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Nick Stewart on the rise and rise of responsible investing.
Hamish Kember asks on which of your clients will want to invest ethically, and whether they want to go “deep green” or “slightly green”.
David van Schaardenburg on the history of the adviser industry, starting with the wild west of the 1980s
What
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hundreds of
Stephen Arnold, Founder and Chief Investment Officer at Aoris Investment Management, explains the quality approach that sets its global equity investment strategy apart.
Could you tell me about your investment strategy at Aoris?
We define our approach as Quality First, Value Investing. We see ourselves as business owners. We aim to generate an 8% to 12% p.a. return over a 5- to 7-year market cycle by owning businesses that become progressively more valuable over time, and where the risk of a disappointing outcome is low. Thinking about the attributes we’re looking for:
Firstly, we like businesses that have been around for a long time. That provides a lot of proof-points as to their growth, durability, resilience, profitability, and how competitive they are.
Secondly, we want businesses that grow their earnings. They can’t become more valuable if they don’t grow profitably. We’re looking for businesses that are not only leaders in their markets, but they continue to grow faster than their markets. From a leadership position, they are consistently gaining share every year.
We don’t know what economic challenges are around the corner, so we want companies with balance sheets that are robust and resilient. It also provides them with optionality – they can deploy that capital intelligently when there’s good opportunities to do so.
Lastly, we place a lot of emphasis on management culture and values. This informs our view of how the business can grow, win more customers, do more business with those customers, and keep good people for a long time. That culture and those values are very important to the long-term trajectory of high-quality businesses.
Is there a stock you like that many people haven’t heard of?
Compass Group (CPG:LON) is listed in the UK and is the world’s largest contract catering business. It feeds millions of people every week in places of work, hospitals, universities, remote mining
sites, and sporting stadiums.
This is an interesting business because about half the total market it addresses is currently insourced, but there’s a steady progression of all those organisations to outsource the catering.
You can imagine if you’re a large organisation in New York, or a hospital in the UK, your primary business is something else, and feeding people in the cafeterias is something many organisations are concluding is best done by a specialist. This trend towards outsourcing has become more pronounced in tight labour markets.
Compass is by far the largest in this market and that brings many advantages. It’s the largest purchaser of food in the United States. It has sophisticated practices to manage its business more effectively and efficiently than smaller operators can.
In a growing market, Compass is a consistent market share gainer. It keeps its customers, on average, for more than 20 years. It has a good record of winning new customers every year; most often those who are outsourcing catering services for the first time.
Management are disciplined, work hard to improve Compass at what it does every year, and run the business with a conservative balance sheet.
We think Compass Group can continue to grow profitably at an attractive rate, and we believe we own it today at an attractive share price.
I see you only own 15 stocks; that’s quite unusual?
It is unusual. Firstly, by owning just 15 businesses, it allows us to set those quality criteria very high. If we had 50 businesses, they wouldn’t all be as good as our 15.
Secondly, it allows us to make considered decisions. We expect to replace, say, four of those companies each year. There’s a lot of discipline and
consideration given to those changes, which we make on average every three months. We know our businesses very well, which is helpful when we’re dealing with difficult economic periods, as we have through much of the last few years. Lastly, owning just 15 businesses allows us to be disciplined when it comes to valuations. It’s one thing to own a great business, but it’s important to own them at a sensible price in order to achieve a good investment outcome.
You have had very strong investment outcomes the last few years…?
We are always focused on delivering long-term outcomes for our clients. Since inception in March 2018 through to July 2024, we have delivered 16.7% p.a. for our class A unit trust – comfortably above our 8% to 12% target. That’s been pleasing. I think a lot of that has come from our success in avoiding the problem areas of the market, as well as owning good businesses that grow profitably in line with our expectations, and paying sensible prices for them.
But you only own one of the ‘magnificent seven’?
Indeed. In fact, of the 100 largest tech businesses in the world, we don’t own 99 of them. We do own Microsoft. There’s a lot about Microsoft that speaks to those quality attributes we look for. It’s been around a long time, it has a conservative balance sheet, it keeps its customers for a long time, and it charges modest prices relative to the value it delivers. Customers have a high appetite to take more products from Microsoft, as we are seeing with AI.
