rise and rise of the big

Are some diagnosed cancers really cancers?

Insurers are awaiting definitions with interest.

D

uring our lifetime it is highly likely we will know somebody, whether it is a client, a family member, friend of the family or a work colleague who has been diagnosed with cancer.

The UN agency, the International Agency for Research on Cancer, (IARC), recently released its 2014 World Cancer Report which shows cancer is now the world’s biggest killer – with the number of cases set to explode in the coming years: ➤ As a single entity, cancer is the biggest cause of mortality worldwide – an estimated 8.2 million deaths were from cancer in 2012 rising to 14.6 million in a single year by 2035. ➤ Global cancer incidence over four years increased by 11% to an estimated 14.1 million cases in 2012 rising to 24 million in a single year by 2035. ➤ Cancer cases worldwide are forecast to rise by 75% and reach close to 25 million over the next two decades.

Logically early detection and prevention

must be high on the list for any government developing a strategic plan for cancer control to significantly reduce the global cancer burden. CANGO (Cancer Non-Governmental Organisations), which is an alliance of eight prominent New Zealand cancer charities, recently launched its manifesto document calling on the next New Zealand government to action seven key points in assisting to reduce the global cancer burden. As stated in their document, this year alone over 20,000 New Zealanders will be diagnosed with cancer.

Against this picture of doom and gloom, I recently attended a seminar conducted by Dr. John Commins who is the Chief Medical Officer, Research and Development for Gen Re based in Sydney. The topic was cancer over-diagnosis in the pursuit of longevity.

A thought-provoking seminar attended by a number of insurers to consider the global question of re-defining cancer in the context of research findings and if so does the life

This year alone over 20,000 New Zealanders will be diagnosed with cancer.

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insurance industry need to address this with new definitions? With medical technology advancements, the ability to diagnose early stage health conditions is becoming the norm, but at what cost?

Dr Commins talked about the definition of over diagnosis of cancer which is a diagnosis of a “cancer” that would otherwise not go on to cause symptoms or death. From this definition the conclusion Dr Commins reached is that overly aggressive treatments and unnecessary interventions for over-diagnosed conditions not only burdens the healthcare system (consider the opportunity cost of wasted resources that could be utilised to prevent genuine illness) but may in fact expose patients to harm without any benefits.

Dr Commins is not alone in his thinking, as over diagnosis has become a global concern with the first conference on “preventing over-diagnosis” being held in the United States September, 2013.

A growing list of scientific literature suggests there are many ways over-diagnosis occurs, with medical technology being a key contributor. For example, screening detected diagnosis without symptoms or over-diagnosis resulting from excessively widened disease definitions.

While “cancer” can clearly be life threatening, not all cancers are fatal. Some cancers fail to progress, can regress or grow so slowly that the actual cause of death will not be cancer. The American Cancer Society has recommended changing the name of some conditions so that they are not considered cancer and only using the term cancer for lesions with a reasonable likelihood of lethal progression if left untreated.

For example, it suggested that “ductal carcinoma in situ,” the presence of abnormal cells in the milk duct of the breast, is not invasive and should not be labelled a cancer.

So it could be said that any cancer control policy must consider what prevents or reduces the over-diagnosis of cancer while maintaining and improving those gains by which early detection is a major contributor to the well being of the patient.

Are we seeing a shift from some insurers in how they treat the definition of cancer with the introduction of severity-based trauma so that arguably the cost of the cover and the claim payment meet the need?

Asteron Life / Life insuranCe Company of the year

Thank you for your continued support. Our success is also yours.

Contact us: 0800 808 106 | www.asteronlife.co.nz

INSURANCE

{ INSURANCE }

People like you tend to buy this

It is time we gave more credit to the important role class advice can play in financial services.

C { RUSSELL HUTCHINSON } 020

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lass advice has a bit of a bad name amongst financial advisers.

They tend to associate it with "not quite doing a proper job" and even with online or direct offers which aren’t really providing advice.

I think class advice is a useful feature of our financial services regulation and can enable a lot of effective consumer education – something which has vanished from some heavily regulated markets, and has proven to be a great loss. In the UK, for example,

tough liability for any financial advice has seen a lot of "generic" advice materials disappear. A good example of these are the leaflets you see in banks explaining the different types of home loan, rather than pushing a particular branded product. These leaflets were killed off by tough enforcement of advice laws. Today the British taxpayer now stumps up millions to fund a state agency, the Money Advice Service, to fill the gap. In contrast, New Zealand law and regulation still specifically acknowledges

INSURANCE

class advice and, by implication, the value that it can add for consumers.

Think of class advice as providing information along the lines of “People like you buy…” This sounds to me like the way most people commence full advice consultations.

We discuss the issues.

We may point out some common pitfalls.

At this stage in the discussion we may or may not be saying that these specifically apply to the client sitting across the table from us. Good examples include self-employed people, older people, and then younger couples with young children. Each has a set of needs which they share in common with others. Their specific circumstances will vary, but, we will get to that in the process of giving personalised advice.

This is important because it allows us to set expectations in a positive way, which has often been a failure in the industry.

Take underinsurance research, for example. It is, wearily, misused as a cudgel by some people who want to blame advisers for not making enough sales. But once you get past that sad failing there can be a lot of really good information in it – telling us a great deal about perception problems, the great opportunity in the market, and acting as a challenge.

But underinsurance research should not be used widely with consumers.

This is why: In the UK the health service was upset at how many patients missed booked appointment times with expensive specialists. To try and tackle this they tried to publish "shaming" statistics showing how terrible it was that patients were not showing up for their appointments.

They were astonished to find that the level of no-shows increased. Bemused they turned to behavioural economics for an explanation. What was going on was that sharing a high level of no-shows was setting a consumer expectation.

“Everybody does it” the client thinks, and so they believe it is okay for them to do it.

A British insurance expert Richard Verdin at RGA, a reinsurer, thinks the industry is taking the same dumb approach by talking about underinsurance too much with consumers. He thinks it is the equivalent of telling people they don’t have to phone to cancel an appointment. In effect by saying that everybody is underinsured our clients shrug and believe that must be the right thing to do. Besides, it looks incredibly selfserving: imagine, the car industry coming out and announcing “People need to buy larger cars” or the building industry “People need to buy bigger homes.”

So underinsurance research is great for the industry: That’s insurers, advisers, regulators, and policymakers. Just not consumers. The solution is to talk about the numbers that count. We can turn to arguably the greatest retailing story of all time: Amazon. Amazon fills about a third of

You can add to that some good, positive, statistics from the Financial Services Council.

Last year more than 177,000 term life policies were taken out. the screen with recommendations based on “people like you buy…” This is the right application of class advice.

The other thing about it is that it is also safe for you to put class advice on your websites and in brochures, whereas many bank sites, in contrast, that offer no-advice services will prefer not to do that – because they aren’t registered advisers, or because they don’t want to offer any advice.

That is another powerful differentiator.

You can make up your own ‘classes’ and you do have to be careful that the classes are not too specific – a class of one is

personalised advice, obviously.

You also need to make sure that whoever receives your class advice knows that it is not the real deal of full personalised advice.

Bearing those things in mind it is then time to mine the recommendations you made to your last 100 clients and sort them into groups and identify the features that, as a group, they have in common. Once you have that you will clearly see patterns emerge. You always recommend clearing debt and replacing income for a number of years. Perhaps you always suggest that families have good children’s trauma benefits.

There will be a number of groups.

You can add to that some good, positive, statistics from the Financial Services Council.

Last year more than 177,000 term life policies were taken out. More than 100,000 income protection policies were taken out – a very similar number took out trauma cover.

There were more than 50,000 TPD contracts sold. Sure, maybe there should be more cover, but at least with the new clients we are meeting we can share with them the good decision to buy cover that lots of other prudent people have taken – and ignore the reckless decision, or narrow budgets, that have forced others to ignore the benefits of cover.

On balance, then, class advice could work for you – and it should be filled with good news – the positive choices made by people who recently took your advice.

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PRACTICE MANAGEMENT

{ REPUTATION MANAGEMENT }

N A G N I V R E S E R P N O I T A T U P E R Y R T S INDU ming the There’s no point bla verage. media for negative co

{ ED RICHARDS }

T

he media is a reporter of gloomy news, strongly influencing public thinking on many pressing issues.

An entrepreneur once complained to me that “the media is more interested in heat than light”.

To counter this trait, would media channels be receptive to constructive mateship with financial services and its leaders when issues flare up? Regardless of the answer, it pays to monitor the role of the press.

A hurtful or unfortunate headline or troubling story can easily upset a sector or firm.

But media stories, especially when balanced, can be an agent for change and encourage politicians to act or pass legislation, as was the case with the Financial Advisers Act. Media freedom is a valuable pillar in

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democracies and we must guard the freedom to report the truth.