It’s also a very broad business. Some of the big tech businesses do predominantly one thing, like cyber security, and that creates an inherently fragile business. Some large tech businesses operate in sectors where market share moves
around in a very fluid fashion, which makes it hard to assess whether they’ll be a market leader in five years’ time.
Lastly, some of the big tech businesses face rising risks, as their business practices are subject to increasing government oversight. It might be regulation regarding anticompetitive business practices, or it might be trade regulations where the government is playing a more active role.
Can you tell me more about what quality means to you, and why it’s a focal point of your research?
On all attributes we set our quality criteria very high. We want to own businesses that are leaders in the market they operate in. Being the largest is not a particular advantage in every industry. Being the largest car company in the world, the largest bank or the largest airline is not a particular advantage. We like businesses where size and scale is a real advantage, and one that becomes more powerful every year as the leader progressively grows faster than their peer group.
We like businesses that keep their customers for a long time, whose customers want to do more business with them, and who’d happily pay more for a product than they are currently charged. That’s a sign of quality, a sign their customers are happy, and it gives us confidence in the ability of the business to grow profitably at a good rate for a very
long time.
We pay a lot of attention to avoiding businesses where we know we’re more likely to trip up as investors. We avoid businesses with a lot of debt on their balance sheets, and those that are competitively weak. And we avoid those where the share price looks very expensive relative to fair value, or companies that are subject to changing regulation – that all goes into our conservative investment approach.
We work very hard to avoid those problematic sorts of businesses and we’ve done a good job since our inception of doing so. That’s made a big contribution to our investment success.
Tell us about your own investing experience.
I’ve been investing internationally for 32 years, having started at Platinum Asset Management in Sydney in 1994. I spent 10 years in London and I think working overseas was a helpful experience for someone in this part of the world who’s investing in global equities.
I was a banks analyst in an investment at Goldman Sachs in London during the GFC, and seeing the problems banks experienced in stressed financial conditions has informed our decision not to own banks.
Other areas we consider out of bounds include energy or mining companies, because externalities like commodity prices or geopolitical events play a big
role in the earnings of those businesses. Similarly, we actively avoid businesses where government regulation plays a big role, such as utilities. Regulations can be fluid and can change unexpectedly. We want to own businesses that are much more in control of their own destiny.
Is there anything else you think New Zealand investors should know?
A couple of things are distinctive about how we’re set up at Aoris: First and foremost, we want to do one thing well, so we’re a single-strategy business. Number two, we’re aware that the amount of funds can sometimes become an impediment to a manager’s performance. Based on market liquidity today, A$5 billion is the most we’ll manage. Third, we’re unusually transparent and disclose all our holdings every month, which allows our clients to see what we own and what we’re doing. We welcome that. Number four, we’re an independent, staff-owned business. We think this ownership structure is important to allow us to do our best job for our clients. For those interested, there’s a lot of information available on our website (www. aoris.com.au). One document I’d direct readers to is our Owner’s Manual. Our approach is common sense, and executed with uncommon discipline. We think a portfolio of high-quality global businesses can help diversify a lot of New Zealand investors’ portfolios, while also adding some comfort around the underlying durability of their portfolios. A
Welcome to the annual responsible-investing issue of ASSET.
Responsible investing is an area we intend to expand across both ASSET and Good Returns.
The missing part in the responsibleinvesting (RI) equation seems to be with advisers.
There is clearly client demand for funds which take both RI and Environmental, Social & Governance (ESG) into account – especially from the younger generation.
At the other end of the chain, fund managers are creating increasingly more RI products. Many new funds have words such as ‘sustainable’ in their names or descriptions.
However, advisers in New Zealand – the link between funds and investors – is the missing piece.
The number of adviser practitioners who have adopted RI portfolios is low.
This is clearly demonstrated by the observation that it’s always the same small group of advisers who are finalists in the Mindful Money Ethical and Impact Investment awards.
The why is hard to understand.
Clearly there are some advisers who don’t subscribe to – or even vehemently oppose - RI investment principles, just like there are some advisers who don’t embrace KiwiSaver.
In what I would call the old days, the argument was that to invest responsibly meant trading off returns for values.
In this issue of ASSET, we test this theory.
We approached a number of recognised advisers who embrace RI and asked for their recommended funds lists.
We then engaged My Fiduciary to see how these funds stack up in the market - and whether it was possible to build RI portfolios which perform.
As part of this process, we agreed not to name the advisers. Nor did we identify them with the funds they used.
Interestingly, there was some commonality in funds used and also a
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wide range of funds, which supports the fact fund managers are producing good RI products.
Responsible Investing is an area of financial planning we want to see grow.
Later this year, hopefully, we will have some new resources available to advisers.
On a completely different note, it is worth commenting that the Financial Markets Authority appears to be getting tougher as a regulator.
One of the more high-profile actions it has taken is orders against property group Du Val, highlighted by a morning raid on the founder’s property, in conjunction with the police and featuring flak jackets and tasers.
These property offerings were something the FMA had said were on the fringe of its regulatory universesomething, until recently, it had done little about.
It seemed pretty clear to advisers that the wholesale funds offerings promoted to investors were a potential time bomb.
It has always felt like the regulator should be spending more time on these so-called fringe investment offerings compared to what it has done with financial advisers.
Du Val is the most high-profile FMA intervention for some time, but the regulator has also been active in other areas.
Interestingly, the Financial Advisers Disciplinary Committee has no upcoming hearings and its last decision was March 2021.
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Disclaimer
All articles in ASSET are for information purposes only, the content is intended to be of a general nature, does not take into account any person’s specific circumstances, and is not financial, legal, or other advice. It is recommended you seek advice from a suitable expert before taking any action in relation to anything contained in this magazine.
ISSN 1175-9585
BY MARTIN BRENNAN
Gold Band Finance chief executive Martin Brennan argues the definition of what is a bank needs to be reconsidered with the implementation of deposit guarantees scheme.
New Zealand is in the midst of a transformation of the regulation of its deposit taking systems. This is an outcome of the 2023 Deposit Takers Act (DTA), most obviously manifested in the introduction of a government guarantee of the deposits of relevant institutions, up to $100,000 per customer, which comes into effect in the middle of 2025.
This legislation and the deposit guarantees apply not only to registered banks, but also to non-bank deposit takers, such as credit unions, building societies and some regulated finance companies such as Gold Band Finance.
Since the Global Financial Crisis (GFC), regulation of New Zealand banks and non-bank deposit takers has been considerably strengthened, resulting in a significant reduction in risk across the sector.
The implementation of the DTA is going to strengthen regulation all round under a single regulator, the Reserve Bank (RBNZ), in a single system of regulation.
This raises a question. Why should we regard banks and non-bank deposit takers as separate institutions?
Asked another way; what is a bank in New Zealand in a post DTA financial system?
In this context it is interesting to look at some of the choices made by the Australian authorities in the aftermath of the GFC. They have a single class of institution called an Australian Deposit -
taking Institution (ADI).
Another driver of change in Australia was to encourage the development of a fifth pillar to challenge the dominance of the big four banks within the Australian system. Many former credit unions and building societies have reclassified themselves as banks.
Particularly since 2010 there have been many mergers between these smaller ADIs, so that some of them have become more significant participants in the financial system.
Concerns about the domination of the New Zealand market by the same big four banks have been a factor behind the current Commerce Commission and proposed parliamentary select committee enquiries into banking.
I would suggest opening up access to classification as a bank would mitigate some of these issues.
This is also important because of the relative dearth of new deposit takers entering the New Zealand market since 2015, with recent changes to the participants in the banking market being a reflection of regulatory change rather than the entry of new banks per se.
New Zealand Inc can continue to bemoan the lack of competition in the banking sector or ask the question of the RBNZ. Why does it retain pre-DTA regulations defining a bank?
In 1987 there was an article in the Reserve Bank of New Zealand Bulletin on contestable markets, which stressed the importance of relatively free access to the banking market to prevent existing participants from being able to extract excessive profits and provide poor customer service.
These were issues that the existing banks were alleged to have been guilty of prior to the deregulation of the 1980s.
Do we need a revival of this spirit in a post Deposit Compensation Scheme world?
So, we’re again left with our question. If regulatory arrangements are the same for eligibility to be part of the DTA, why will we need to separate banks from other regulated deposit takers?
This point can also be related to the classifications of banks by size under the DTA rules, with some banks being in the same category as most of the existing non-banks, and thus subject to the same regulation.