For businesses today, media management is more complex and risky. Online media is adding to or supplanting print, TV, and radio. We have all heard of a bad news story being leaked and going viral before it could be resolved. Trial by social media is not a winning strategy, yet social media is here to stay.

Some international studies state that negative news outweighs good stories by a ratio of 17:1. It only takes one or two advisers or firms to create a disproportionate wave of ill feeling, potentially eroding the intent of the Financial Advisers Act - “to encourage public confidence in the professionalism and integrity of financial advisers and brokers”.

Media moguls know that upsetting or disappointing stories tap into our innately negative, self-protective, psyche. It is ancient

The media is a complex beast with multi-platform channels reporting news, often simultaneously, on an hourly or daily basis. Journalists only publish what they deem newsworthy.

PRACTICE MANAGEMENT

biology that we worry about bad or sad news. Subscribers have an appetite for this stuff, even though we don’t actually like what we are reading. We buy publications to find out more gossip or to see what and why it happened.

Malcom X memorably observed a long time ago: “The media is the most powerful entity on earth. They have the power to make the innocent guilty and to make the guilty innocent, and that's power. Because they control the minds of the masses.”

Britain’s celebrity chef Nigella Lawson would surely agree with this.

Unflattering aspects of her private life were published in the British media before Christmas. The original point of her trial – whether her personal assistants acted illegally – was almost forgotten.

Despite this, the Guardian newspaper reported that “she won the public heart”.

Isn’t this precisely what the financial sector has been doing in recent years, winning back the public heart through great service?

This is a never-ending process with little margin for error along the way. Media publications like to talk to the public about trust. The NZ Reader’s Digest produced its annual list of 50 “professions that have earned our trust” and are “regarded as dependable, honest and reliable”. Insurance salespeople came 45th, just behind real estate (44th), lawyers (37th), and accountants (28th).

This article deserved a strong response from industry leaders, but it was published unchallenged.

If negative stories are the norm, sometimes with a major impact on individual or business reputations, what can be done about it?

Is it possible to work with the media, to enlist their support, and get better or fairer

stories published, ensuring that balanced accounts are presented? Yes, there is scope to tell media representatives your side of the story. And people do. But why does this not happen more?

The media is a complex beast with multi-platform channels reporting news, often simultaneously, on an hourly or daily basis. Journalists only publish what they deem newsworthy – which is why no news is often good news. Industry associations tend to pay lip service to media planning because they may not have time, the skill sets or connections to do it.

Financial services, be it banking, investment or insurance are perfect examples of sectors rebuilding or maintaining reputations on an ongoing basis.

Warren Buffet famously remarked: “It takes 20 years to build a reputation and five minutes to ruin it.”

While the Financial Advisers Act, the Code of Professional Conduct for AFAs and anti-money laundering regulations have helped to professionalise the advisory sector, and theoretically appease the public, laws cannot and should not protect reputations.

Consumer protection laws aim to protect the public from inappropriate or wrongful behaviour. Industry participants are well placed to promote confidence through client-focused service and best practice.

This is how to build reputational excellence every time one acts.

Insurance firms and advisers remain vulnerable to unwanted media stories. It is a long-standing complaint that there are rarely positive real life stories publicising successful insurance claims – something the Readers Digest could write about.

Equally when claims or issues, rightly or wrongly, are not resolved to the client’s satisfaction, the last thing one wants is for them to complain to the media.

Disputes Resolution Services such as FSCL and the Insurance and Savings Ombudsman are doing an excellent job resolving complaints. Yet there remains the risk of a Fair Go scenario – and significant reputational damage to a firm or individual.

The Campbell Live shows on Christchurch residents with unresolved complaints in 2013 did not paint the general insurance sector in a positive light. Insurers were confronted with the trenchant criticism that they over-promised and under-delivered in many cases. Let’s face it, all professionals are faced with meeting that challenge every day. Get it wrong, and the media may smell a story. Get it right and journalists may not publish anything. LV Martin, the Wellington appliance retailer, had a pragmatic phrase (still in use today) that could have come out of a public relations manual: “It’s the putting right that counts.” The media might love you for it. The public certainly will.

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{ RELATIONSHIP MANAGEMENT }

Are you providing value for your clients?

Financial services businesses will become a lot more valuable when they have a clearly defined proposition for clients. By: Clayton Coplestone

A

S A FREQUENT TRAVELLER comparing and contrasting the evolution of both the Australian and New Zealand financial services industries. On a recent trip to Sydney I was fortunate to attend a conference comprising the leading minds in Australia’s financial services industry.

Like many of the delegates I was in awe of those funds managers who shared their insights into the direction of the world’s financial markets, and how they intended to capitalise on the various fluctuations ahead.

During the less formal conference moments, I learnt more about the capabilities of these funds managers, their measures of success,

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and some of their product innovations on the near horizon.

I also heard a number of high-profile Australian financial advisers who had embraced the Gerber Principle of “working on their business rather than working in their business”, with delegates learning about the necessary steps in transitioning their financial planning proprietorships into financial planning businesses. All of the advisory speakers agreed that delegates must convert their businesses, keeping in mind the ultimate purchaser when it comes time to sell.

The content of the conference is a lifesaver for the New Zealand industry which is arguably a decade behind the evolution of

Australia’s financial planning industry.

Firstly – none of the presenters (whether funds managers or advisers) had made any reference to the expectations of the investor…. you know: The client. One financial adviser came perilously close to discussing their clients when noting that their financial planning business was coming up to their annual culling of non-suitable clients (i.e.: those who are unable or unwilling to pay appropriately for their services). Aside from that moment, all of the presenters talked about the business of providing intermediation and how they maximised their profits from these activities. I couldn’t help wondering how a client would feel upon being advised that they were no longer suitable for their “trusted adviser”, and learning that their relationship had been sold to another financial advisory entity. I likened this experience to learning that your doctor no longer saw relevance with your relationship, and had sold your files to another more compatible medical professional. This would likely be a catalyst for investigating alternative solutions. I was curious about the constant references throughout the conference as to how platforms made the role of the industry more efficient and profitable, and wondered what additional benefits the client was really receiving from this. Whilst the concept of consolidated reporting is no doubt appealing, I wondered how often the client would use this service, and whether they really had an appreciation for the cost savings that it delivered to the industry.

The final element that I pondered on was in relation to the products that the financial services community continues to roll out for the clients. Over the years I’ve attend many industry events that recognise the achievements of the product manufacturers – primarily for their investment performance and the assets that they have managed to gather. I likened the experience of investing into industry products, to the purchasing of a new car. For those who have recently purchased a car, I wondered how many took any real interest in how the engine worked (aside from us blokes who have a brief testosterone moment), and ultimately brought that car because of the enhanced utility that the colour, style, seats etc was going to deliver.

If we apply this analogy to the development of financial services products, I wonder whether the client really cares about how the product

PRACTICE MANAGEMENT

works compared to being mostly interested in what the product will do for them. I’m always fascinated by where the inspiration comes from for product developers, and how much effort is put into understanding the expectations of the client.

So what does all this mean? In recent years, the Australian financial services industry has reached a unique impasse where many industry participants are rightly concerned about their future asset-gathering strategies. Many are looking at the explosive growth of the self-managed superfund community, and attempting to communicate using outdated intermediation philosophies and products. The SMSF statistics and surveys that signal the growth of this market, reflects a conscious vote against the financial services industry, with the majority of investments being self-managed or direct. Whilst some financial advisers are enjoying marginal success, no one has captured significant SMSF market share, with the industry competing against resentment, ageing demographics, and the resulting risk aversion of investors. In other words – the SMSF horse has well and truly bolted.

On its current course, I suspect that the Australian financial services manufacturers will continue to consolidate, with the larger institutional investors offering a high beta, commoditised solution that is only differentiated by brand and price. Any unique talents or capabilities within the industry will continue to expand the growth of boutique managers – albeit that many of them will face asset gathering challenges despite their real or past performance.

In this lower return environment,

Australian financial services industry has reached a unique impasse where many industry participants are rightly concerned about their future asset gathering strategies consumers will increasingly question the value proposition of intermediation, delivering increased margin pressures for platforms and consolidated reporting schemes. Financial advisers will continue to feel the sharp end of regulatory and media confrontations, with consumers (rightly or wrongly) feeling increasingly empowered to manage their own financial affairs.

In Australia, the current model of manufacturing and dispensing financial intermediation is broken, with many industry participants unable to recognise and respond to the writing on the wall. As consumers increase their pursuit of value (in a price sense, not an investment style sense), they will increasingly unbundle the intermediated model. For those who are keen to make an ongoing living from the financial services industry, it would be wise to recognise that

they are in the relationship service industry.