To its credit, the RBNZ has been proactive in dealing with NBDTs in the lead up to full implementation of the DTA. That said, the elephant in the room does not appear to be on their agenda for serious review.
A revisit as to what constitutes a bank in New Zealand.
It needs to be.
Same regulations as imposed by the RBNZ on all. Yet some can call themselves a bank, others can’t.
Go figure. A
Martin Brennan is the chief executive of Gold Band Finance, a RBNZ licensed Non-Bank Deposit Taker. Not a bank. Yet.
MDRT ROADSHOW: New Zealand Edition
October 29th - Christchurch October 31st - Auckland
Taking it to the next level!
Join Amanda, a seasoned financial planner from Australia, as she shares transformative insights from her journey with Strategic Coach, helping professionals elevate their practices and achieve exponential growth
A highly skilled mindset and strategy coach whose key focus is on transformational change, for businesses and individuals.
Paul is a life risk insurance specialist. Paul “geeks out” on the client experience and relationship building and building a robust protection package for his clients.
Hear from accomplished MDRT members as they share their personal journeys and how MDRT has leveled up their careers and lives.
Event Highlights:
✔ Engaging Keynote Presentations
✔ Real-life Success Stories
✔ Networking Opportunities
✔ Professional Development Insights
Don't miss this exceptional opportunity to connect, learn, and be inspired! Join us at the MDRT Roadshow and discover how MDRT can elevate your financial services career to new heights.
For enquiries, please contact:
Event Details:
Christchurch
Date: 29th of October 2024
Location: Addington Racecourse
Time: 9:30am – 2:30pm
Register: https://tinyurl com/mdrtspeaksCHCH
Auckland
Date: 31st of October 2024
Location: Ellerslie Racecourse
Time: 9:30am – 2:30pm
Register: https://tinyurl.com/mdrtspeaksAKL
Christchurch – Paula Jones – 027 285 3785
Auckland – Aaron Baker - 021 983 747
Health insurer nib has made some organisational changes to support advisers and to ensure it is well prepared for the launch of nib’s Life and Living Benefits suite in early 2025.
Life and Living is the former Kiwibank life insurance business nib announced it was buying in November 2021.
"nib is growing into new markets and products and needs to ensure we can support that growth," chief executive Rob Hennin said in an email to advisers.
"I have created a new distribution leadership team comprising three key distribution roles reporting to me."
Chris Carnall moves to general manager - Adviser Life and Living. In this role he will lead the development of nib's new Life and Living Benefits suite for advisers.
"Chris will form a team that will bring our new products alive for Advisers. This is a particularly important part of our growth strategy, and we are committed to ensuring we have the attention and support of advisers leading up to and following the launch."
Amanda Savill is joining nib and will lead the adviser distribution team, and create "a compelling strategic and operational plan to deliver on service and growth for our advisers.
nib’s adviser partner managers will report to Savill.
Savill was the chief executive at Loan Market until July 2022 then became chief executive of Pic Insurance Brokers. Earlier this year she became a IFSO Scheme commission member and for the past four months has been a director of Savvy Travel.
National Manager - Group: Pippa Leydon will lead the Group business, with responsibility for the strategy and growth of our Group business developing commercial and strategic relationships.
Ian Sargeant and Stu Crowther are leaving nib. "Stu and Ian have both made significant contributions to our business and been nib ambassadors to our advisers and business partners," Hennin says.
Well-known industry figure David Boyle has taken on a new role at Fisher Funds as general manager KiwiSaver.
Most recently, Boyle was the marketing manager at Mint Asset Management, and prior to that held roles at the Retirement Commission and ANZ.
Also joining Boyle at Fisher Funds is David Buell, who has been appointed general manager of growth.
Previously head of institutional at SmartShares, Buell’s CV also includes a chapter as head of distribution at Quay Street Asset Management and senior roles at AMP Capital and Russell Investments.
Fisher Funds describes Buell as an expert at fostering relationships across New Zealand’s institutional, wholesale and retail investment sectors.
Chief client officer Nilesh Mistry says the appointment of Boyle and Buell is significant to the client team.
“We are delighted to welcome two exceptional individuals who both bring extensive industry experience.”
Meanwhile, Fisher Funds fixed interest manager David McLeish has finished up with the firm, describing his time there as “a wonderful stint.”