This may mean that there is a considerable premium to be charged for relationship albeit that advisers will be unlikely to sell these when they decide to retire from the industry.

So what are the lessons that can be learnt by the New Zealand financial services industry? Well, the obvious one is to have a clear value proposition that enables each member of the value chain to charge (and justify) a premium being charged against their services. Due to the absence of any real tax or superannuation complexity, this limits many advice dispensers to portfolio construction and investment planning. For some, the ideological belief that markets are efficient, and therefore a passive approach to investing is appropriate – they may struggle to justify their presence in the near term (especially as volatility in markets is predicted to increase).

As the New Zealand financial services industry matures, elements will become increasingly more commoditised (ie: differentiated by price and / or brand), meaning that industry participants will need to differentiate themselves through a clear promotion of their comparative advantages.

Specifically at the adviser level, I’m not yet convinced that the majority of financial advisers really have a business to sell (as distinct from a book of business), nor that there is a queue of willing-and-able buyers waiting to relieve them of their businesses.

As many in the New Zealand advisory community near retirement age, I wonder whether their most appropriate exit from the industry is to simply close their doors and encourage their clients to seek alternative advice or fend for themselves.

INVESTMENT

{

}

The influence of interest rate cycles on New Zealand stocks

T

he interest rate cycle is a key influence on the outlook for stocks and has a different impact on stocks in different sectors.

We are part-way through a tightening cycle in NZ following a period of modest to strong economic growth.

Equities have been in a "goldilocks period" where growth expectations have been rising, and inflation expectations under control.

Equities outperform in these conditions.

The setting of interest rates is the parachute that slows the economy down, avoiding an excessive increase in inflation expectations. At this current juncture economic growth is still supportive for equities however inflation surprises need to be watched carefully.

We have examined the effect of previous interest rate cycles on the performance of New Zealand stocks, and in particular how different sectors behave in a rising interest rate environment.

The last significant interest rate cycle started in June 2003 and lasted four years, with the two-year swap rate rising 3.5%, the ten-year swap rate rising 2.5% and the yield curve inverting. Markets are forward looking and price in to the yield curve expectations of official OCR increases. This is reflected in chart 1.

Importantly there were three distinct phases (highlighted by the blue arrows in chart ) in the 2003-2007 increase cycle: ➤ Phase 1 from June 2003 to Nov 2003: saw a short sharp initial rise in rates, with global rates rising as well, the NZD firmed and company profits were rising ➤ Phase 2 from March 2004 to March 2005: saw a steady rise in rates, led by growth, with the yield curve inverting with short term rates higher than long term rates ➤ Phase 3 from March 2006 to June 2007: saw investors anticipate an end to the interest rate increase cycle, with the yield curve flattening.

The last interest rate increase cycle also shows that that interest rate increases

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Chart 1. NZ Rate Rise Cycle

Source: Harbour, Bloomberg

Equity Sector Returns: June 2003 to June 2007

Source: Harbour, Bloomberg

INVESTMENT

are not necessarily bad for equity market returns particularly in the early stages of the tightening cycle. Despite the 3.5% change in the two-year swap, and a 2.5% change in the ten-year swap over the four-year period, New Zealand equities rose just under 100%.

The rise in equities reflected higher activity levels, operating leverage and earnings growth from New Zealand corporates.

What sectors generally outperform the broader market? In the 2003 to 2007 period there were some clear sector implications, as growth and cyclical stocks out-performed utility, property and consumer stocks.

Growth and cyclical sectors tend to have more pricing power during periods of improved economic activity with the ability to drive revenue growth from pricing and volume improvements and an increase in operating leverage all driving company profits.

Company specific attributes also come into play. For example, whilst growth companies like Ryman Healthcare (+540%), Metlifecare (+426%) and cyclical stocks such as Mainfreight (+432%) and Fletcher Building (+232%) outperformed the market in the period, so did utility companies Infratil (+201%), Trustpower (+243%) and retailer Michael Hill (+122%).

The performance of sectors can also be different depending on which stage of the interest rate tightening cycle we are in.

However, it is hard to be definitive about whether we are in the early, mid or late part of the cycle before it has happened but what we do know from experience is that the majority of sectors tend to show positive performance in the late period of the interest rate cycle as investors anticipate an end to the tightening of rates and consider prospective rate cuts.

If we turn our attention to the current

Investors shouldn’t be overly concerned about the impact of interest rate rises on equities. interest rate cycle, although the official cash rate only started rising in March 2014, New Zealand interest rates (as measured by the two-year swap rate) have been rising for over a year. Equity markets also tend to track expected interest rate movements more than actual official rate changes.

The current change in interest rates is slightly more aggressive than the 2003-2007 cycle so far, but we are starting from a lower base.

At Harbour we are forecasting rates to continue to drift higher over the medium term as policy rates normalise to a more neutral level.

Already in the early part of the cycle, growth stocks have performed much as expected, out-performing other sectors.

In fact, in the last year, growth stocks are the only sector out-performing the market.

While we would expect sensitivities to be similar to the 2003-2007 period, significant industry changes have contributed to some outcomes that are different from what history would suggest.

Firstly, utilities have significantly underperformed reflecting a market that has been oversupplied in electricity generation, regulatory and political uncertainty around policies, and competition from

new listings following the mixed ownership model within the sector.

Similarly, the property sector has performed worse than history would suggest reflecting the capital raising pressure that the listed vehicles have placed on the market to either buy out management contracts, shore up balance sheets or use the proceeds to make acquisitions and fund developments.

The changing makeup of some of the companies within the NZ share market may also make this period different. Fletcher Building for example, is now a conglomerate of businesses and may not experience to the same extent the operating leverage it previously had experienced in the past.

We have also seen the composition of the NZ market change over the last five years, with cyclical companies having been taken over and new listings in the burgeoning tech sector, which in itself includes varying business models and franchises that are in different stages of the company lifecycle.

As we move through the interest rate cycle in New Zealand, investors shouldn’t be overly concerned about the impact of interest rate rises on equities. It is Harbour’s view that in periods of rising interest rates sectors perform differently, however growth and cyclical companies generally outperform the market. It is also important to have diversification when investing in growth portfolios as stock specific factors can also play a part in investor returns.

Craig Stent and Shane Solly are Directors at Harbour Asset Management: a leading fund manager with extensive professional investment experience managing funds for government institutions, corporate superannuation funds, multi-nationals, charities, banks and insurance companies.

The information and analysis in this commentary is for general information purposes only. It does not take into account any person’s particular financial situation or goals and accordingly does not constitute personalised financial advice. Please see the full disclaimer on our website www.harbourasset.co.nz

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{ KIWISAVER }

SIMPLIFYING

KiwiSaver FOR KIWIS

Many people think KiwiSaver is owned by the Government.

That's just one misconception that we need to put right.

BY: Susan Edmunds

thing but it’s overly complex for individuals.

There’s a lack of trust because of that complexity.”

He says such schemes as Grosvenor and Fisher Funds have been communicating well with customers, perhaps because not having default status has meant they’ve had to work harder to attract and retain members.

Information

H

e’s only been working with KiwiSaver for the past yearand-a-half but adviser Allan Rickerby has already identified one thing he’d really like to fix: New Zealanders’ basic lack of knowledge about the scheme.

He is the managing director of Super Advice Services, which has offices on both sides of the Tasman. In Australia, the firm has $1 billion under advice and has been operating for 25 years. “We’re fairly new [in New Zealand] but have spent the last 18 months researching the market and we’re away and doing it now,”

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Rickerby says.

New Zealand needs a concerted effort to boost financial literacy, he says, to help people to understand complex issues in simple terms. This is especially true when it comes to KiwiSaver.

Such websites as Sorted are good, he says, but people don’t know they exist.

And the impact of regulatory compliance has created a level of complexity that is alienating many consumers, who aren’t getting communication they can understand from their KiwiSaver providers.

“The Government has tried to do the right

“[Default schemes] have lawyers to protect their arses,” Rickerby says. “The information they put out is harder to understand because they’re trying to protect themselves with a 40-page document. People just need to know what they are invested in and what the fees and charges are.”

Many people he encounters have quite basic misconceptions about KiwiSaver, such as thinking the Government owns the money in it. “They don’t understand that it’s held in trust for them. They will become more aware as balances grow. When they have $10,000 they will want to learn more.”

Balance growth has already outpaced expectations, he says. “At the end of December there was $18 billion under management. It’s happening rapidly in New Zealand.”

Another problem Rickerby has noticed is that when people do seek advice, they can’t always find the right people to turn to. “People are seeking advice because they are seeing

INVESTMENT

their account balances growing, or they’re getting old. But there are only a very small group of people who can assist with education and they charge fees for that. For the individual person to seek advice is too onerous.”

He says most authorised financial advisers would have to charge more than the average saver would want to pay for advice on their KiwiSaver account. “It’s a Catch 22 and the Government is aware of it.”

But advisers can get around the problem, he says, for KiwiSavers should be dealt with in bulk, via employer schemes.

“In Australia, we deal with the masses and in New Zealand through employer groups we are able to deal with the masses, too.”

Super Advice Services targets businesses with more than 50 employees as potential clients.

Licensed It then builds a dedicated website, which the group’s members can use to access information about their savings and receive licensed advice at no charge.

“You can put simple tools and concepts in front of them. We couldn’t afford to do what we do on an individual basis, so the focus is on companies,” Rickerby says.

Sometimes, the employer wants an agreement with a particular KiwiSaver provider.

“If they want to put in place a preferred KiwiSaver arrangement, we tend to favour New Zealand funds,” he says.

“New Zealanders like the idea of using New Zealand funds and Kiwi service provider.

Our value proposition is being totally independent, not pushing one particular product. If someone wants an AMP fund, we can do that. If they are banking with someone and want their KiwiSaver there too, we can do that.”

Ninety per cent of the Super Advice Services funds under management are in balanced growth portfolios.

“If the employer wants a default arrangement, we would advise balanced growth or age-based funds and explain why... New Zealand defaults are extremely conservative and investors do seem to lose out by being in a default scheme.”

Arrangements Super Advice Services also offers to put group insurance arrangements in place.

Rickerby says this could be a way for New Zealand to tackle its underinsurance problem. He can get a 40-year-old insured for $1 million in Australia at about a quarter of the price of the same cover in New Zealand, because it’s managed through group schemes.

People need to know what they are invested in and what the fees and charges are.

“The issue is the cost of advice.

The processes mean that advisers here are paid 200% commission on insurance…

In Australia I would get 10% brokerage.

If I have 200 people in a company fund and I am getting 10%, I can afford to structure that properly.”

If the rules changed to allow a limited amount of insurance inside a KiwiSaver account, insurance would be made a lot cheaper for New Zealanders, he says.

“People do die and this gives automatic acceptance with no medical underwriting.”

Rickerby says the other main focus for his company, as a transTasman operation, is the portability of super savings.

Questions At the moment, the firm gets a handful of inquiries every day from people thinking about moving their money home. “Being a Kiwi returning myself, we kept getting asked questions about moving money over here.”

Each case merits a different approach, he says. “There’s potentially $3 billion to $5 billion to come here; it’s significant and very good for New Zealand. Eventually, those funds will be spent in the NZ economy.”

Sometimes it doesn’t make sense to close the Australian funds straight away. “There’s often insurance in Australian super funds.

Some have retained their life insurance in the funds and retained the funds and we’ve taken over the service rights and left them there. But in many cases it makes sense to transfer.”

Rickerby is also an authorised adviser in Australia, so is able to sign statutory declarations when required, to move lost super funds out of the Australian Tax Office accounts.

Eventually, Rickerby says KiwiSaver will have to become compulsory. There’s already political inclination to do it, he says.

“The reality is that Labour supports compulsory KiwiSaver. National deferred it last year and put it off for two years, I don’t think National will push for it at the election because employer groups who vote for them aren’t keen on it but John Key knows it’s good for the country.”

He said the scheme being compulsory would also drive people’s interest in the product. “Once it becomes compulsory, when people’s account balances grow in another five or so years, they’ll start taking more interest.

Am I in the right fund, the right investment?

As much as they try to simplify it, until it becomes relevant to you, it’s not relevant.”

Tool for parents KiwiSaver is potentially a very good tool for parents to teach their children about money, he says.

“If you get children involved and enrolled they’ll get $1000. Show them the statement each year; say, ‘That’s your money’. From a financial literacy point of view, if a child has $1000 invested and asks questions, it will help in several ways. If they can go online, they can see ‘that’s my money; why has that happened…?’”

He said the system seemed overall to be headed in the right direction. Employers’ interest in the offering group KiwiSaver would increase as the employment market became tougher.

“The workforce is changing and it’s hard to get good employees. Employers need to realise they need to be the employer of choice.

With their scale they can organise benefits that are at a discount to what the employee can get.”

New Zealand’s already a step ahead of Australia with the simplicity of having savings tied to an IRD number, he says. “The growth of super savings in Australia has been good for the country and it’s growing in New Zealand at a rapid rate. There are great things happening – we just need to fix a lack of trust and understanding.”

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 1.3513 2.70 2.76 2.99 AMP Prem PSS OnePath NZ Cash 1.452 2.75 2.88 3.03 AMP PSS Select Cash 1.3766 2.53 2.58 2.68 ANZ KiwiSaver-Cash 1.1998 2.99 2.95 2.79 Aon KiwiSaver OnePath Cash 14.0531 2.40 2.54 2.75 Aon KiwiSaver Tyndall Cash 12.982 2.93 3.18 3.28 ASB KiwiSaver Scheme's NZ Cash 1.2992 3.05 2.73 2.67 Asteron Rtrmnt Savings Plan Deposit 10.04 3.24 3.23 3.24 Asteron Super Yield Deposit Fund 10.0645 3.24 3.23 3.24 Asteron Superplan 2000 Capital Fund 2.1128 3.37 3.35 3.36 Asteron Superplan Capital Fund 2.5226 2.84 2.82 2.83 FC KiwiSaver Scheme's NZ Cash 1.2979 3.04 2.73 2.66 Grosvenor KiwiSaver Enhanced 1.3736 2.97 3.14 3.44 Income Fund Mercer KiwiSaver Cash -3.06 3.04 3.46 Mercer Super Trust KiwiSaver Cash -3.02 3.03 3.42 ANZ Default KiwiSaver Scheme-Cash 1.2893 2.98 2.99 2.91 SIL 60s + Sup Cash Fund 2.014 2.25 2.34 2.54 SIL Cash Plus 2.014 2.25 2.34 2.54 OneAnswer KiwiSaver-Cash Fund 1.2505 2.92 2.84 2.64 Staples Rodway KiwiSaver Conservative -2.80 2.91 2.97 Fisher TWO KiwiSaver Scheme-Presv 2598.1477 3.12 3.15 3.13 Westpac KiwiSaver-Cash Fund 1.2577 2.96 2.83 2.88 New Zealand Insurance Fund Cash Non-PIE Fidelity Life Cash Portfolio 3.1281 1.69 1.61 1.72 New Zealand Insurance Fund Equity Region Asia Pacific SIL 60s + Sup Pacific Basin Share 1.6988 0.37 1.40 3.43 SIL P/R Pacific Basin Fund 1.6988 0.37 1.40 3.43 New Zealand Insurance Fund Equity Region Australasia Aon KiwiSaver Milford 2.2504 15.55 17.33 14.65 Asteron Superplan 2000 Trans Tasman 3.0105 17.11 13.76 12.63 Fund Asteron Superplan Trans Tasman Fund 3.8398 16.36 13.04 11.91 Grosvenor KiwiSaver Socially Responsible 1.2479 4.69 5.50 -Grosvenor KiwiSaver Trs-Tasm Sm 1.1186 7.12 -0.23 -Coms Shr Mercer Super Trust KiwiSaver Shares -19.49 12.73 12.66 Mercer Super Trust KiwiSaver -20.53 15.95 14.75 TransTasman Milford Active Growth KiwiSaver 2.2589 15.71 17.50 14.75 NZ Guardian Trust GIFs - Small Companies 4.0185 9.95 7.43 10.52 OneAnswer KiwiSaver-Australasian Share 1.2755 21.68 16.36 14.98 Smartshares Smartkiwi Growth Fund 0.98403 14.79 7.79 10.01 New Zealand Insurance Fund Equity Region Emerging Markets Fisher FreedomPlan - Emerg Mkts 2.1927 0.12 -5.58 2.21 Fisher FuturePlan - Emerg Mkts 2.1927 0.12 -5.58 2.21 New Zealand Insurance Fund Equity Region Europe Asteron Superplan 2000 European Fund 1.9455 15.89 11.70 10.40 Asteron Superplan European Fund 2.3031 15.09 10.91 9.64 New Zealand Insurance Fund Equity Region North America Asteron Superplan 2000 Nth Amrn Fd 1.8937 14.97 12.59 11.81 Asteron Superplan North American Fund 2.6966 14.09 11.80 11.02 New Zealand Insurance Fund Equity Region Australasia AMP Prem PSS OnePath NZ Shares 1.8016 22.12 15.94 14.99 New Zealand Insurance Fund Equity Region NZ Asteron Rtrmnt Savings Plan NZ Equity 2.8462 17.18 13.67 12.75 SIL 60s + Sup NZ Share Fund 4.0354 20.58 16.70 14.86 New Zealand Insurance Fund Equity Region NZ Non-PIE Fidelity Life NZ Shares Portfolio 4.4751 10.69 6.18 7.82 New Zealand Insurance Fund Equity Region World AMP Prem PSS FD Intl Share Fund 1 Value 0.9372 9.13 7.20 6.91 AMP Prem PSS FD Intl Share Fund 0.9556 6.05 8.29 6.31 3 Growth Asteron Rtrmnt Savings Plan Intl Eqty 2.0874 10.48 10.25 8.28 Asteron Superplan 2000 Aggressive Fund 1.5926 8.79 6.00 7.21 Asteron Superplan 2000 Global Fund 1.7017 11.00 9.87 8.28 Asteron Superplan Aggressive Fund 1.5071 8.11 5.25 6.52 Asteron Superplan Global Fund 2.015 10.07 8.97 7.40 FC KiwiSaver Scheme's Active High 1.1503 15.91 9.99 9.81 Growth FC KiwiSaver Scheme's Global Sustain 1.6631 14.23 11.45 11.03 Grosvenor KiwiSaver International Share 1.3527 14.02 9.15 -Mercer Super Trust KiwiSaver Global -18.49 11.06 11.51 NZ Guardian Trust GIFs - Global Equity 1.5494 12.48 10.10 9.17 SIL 60s + Sup International Share Fund 2.2399 9.21 9.66 9.22