"I can still remember sitting down at my desk for the first time, confronted with a blank spreadsheet staring back at me and just $7 million of fixed income assets to manage. But with a big hairy audacious goal firmly embedded in my mind,” McLeish says in a LinkedIn post.
"I leave behind a team of simply brilliant investment professionals (and wonderful human beings), who together manage over $10 billion of global fixed-income assets on behalf of more than 500,000 New Zealanders.
"But as I reflect on my time at Fisher Funds, it’s not the size of the business
we've built or the number of trophies in the cabinet that matters most. It is the priceless friendships I have formed with so many incredible colleagues, clients and counterparts."
McLeish says it is "absolutely right to take on the next big thing in my life."
While he has not disclosed his plans, he registered a company called Papakura Capital Partners earlier this year.
Quin Casey has taken the role of acting head of fixed income at Fisher Funds.
Partner’s Life has appointed James Greig as chief risk officer. He joins Partners Life from Southern Cross Health Society, where he was head of risk.
With more than 20 years’ experience in insurance and banking across New Zealand and Australia, Greig has held senior roles across strategy, operations, technology and risk.
His experience includes six years at the Financial Markets Authority in a variety of roles, culminating in director of supervision. He was at ASB for more than 11 years, where his roles included head of operations and risk for multiple business units.
Partners Life chief executive Michael Weston says Greig is “a respected, energetic and innovative leader, who will bring invaluable risk and regulatory expertise to Partners Life.”
Fund manager and KiwiSaver provider Kernel has gained a new board member with significant experience in the tech sector.
Independent director Alastair Grigg has a background in tech businesses, working
formerly as chief operating officer at Xero and chief information officer at Air New Zealand.
Grigg replaced Paul Hocking on the board.
Kernel founder and chief executive Dean Anderson says the new appointment "bolsters the board with tech leadership to support our wider team in our next phase of growth."
Kernel, which recently cracked the $1 billion funds under management, sees itself as being different to other fund managers in that it provides tools and technology for Kiwis to grow their wealth.
"We do not see ourselves playing in the same space as Milford, Simplicity or Smartshares in the medium-to-long term," says Anderson.
First Mortgage Trust (FMT) has appointed Charlie Oscroft as investment relationship manager.
Oscroft spent 24 years at Colliers International - and the past two as an
investment adviser at Tauranga-based Mackersy Property.
He has experience in investment management and capital raising across real estate markets both in New Zealand and overseas.
FMT chief executive Paul Bendall says Oscroft’s role is a new one, demonstrating the company’s growth and strategic vision to “take FMT to the next level.”
“The addition of Charlie as investor relationship manager underscores our commitment to continue to provide excellent service to our investors and executing our strategic plans,” says Bendall.
With $1.7 billion in funds under management, FMT is launching a new wholesale fund which allows it to meet the growing needs of its borrowers, creating a more diverse funding pool for all its investors.
Kōura Wealth has appointed a new head of distribution, Michele Blake, who will lead the KiwiSaver-provider’s adviser channel.
Blake has spent the past 15 years helping financial advisers: firstly at AIA, where she held senior relationship management and retention roles - and most recently at Advice First, where she led the wealth, KiwiSaver and risk advice teams.
Her experience makes her well-placed to educate financial advisers on how KiwiSaver can help them build better client relationships and stronger businesses.
Kōura Wealth managing director Rupert Carlyon says Blake brings a unique perspective to the position.
“Having held both relationship management and adviser management roles, she understands advisers and how to help them succeed.
"Her experience will make her a valuable resource for financial advisers.”
Kōura uses what it calls a ‘facilitator model’, allowing mortgage and risk advisers to help their clients maximise their KiwiSaver accounts without needing to attain Level 5 investment qualifications.
The company says it has onboarded more than 500 advisers under this model A
GRTV: WHEN YOU LOOKED AT THE JOB, YOU WOULD HAVE SEEN NAOMI BALLANTYNE: HER REPUTATION AND WHAT SHE'S DONE IN THE INDUSTRY. HOW DAUNTING WAS IT TO STEP INTO THOSE SHOES?
Michael: It's a great question. With my previous employer, we used to have a rule of thumb: if you got a business from start-up to scale, as an insurer, within 10 years - as a part of a subsidiary - you'd done a fantastic job.