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62.13 4.49 2.18 178.98 3.09 1.31 266.16 3.67 4.85 3.70 26.24 8.78

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

18.04

--

9.28 2.12 1.76 1.15 1.49 19.84 19.12 23.03 214.56

----------

4.23

--

0.18  2.95  76.11  5.50



23.45   9.84 3.95



1.84



2.08



255.24  8.83  17.72  21.80  1.74 21.59

---

1.65 13.52

---

1.54 13.02

---

4.85  1.47  2.37  2.07



5.34



5.08



3.67 0.56 2.76 4.81 27.93

    

3.27



6.33  5.01  1.91  5.62  0.83 

Name

Latest Transaction Exit Price 2.2399 1.1649

1 Yr Return % 9.21 9.88

3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 9.66 9.22 11.41  10.27 9.81 24.12 

SIL International Share OneAnswer KiwiSaver-Intl Share OneAnswer KiwiSaver-Sustainable 1.1995 7.16 6.97 6.51 Growth Fisher FreedomPlan - Intl Coms 2.46762 19.61 8.67 10.89 Fisher FuturePlan - Intl Coms 2.46762 19.61 8.67 10.89 Fisher TWO KiwiSaver Scheme-Eq 3245.09367 18.70 9.82 10.69 New Zealand Insurance Fund Equity Region World Non-PIE Fidelity Life Aggressive 2.6032 9.14 3.10 4.06 Fidelity Life International 1.9246 10.27 5.26 5.60 New Zealand Insurance Fund Equity Sector Global - Real Estate Mercer Super Trust KiwiSaver Real Assets -17.10 9.98 14.49 OneAnswer KiwiSaver-Intl Property 1.1161 16.33 11.06 20.11 New Zealand Insurance Fund Equity Sector NZ - Real Estate MFL Property Fund 3.015 13.79 14.81 17.15 OneAnswer KiwiSaver-Australasian Prpty 1.3125 14.53 14.99 15.71 New Zealand Insurance Fund Global Bond AMP Prem PSS Blackrock Global Fixed Int 1.7213 7.09 6.21 6.29 AMP Prem PSS PIMCO Global Fixed 1.9866 9.84 8.70 10.01 Interest AMP Prem PSS SSgA Global Fixed 1.697 6.29 6.10 5.57 Int Index Asteron Rtrmnt Savings Plan Intl Fx Int 2.9802 8.12 6.43 6.61 Asteron Superplan 2000 Global Bond Fund 2.6673 7.72 6.04 6.66 Asteron Superplan Global Bond Fund 2.5228 7.73 6.05 6.64 Mercer Super Trust KiwiSaver Fixed Intr -5.65 5.37 7.03 OneAnswer KiwiSaver-Intl Fxd Int 1.4642 5.59 5.50 5.49 New Zealand Insurance Fund Miscellaneous Fidelity KiwiSaver-Options Kiwi Fund 5.33189 15.17 4.04 10.10 Westpac KiwiSaver-Capital Protect Plan 1 1.6618 16.41 10.95 11.37 Westpac KiwiSaver-Capital Protect Plan 2 1.4919 16.43 10.96 -New Zealand Insurance Fund Miscellaneous Non-PIE Fidelity Life Options Portfolio 4.0422 10.49 2.65 6.93 New Zealand Insurance Fund Mortgages Non-PIE Fidelity Life Options Portfolio 4.0422 10.49 2.65 6.93 New Zealand Insurance Fund Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund 1.1806 15.25 10.40 9.95 AMP PSS DynamicMkts Growth 1.5139 14.27 9.29 9.32 AMP PSS Select Growth 1.4276 14.68 9.43 9.48 Aon KiwiSaver Russell Lifepoints 2045 6.1249 12.61 11.52 13.11 Fidelity KiwiSaver-Aggressive Kiwi Fund 3.51132 11.85 7.14 8.85 Fisher Funds Growth KiwiSaver Fund 1.4538 11.58 9.43 11.70 Grosvenor KiwiSaver Geared Growth Fund 1.4225 10.86 7.34 -Grosvenor KiwiSaver High Growth Fund 1.1246 10.86 7.35 7.47 Mercer KiwiSaver High Growth -16.82 10.57 11.67 Mercer Super Trust KiwiSaver High -16.92 10.67 11.59 Growth Fisher FreedomPlan - Growth 2.2729 14.33 8.67 9.17 Fisher FuturePlan - Growth 2.2729 14.33 8.67 9.17 Fisher TWO KiwiSaver Scheme-Gr 1.31689 15.44 10.38 10.97 New Zealand Insurance Fund Multisector - Aggressive Non-PIE AMP PRP Dynamic 1.7268 12.79 8.04 7.55 New Zealand Insurance Fund Multisector - Balanced AMP KiwiSaver LS Balanced Fund 1.3309 11.21 8.60 8.42 AMP KiwiSaver LS Moderate Balanced 1.334 9.76 7.57 7.64 Fund AMP KiwiSaver TOWER Balanced Fund 1.3864 12.60 8.65 9.03 AMP PSS DynamicMkts Balanced 1.5776 10.39 7.65 7.75 AMP PSS Lifesteps Consolidation 1.5247 9.07 6.72 7.00 AMP PSS Lifesteps Progression 1.5939 10.45 7.80 7.84 AMP PSS Select Balanced 1.5285 10.59 7.78 7.82 ANZ KiwiSaver-Balanced 1.3934 11.24 9.75 10.27 Aon KiwiSaver OnePath Balanced 19.2382 11.83 10.14 11.70 Aon KiwiSaver Russell Lifepoints 2025 6.8484 9.86 9.82 11.46 Aon KiwiSaver Russell Lifepoints Bal 6.6888 11.04 10.42 12.04 ASB KiwiSaver Scheme's Balanced 1.3103 9.30 8.37 9.53 Asteron Rtrmnt Savings Plan Mgd Neutral 2.5613 9.99 9.40 9.13 Asteron Super Yield Managed Fund 12.9658 10.30 9.47 9.18 Asteron Superplan 2000 Balanced Fund 2.0414 10.00 9.02 8.61 Asteron Superplan Balanced Fund 2.6154 9.14 8.15 7.81 FC KiwiSaver Scheme's Active Balanced 1.3061 10.97 8.27 8.82 Fidelity KiwiSaver-Balanced Kiwi Fund 7.09822 7.75 6.96 7.28 Fidelity KiwiSaver-Ethical Kiwi 2.70936 7.13 8.18 7.91 FirstChoice KiwiSaver Scheme's Balanced 1.3074 9.28 8.37 9.53 Grosvenor KiwiSaver Balanced Fund 1.3507 7.37 6.17 6.85 Mercer Super Trust KiwiSaver Moderate -11.55 8.13 9.04

2.22



3.16  29.57  43.91  3.38 2.21

 

0.98 6.02

 

461.76  9.49  2.26



2.51  8.46



1.25  1.03  1.54  1.08   2.17 72.40 10.54 8.97

----

22.81

--

22.81

--

171.42  3.81  32.96  7.85  17.95  732.85  3.62  84.92  49.77  9.89  8.14  78.69  140.04  107.34



469.35  283.70



18.27  3.12   7.86 3.80  49.53  750.07  15.81  9.74  36.92  421.29  14.71  18.97  8.68  62.14  27.50  112.65  11.73  27.32  122.54  41.17 

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price %  Milford KiwiSaver Balanced 1.4975 12.15 12.91 -- 42.45 ANZ Default KiwiSaver Scheme-Balanced 1.3336 10.60 9.17 9.34 30.42  OneAnswer KiwiSaver-Balanced 1.4081 11.37 9.82 10.36 278.57  Smartshares Smartkiwi Balanced Fund 1.1448 10.63 5.83 7.40 7.41  Fisher FreedomPlan - Balanced Fund 3.20929 11.07 7.83 8.02 11.78  Fisher FuturePlan - Balanced 3.20929 11.07 7.83 8.02 138.96  Fisher TWO KiwiSaver Scheme-Bal 3814.70434 12.32 8.73 9.05 394.13  Westpac KiwiSaver-Balanced Fund 1.3308 10.96 8.41 9.34 623.31  Westpac Retirement Plan - Balanced Port 2.8625 9.77 7.27 8.15 94.97  New Zealand Insurance Fund Multisector - Balanced Non-PIE Fidelity Life Balanced 3.5963 6.69 5.50 6.02 78.68  Fidelity Life Ethical Portfolio 2.4874 6.12 6.23 6.06 0.86  New Zealand Insurance Fund Multisector - Conservative AMP KiwiSaver Default Fund 1.359 6.57 5.16 5.19 1219.35  AMP PSS Select Income 1.562 1.84 3.50 4.31 2.46  ANZ KiwiSaver-Conservative 1.3851 6.89 6.58 7.02 347.99  Aon KiwiSaver Russell Lifepoints Cnsrv 7.6677 7.82 8.61 9.89 62.16  ASB KiwiSaver Scheme's Cnsrv (Default) 1.3995 6.17 5.63 6.08 2027.01  Fidelity KiwiSaver-Capital Guarant Kiwi 2.59263 3.31 4.13 4.51 38.64  FirstChoice KiwiSaver Scheme's Conserv 1.3972 6.17 5.62 6.06 88.99  Fisher Funds Conservative KiwiSaver Fund 1.2905 7.46 6.60 5.30 237.35  Mercer KiwiSaver Conservative (Default) -8.67 6.86 7.60 795.28  ANZ Default KiwiSaver Scheme-Cnsrv 1.4019 6.99 6.73 7.05 760.44  OneAnswer KiwiSaver-Conservative 1.3983 6.90 6.64 7.09 287.71  Smartshares Smartkiwi Conservative Fund 1.34269 7.31 5.76 5.38 3.20  Fisher FuturePlan - Capital Prot 1.15955 1.51 1.73 1.84 31.81  Fisher TWO KiwiSaver Schm-Csh 1.40507 7.24 6.15 6.23 516.84  Enh (Dflt) New Zealand Insurance Fund Multisector - Conservative Non-PIE Fidelity Life Conservative 3.8235 4.68 4.49 5.17 50.13 -New Zealand Insurance Fund Multisector - Growth AMP KiwiSaver LS Growth Fund 1.2306 13.88 9.65 9.32 372.62  AMP KiwiSaver OnePath Balanced 1.4955 12.42 10.87 11.49 100.16  Plus Fund AMP KiwiSaver Tyndall Balanced Fund 1.3043 11.17 8.29 9.02 14.71  AMP PSS Lifesteps Growth 1.5224 13.42 8.77 8.77 1.02  ANZ KiwiSaver-Balanced Growth 1.3793 13.45 11.19 11.76 605.21  ANZ KiwiSaver-Growth 1.3554 15.44 12.58 13.17 1086.21  Aon KiwiSaver Russell Lifepoints 2035 6.4996 11.32 10.74 12.31 8.43  Aon KiwiSaver Russell Lifepoints Growth 6.4515 12.23 11.29 12.73 15.57  Aon KiwiSaver Tyndall Balanced 13.3728 10.75 8.35 9.10 4.19  ASB KiwiSaver Scheme's Growth 1.2411 11.02 9.49 10.66 410.27  Asteron Rtrmnt Savings Plan Mgd Growth 2.5058 11.26 10.33 9.66 26.35  Asteron Superplan 2000 Dynamic Fund 1.9681 11.22 9.71 9.04 2.10  Asteron Superplan Dynamic Fund 2.2509 10.39 9.05 8.32 18.42  FC KiwiSaver Scheme's Active Growth 1.2547 13.39 9.48 9.80 27.88  Fidelity KiwiSaver-Growth Kiwi Fund 6.89837 9.79 7.82 7.86 50.17  FirstChoice KiwiSaver Scheme's Growth 1.2378 11.01 9.48 10.67 22.58  Forsyth Barr KiwiSaver Balanced Port 1.2363 4.61 5.22 5.30 10.41   Forsyth Barr KiwiSaver Growth Portfolio 1.1661 5.77 5.80 5.59 9.10 Grosvenor KiwiSaver Balanced Growth 1.2846 9.07 6.78 -- 53.67  Mercer KiwiSaver Balanced -12.90 8.83 10.01 56.52  Mercer Super Trust KiwiSaver Active Bal -13.07 8.88 9.97 55.96  Mercer Super Trust KiwiSaver Growth -14.50 9.64 10.51 5.83  ANZ Default KiwiSaver Scheme1.2979 12.58 10.42 10.44 34.61  Balanced Gr ANZ Default KiwiSaver Scheme-Growth 1.2618 14.61 11.69 11.53 29.44  SIL 60s + Sup Balanced Fund 3.218 12.44 10.38 11.25 18.03  SIL Balanced Plus 3.218 12.44 10.38 11.25 76.90  OneAnswer KiwiSaver-Balanced Growth 1.3972 13.57 11.33 11.90 255.24  OneAnswer KiwiSaver-Growth Fund 1.3699 15.64 12.67 13.30 183.33  Staples Rodway KiwiSaver Balanced -11.96 10.38 11.19 18.58  Staples Rodway KiwiSaver Growth -11.26 8.32 8.82 9.67  Westpac KiwiSaver-Growth Fund 1.3175 12.92 9.93 10.64 370.10  Westpac Retirement Plan - Dynamic Port 3.115 11.78 8.86 9.63 99.41  New Zealand Insurance Fund Multisector - Growth Non-PIE Fidelity Life Growth 3.3297 8.48 6.04 6.52 25.97  New Zealand Insurance Fund Multisector - Moderate AMP KiwiSaver LS Conservative Fund 1.4607 6.70 5.82 6.16 176.83  AMP KiwiSaver LS Moderate Fund 1.3828 8.57 6.79 6.95 191.65  AMP PSS DynamicMkts Conservative 1.588 5.77 5.00 5.36 1.03  AMP PSS Lifesteps Maturity 1.5149 5.76 5.05 5.38 2.82  AMP PSS Lifesteps Stability 1.5692 7.76 6.01 6.29 5.05  AMP PSS Select Conservative 1.5791 5.90 5.06 5.43 10.50  ANZ KiwiSaver-Conservative Balanced 1.3964 9.12 8.25 8.75 372.22  Aon KiwiSaver Russell Lifepoints 2015 7.3046 8.30 8.81 10.43 4.37 