To do that as a standalone business, effectively in 10 to 12 years, is an incredible job. So, I had tremendous respect for that part of the Partners Life story. I'd be naive to say that that's not a little bit daunting to look at, and [I’d] think, ‘How do I carry the torch for this?’
What was really helpful was the amount of time and care and consideration that the board, Naomi and the other executives gave me in terms of easing that path of transition, explaining the history of the business, and also making me feel comfortable to take up that torch and lead it forward off the foundation that Naomi has built.
GRTV: DO YOU TRY TO IMITATE WHAT SHE WAS DOING, OR DO YOU BRING SOMETHING NEW TO THE TABLE?
Michael: You can only be yourself. I've got to know Naomi over the last six months, and built a relationship with her, and she's a very different person to me. So, right from the outset, I’m trying to make sure that there is a continuation in terms of the values and the culture, which I think is core to the brand.
But over time, as I gain an understanding of the market, I’ll work
Good Returns TV sat down with former army captain Michael Weston, just a few months after he became the new Partners Life chief executive.
with the executive team [to figure out] what that next stage of growth for the company looks like. It’s a process.
I think I can pretty comfortably state that the first three to four months that I've been here have been spent trying to get out there and be externally focused: spend a lot of time with our advisers who are core to our business model; get to know the regulators; and get to know some of our key business partners and discover their insights about our business and about the market. That starts to help form a picture, which complements the research I'd done prior to joining.
And we're now entering the stage where, as a management team, we're coming together and putting together our thoughts about the opportunities in the market going forwards: how do we find those unserved needs? And do we have the right capabilities in place to be able to work on that today, or do we need to build it?
GRTV: HOW HARD IS IT TO KEEP THAT EXISTING CULTURE, BUILT WITHIN THE COMPANY, WHEN YOU COME IN AS A NEW LEADER?
Michael: You should probably ask me that in a year's time!
I think in a company like Partners Life, it's relatively simple. The culture is incredibly strong, and the values are very, very grounded: simple things about celebrating the individual, being generous by nature, doing the right thing.
Those values are really core to how people work, and they use them as a decision framework in terms of how they evaluate options and how they make decisions. So, because of that, there's a natural continuation in terms of how we
think about the business going forward.
GRTV: YOU'VE SPENT A LOT OF TIME OUT THERE IN WHAT I CALL ADVISER LAND. WHAT'S THE FEEDBACK BEEN LIKE?
Michael: The feedback's been great.
GRTV: YOU'VE SPENT A LOT OF TIME OUT THERE IN WHAT I CALL ADVISER LAND. WHAT'S THE FEEDBACK BEEN LIKE?
Michael: The feedback's been great.
GRTV: ANY SURPRISES?
Michael: I've learned a lot. I've been pleasantly surprised by the customer focus, the professionalism, and also by the sense that we're in an industry where we all have to partner together.
People aren't looking at the industry as a zero-sum game, or my business versus your business. People are looking at this as, ‘The insurance market in New Zealand is under-penetrated; there are customer needs that need to be served; how do we work together on solutions to address that?’ There's been no shortage of advice along the way.
GRTV: YOUR PREVIOUS WORK WAS IN ASIA, AND I ASSUME THERE'S MASSIVE DIFFERENCES BETWEEN THE ADVISERS YOU HAD IN YOUR OLD BUSINESS AND WHAT YOU HAVE HERE. HOW'S THAT TRANSITION BEEN?
Michael: The transition's been quite significant. If you look at the Asia market, it is still an advice-dominated market, but most of that is captive advice.
The more mature markets do have IFA(Immediate Financing Arrangement) and MGA-style (Managing General Agent) models that they're moving towards. But my previous employer had over 100,000
captive advisers.
The other part is that bancassurance is a very, very large part of the business. And those dynamics are quite different here.
The similarity between Asian markets and New Zealand markets is that insurance is still a product that’s fundamentally complex, and therefore requires advice. It needs to be sold rather than bought. So direct models are still relatively nascent in that regard.
I'm quite used to working with advisers, but generally branded advisors. It's a really nice change in terms of the dynamic: having that partnering approach to working with the independent financial advisers here in New Zealand.