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 % Aon KiwiSaver Russell Lifepoints Mod 7.2627 9.48 9.55 10.99 10.65  ASB KiwiSaver Scheme's Moderate 1.3676 7.65 6.98 8.04 577.83  Asteron Rtrmnt Savings Plan Mgd Conserv 2.5412 7.57 7.59 7.92 2.12  Asteron Superplan 2000 Conservative Fund 2.079 7.50 7.25 7.43 2.50  Asteron Superplan Conservative Fund 2.3123 6.51 6.36 6.47 5.62  FC KiwiSaver Scheme's Active Cnsrv 1.3909 7.97 6.65 7.14 6.91  Fidelity KiwiSaver-Conservative Kiwi Fd 7.11159 5.75 6.00 6.74 47.37  FirstChoice KiwiSaver Scheme's 1.3567 7.64 6.98 8.04 21.43  Moderate Grosvenor KiwiSaver Conservative Fund 1.3808 4.81 5.40 6.16 41.86  Mercer Super Trust KiwiSaver Conserv -8.05 6.20 7.31 2.48  ANZ Default KiwiSaver Scheme-Cnsrv Bal 1.3725 8.80 7.97 8.23 10.27  OneAnswer KiwiSaver-Conservative Bal 1.4107 9.17 8.32 8.86 95.33  Fisher TWO KiwiSaver Scheme-Cnsrv 1.45533 8.09 6.81 7.57 87.86  Westpac KiwiSaver-Conservative Fund 1.3683 7.00 6.25 6.97 1295.23  New Zealand Insurance Fund NZ Bonds AMP Prem PSS OnePath NZ Fixed Interest 1.6062 1.80 4.16 5.85 2.24  Asteron Rtrmnt Savings Plan NZ Fixed Int 2.777 2.79 5.27 6.93 1.34  Asteron Superplan 2000 NZ Bond Fund 2.4053 2.71 4.95 6.34 1.49  Asteron Superplan NZ Bond Fund 3.0705 2.70 4.98 6.37 6.44  SIL 60s + Sup NZ Fixed Interest 2.516 1.52 3.84 5.52 3.92  OneAnswer KiwiSaver-NZ Fixed Interest 1.407 2.06 4.35 6.01 5.33  SIL NZ Fixed Interest 2.516 1.52 3.84 5.52 6.68  Westpac Retirement Plan - Accum Port 3.0233 2.90 2.83 3.40 20.32  New Zealand Insurance Fund NZ Bonds Non-PIE Fidelity Life NZ Fixed Interest 3.5866 2.24 2.82 4.12 0.54  New Zealand Insurance Fund Unlisted and Direct Property - NZ Asteron Rtrmnt Savings Plan NZ Property 3.6686 ---- 0.98 -Fisher FreedomPlan - Property Fund 3.89359 10.00 6.65 7.65 0.89 -Fisher FuturePlan - Property 3.89359 10.00 6.65 7.65 7.71 -Fidelity Life Property Portfolio 4.0574 3.60 8.56 7.82 0.49 -New Zealand OE Cash AMP Capital Cash Advantage Fund 1.3214 3.39 3.44 3.49 244.67 -AMP Capital NZ Cash Fund 1.61159 3.18 3.23 3.43 3811.18 -AMP Prem PUT OnePath NZ Cash 1.2882 2.71 2.82 2.96 4.30 -AMP PUT Select Cash 1.2408 2.51 2.53 2.62 3.75 -ASB Cash Fund -3.12 3.14 3.21 514.70 -Public Trust Cash Management Fund 1.2316 1.93 2.04 2.37 21.83 -Fisher Cash Fund 1.2065 2.43 2.39 2.51 18.28 -Westpac Cash Plus Trust 1.2579 3.07 3.05 3.11 45.39 -New Zealand OE Cash Non-PIE AMP UT NZ Cash 1.7367 1.51 1.65 1.96 1.83 -New Zealand OE Equity Region Asia Pacific Non-PIE AMP UT NZ Cash 1.7367 1.51 1.65 1.96 1.83 -New Zealand OE Equity Region Australasia Devon Alpha Fund 1.3848 22.91 15.58 -- 70.41  Devon Trans-Tasman Fund 2.9867 19.14 12.06 12.16 86.84  Harbour Australasian Equity 1.5524 19.51 14.53 -- 82.29  Milford Active Growth 2.2555 15.85 17.44 14.72 755.89  Milford Trans-Tasman 1.7401 13.81 16.03 15.26 250.66  Mint Australia NZ Active Equity 1.7305 20.34 19.11 17.59 36.17  OneAnswer SAC Equity Selection 1.8308 20.61 15.08 14.00 15.51  Blueprint Australasian Shares 1.277 ---- 16.71  Pie Australasian Growth Fund 3.2801 20.29 20.75 29.41 51.94  Tyndall Aggressive Australasian Equity 1.3174 12.64 9.93 10.71 1.22  Tyndall Australasian Small Companies 1.4328 9.00 7.77 -- 0.60  New Zealand OE Equity Region Australia AMP Capital Australian Share Fund 2.14422 5.46 4.16 8.14 40.86  Devon Australian 1.1731 13.11 6.73 -- 27.18  Fisher Funds Australian Growth Fund 2.544 -4.71 5.64 11.29 62.39  Fisher Funds Premium Australian Fund 1.1124 -4.49 6.02 11.39 44.75  OneAnswer SAC Australian Share 3.5909 6.21 4.57 8.21 40.33  New Zealand OE Equity Region Australia Non-PIE AMP UT Australian Shares 2.2856 5.91 3.51 7.03 1.75 -New Zealand OE Equity Region NZ AMP Capital NZ Shares Fund 2.08884 19.42 14.84 13.45 486.49  AMP Capital Strategic NZ Shares Fund 1.85949 19.78 14.58 13.06 282.60  Fisher Funds NZ Growth Fund 5.3955 15.57 18.15 18.10 130.32  Fisher Funds Premium New Zealand Fund 1.2609 15.94 18.28 17.94 46.92  OneAnswer SAC NZ Share 3.1287 20.93 16.86 15.46 91.59  Fisher Trans Tasman Equity Trust 3.5644 16.40 14.09 13.47 43.58  Tyndall Core NZ Equity Fund 1.3385 17.56 14.43 -- 12.78  New Zealand OE Equity Region NZ Non-PIE AMP UT NZ Shares 2.4913 16.71 12.47 11.06 2.71  Name

Latest 1 Yr Transaction Return Exit Price % New Zealand OE Equity Region World AMP Capital Core Global Shares Fund 0.94049 10.23 AMP Capital Core Hedged Global 1.14029 30.41 Shares Fd AMP Capital Emerging Markets Share 0.86703 4.12 AMP Capital Global Shares Fund 1.98583 19.10 AMP Capital Resp Invest Leaders Gl Sh 1.24457 20.33 AMP Prem PUT FD Intl Share Fund 1 Value 0.9813 9.32 AMP Prem PUT FD Intl Share Fund 0.9858 6.09 3 Growth AMP Prem PUT SSgA Global Shares Index 1.2491 7.83 AMP Prem PUT SSgA Global Shares 1.7409 25.71 IndexHdg ASB EasyFund World Shares Fund 1.0895 11.01 Elevation Capital Value Fund 1.3469 8.80 Fisher Funds International Growth Fund 1.3399 11.68 Fisher Funds Premium International Fund 1.3772 12.64 OneAnswer SAC International Share 1.3362 12.23 Fisher Global Fund 4.2399 20.28 New Zealand OE Equity Sector Global - Real Estate AMP Capital Global Propty Securities Fd 1.32697 23.27 ASB EasyFund Global Property Fund 1.0179 7.63 New Zealand OE Equity Sector NZ - Real Estate AMP Capital Listed Property Secs Fd 1.93543 10.76 ASB NZ Property Trust 1.1648 6.71 Mint Australia NZ Real Estate Investment 1.3291 9.99 OneAnswer SAC Property Securities 2.3117 14.13 New Zealand OE Global Bond AMP Capital Hdgd Gbl Fixed Intrst Fund 2.04747 6.25 AMP Prem PUT Blackrock Global Fixed Int 1.6077 7.06 AMP Prem PUT PIMCO Global Fixed 1.9947 9.97 Interest AMP Prem PUT SSgA Global Fixed 1.5765 6.20 Int Index ASB EasyFund World Fixed Interest Trust 1.0467 6.06 Fisher Bond Fund 1.8903 9.02 New Zealand OE Miscellaneous Fisher Funds Property and Infrastructure 1.5832 16.68 Pathfinder Commodity Plus Fund 0.9374 -2.30 Tyndall Income Fund 1.1694 6.64 New Zealand OE Mortgages Westpac Home Loan Trust 1 2.35 Westpac Mortgage Investment Fund 1 2.53 New Zealand OE Mortgages Non-PIE AMP PMF - Mortgage Investment 151.3433 -0.94 New Zealand OE Multisector - Aggressive AMP Capital Growth Fund 2.0943 15.82 AMP PUT DynamicMkts Growth 1.5429 14.43 AMP PUT Select Growth 1.369 14.66 Public Trust Growth Priority Fund 1.6463 13.47 New Zealand OE Multisector - Aggressive Non-PIE AMP UT Dynamic 1.8488 15.08 New Zealand OE Multisector - Balanced AMP Capital Balanced Fund 2.15009 11.72 AMP PUT DynamicMkts Balanced 1.5619 10.27 AMP PUT Select Balanced 1.4743 10.42 ANZ Invmt Fds Balanced 1.3741 10.92 ASB EasyFund Balanced 1.2207 8.66 Milford Balanced 1.4871 11.55 Public Trust Balanced Fund 1.813 9.67 Public Trust Balanced Growth Fund 1.58 10.82 Public Trust Moderate Growth Fund 1.5702 9.44 Westpac Active Balanced Trust 1.7022 10.88 New Zealand OE Multisector - Balanced Non-PIE AMP UT Balanced 1.9732 10.71 AMP UT Balanced - Other 1.709 10.66 New Zealand OE Multisector - Conservative AMP PUT Select Income 1.4567 1.81 ANZ Invmt Fds Conservative 1.2688 6.65 ASB EasyFund Defensive 1.3336 5.53 Public Trust Defensive Fund 1.5337 4.86 New Zealand OE Multisector - Growth ANZ Invmt Fds Balanced Growth 1.4343 13.19 ANZ Invmt Fds Growth 1.4755 15.13 Name

3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 9.34

7.61 1047.55 

16.09 18.29 654.62  0.40 12.26 11.34 7.00

3.57 12.86 11.97 6.63

93.12  141.65  29.71  2.20 

8.21

6.15

1.83



9.11

7.80

3.05



15.86 15.60 4.93  9.57 7.21 4.19 4.52 12.50 11.28

10.06 7.35 6.04 6.53 11.78 11.23

148.38  12.21  21.17  41.55  74.66  83.35 

13.90 23.19 168.50  8.71 15.24 67.12  13.99 7.86 13.02 14.68

14.30 1.71 13.40 15.75

23.87   2.48 32.52  90.16 

5.56 6.09

8.10 173.81  6.23 1.34 

8.81 10.01 2.79  6.09

5.53

4.88 8.57

-- 17.90  9.80 144.71 

4.04



10.14 11.05 35.84 -5.16 -1.46 49.97 5.28 8.35 4.27

----

2.27 2.39

2.42 116.43 2.44 164.72

---

-0.71 -0.69 4.59

--

9.80 9.23 9.32 10.40

9.99 9.35 9.36 10.67

5.17 3.46 12.85 8.33

9.33

9.32

9.24 

8.58 7.57 7.64 9.44 7.75 12.65 8.05 8.65 7.78 8.08

8.57 7.65 7.72 -8.88 -8.37 8.98 8.27 8.72

22.44  4.31  33.12  47.81  81.26  138.68  4.10  9.29  5.29  114.18 

7.51 7.48

7.59 15.12  7.58 0.87 

3.45 6.34 4.99 4.91

 4.26 3.65 -- 22.63  5.45 112.42  5.73 8.45 

11.01 12.22

---

   

Latest 1 Yr 3 Yr Transaction Return Return Exit Price % ASB EasyFund Growth 1.1427 10.27 8.79 Diversified Wealth Management Balanced 1.1239 2.23 0.81 OneAnswer SAC Balanced 2.2958 12.41 10.67 Public Trust Capital Growth Fund 1.8706 12.23 9.62 Fisher Multi Sector Fund 2.5671 11.20 8.65 Westpac Active Growth Trust 1.6019 12.81 9.52 New Zealand OE Multisector - Growth Non-PIE AMP PMF - Active Growth 1.9528 8.17 5.32 AMP UT Legg Mason Balanced 1.439 6.34 4.82 New Zealand OE Multisector - Moderate AMP Capital Conservative Fund NZ 2.07434 6.70 5.59 AMP PUT DynamicMkts Conservative 1.5442 5.60 4.91 AMP PUT Select Conservative 1.5569 5.88 5.01 ANZ Invmt Fds Conservative Balanced 1.3229 8.69 7.90 ASB EasyFund Conservative 1.2971 6.21 5.58 ASB EasyFund Moderate 1.2807 7.04 6.38 Milford Income 1.3441 11.75 13.25 Public Trust Conservative Fund 1.5596 7.69 6.74 Westpac Active Conservative Trust 1.5847 6.32 5.45 New Zealand OE Multisector - Moderate Non-PIE AMP PMF - Balanced 2.2651 5.97 4.51 AMP UT Conservative 1.9237 5.86 4.68 New Zealand OE NZ Bonds AMP Capital NZ Fixed Interest Fund 1.55721 2.53 4.85 AMP Capital NZ Short Duration 1.21126 3.59 3.71 AMP Prem PUT OnePath NZ Fixed Interest 1.5026 1.72 4.10 Harbour NZ Corporate Bond 1.0189 3.46 4.54 OneAnswer SAC NZ Fixed Interest 1.4143 1.64 3.81 Public Trust NZ Bond Fund 1.6558 2.03 3.80 Tyndall Corporate Bond Fund 1.0911 3.90 5.62 New Zealand OE NZ Bonds Non-PIE AMP UT NZ Fixed Interest 1.736 0.88 2.73 New Zealand OE Unlisted and Direct Property - NZ AMP UT NZ Fixed Interest 1.736 0.88 2.73 New Zealand OE Unlisted and Direct Property - NZ Non-PIE AMP UT NZ Property 1.4224 5.52 6.91 Name

5 Yr Size Morningstar Rating Return $M Overall 9.92 20.86  2.39 18.08  11.25 39.79  9.74 3.77  9.40 11.34  9.97 47.21  6.72 17.51 7.83 1.74 5.97 5.29 5.39 -6.50 7.43 -7.37 6.02

 

11.02   1.77 14.61  46.46  306.12  124.29  744.08  9.06  98.30 

5.51 34.78  5.11 0.88  5.99 4.69 5.77 6.10 5.46 5.90 --

1622.73  215.30  2.08  123.46  6.82  2.34  88.52 

3.61

0.64 

3.61

0.64 

-1.77 1.97

--

Returns are calculated to 30/06/14 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 © 2014 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution.

To the extent that any of this information constitutes advice, it is general advice and has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Limited (subsidiaries of Morningstar, Inc.) without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement (in respect of Australian products) or Investment Statement (in respect of New Zealand products) before making any decision to invest. Neither Morningstar, nor Morningstar’s subsidiaries, nor Morningstar’s employees can provide you with personalised financial advice. To obtain advice tailored to your particular circumstances, please contact a professional financial adviser.

Please refer to our Financial Services Guide (FSG) for more information www.morningstar.com.au/fsg.asp

66.65  20.67 

033

ASSET ADVISER

{ DATA }

KIWISAVER BREAKDOWN HOW DID YOU CHOOSE YOUR KIWISAVER FUND AND PROVIDER? Scheme entry method

2008

2009

2010

2011

2012

2013

Members

%

Members

%

Members

%

Members

%

Members

%

Members

%

Default allocated

268,868

38%

369,577

34%

419,250

29%

458,013

26%

503,826

26%

527,325

25%

Employer nominated

94,895

13%

129,963

12%

150,157

10%

165,500

9%

183,097

9%

190

9%

Active choice

352,483

49%

600,709

55%

890,356

61%

1,132,193

64%

1.279 million

65%

1.429 million

67%

391

less than 1%

291

less than 1%

179

less than 1%

226

less than 1%

265

less than 1%

358

less than 1%

Unspecified

HOW MUCH ARE YOU CONTRIBUTING FROM WAGES OR SALARY? Contribution rate

Proportion of members 2010

Proportion of members 2011

Proportion of members 2012

Proportion of members 2013

2%

41%

53%

59%

n/a

3%

n/a

n/a

n/a

58%

4%

55%

43%

36%

36%

8%

4%

4%

4%

5%

DID YOU RECEIVE THE FULL MEMBER TAX CREDIT? 2008

2009

2010

2011

2012

Yes

14%

46%

44%

43%

45%

No

86%

54%

56%

57%

55%

ARE YOU ON A CONTRIBUTIONS HOLIDAY? 2008 Ordinary holiday

2009

2010

2011

2012

2013

25,122

45,069

63,324

83,151

101,141

Financial harship holiday

3280

813

494

383

219

274

Total contributions holiday

3280

25,935

45,563

63,707

83,370

101,415

FOR THOSE WHO HAVE REACHED 65, HOW MUCH IS AVAILABLE TO WITHDRAW? Estimated savings

2012

2013

less than 1%

3%

$1000 to $5000

6%

12%

$5001 to $10,000

21%

19%

$10,001 to $15,000

39%

35%

$15,001 to $20,000

17%

13%

$20,001 to $25,000

8%

8%

$25,001 to $30,000

4%

4%

$30,001 to $35,000

2%

2%

$35,000+

3%

4%

$1,000

SOURCE: IRD

Golden Opportunity A very experienced advisory firm is selling their client base in the Bay of Plenty.

If you are sitting in the rain somewhere else why not contemplate the purchase of an excellent financial advice portfolio and move to the sunny Bay of Plenty.

Key Details ➤ Business has well over 1,000 clients, mainly risk but some savings and investment. ➤ The demographics of the client base provide plenty of opportunity for an active and energetic purchaser ➤ Going concern, there are premises, staff and systems available for someone wanting to move ➤ Rate of return from the existing business of 25% for an approved buyer If you are a young advisor wanting to buy a quality client base and establish yourself, or you want to move to the Bay of Plenty as part of your medium term plan then you should talk to us

Expressions of interest to maree@mikemoore.co.nz

021 974 231 PO Box 47222 ponsonby, Auckland 1144 P: 09 520 5131 F: 09 520 5141 www.mikemoore.co.nz