GRTV: YOUR EARLIER CAREER WAS IN THE AUSTRALIAN DEFENCE FORCE AND THE INFANTRY, I BELIEVE. IS THAT RIGHT?
Michael: I was an infantry officer there. I left as a captain, so I did my university education there and then spent just under 12 years in total in service. It was a time I remember very fondly and which gave me a really good grounding for my later career.
GRTV: WHAT DID YOU LEARN FROM YOUR MILITARY TRAINING WHICH YOU THEN
BRING TO A ROLE? WHAT THE ARMY DOES IS GETTING RID OF PEOPLE, WHILE HERE YOU'RE DOING THE OPPOSITE. SO, IT'S THIS JUXTAPOSITION.
Michael: I see it slightly differently. As part of the Australian Defence Force, ‘defence’ is the operative word. And so I think the central thread between my military career and my career today is one of protection.
In between, I spent a bit of time in management consulting. That's where I had a lot of experience with different business models and different industries, but I gravitated back towards those longterm, good outcomes for society and a sense of protection.
I really believe in trying to lead by example. You can't always live up to that, but it's an aspiration for sure. You should never ask people to do things that you are unwilling to do yourself.
Teams are built on trust and communications, and that's something that I work quite hard at – not just with my own team, but also as a team within the industry to solve some of these difficult intractable problems.
GRTV: WHAT NEW THINGS CAN WE EXPECT TO SEE FROM PARTNERS LIFE UNDER YOUR LEADERSHIP?
Michael: There's a few things that everybody should expect to stay consistent. We are, and have always been, a customer-centric company, and we will continue to work to the best interest of customers.
We've always been deeply wedded to innovation and we'll continue to strive towards product innovation and its foundation policy of no legacytechnology.
Lastly, it's very important to us that we advocate for financial literacy and access to advice.
Environmentally, there is a challenge around affordability at the moment, and we need to continue to look at how to make our solutions simpler and more accessible for a wider range of Kiwis.
The other thing that we're thinking a lot about, too, is how to build better feedback loops into our business so that we are doing more listening: how customers perceive us and what they get from our products.
You could sum that up as continually being easier to do business with.
This interview has been edited for clarity. You can watch the full interview at www. goodreturns.co.nz/article/976523404 and listen to it as a podcast. A
One of the biggest contingents of New Zealand advisers hit Vancouver earlier this year to attend the Million Dollar Round Table annual meeting. Philip Macalister tagged along to see what it was all about.
BY PHILIP MACALISTER
MDRT Country chair Rick Willis said it was a very enthusiastic group and “it’s a great environment to be in.”
“The networking opportunities are just absolutely next level.”
In total 42 New Zealanders went up to Vancouver for the four day event. Willis says it's an important event for both personal development and growing his business.
Part of the benefit of MDRT is the new ideas and the ability to share ideas with members of the association.
One of the clear themes of this year's event was the focus on how advisers can use AI in their businesses.
"The bottom line is if you are not in it, at it, or around it you won't be in this industry in five years’ time," Willis says.
One idea he brought back was an example of whereby a client had a medical policy with heavy exclusions but was unclear how he could claim.
“He may as well not have had a policy at all.”
The policy was uploaded into an AI tool and came back with four or five ideas
how he could claim
Willis says it took 30 seconds compared to analyse through AI where the alternative as maybe three hours talking to an underwriter.
Willis also gives an example showing how willing MDRT advisers to share ideas.
He met an American adviser based in Sacramento who invited him to come and see how he ran his business. This adviser was writing one million life policies a year using AI and online tools.
“He lifted the bonnet on his business,” Willis says. “It was next level.”
Willis also talks about how MDRT, which embraces a Whole Person concept, literally changed his life after attending an annual meeting in Miami in 2019.
The concept has seven elements including; Living a robust, healthy lifestyle, Having strong fulfilling relationships, Intellectual development, Career success and growth, Financial security, Spiritual and personal values and having a Commitment to community service.
“It’s like the circle of life,” Willis says.
He realised in 2019 he kept hitting flat spots and needed to make changes.
“I had to make some changes.”
Some of the key ones was finding his spirituality, which happened at a local temple and having more time for his family.
He says MDRT “helped to bring my balance and ground me.”
Embracing the Whole Person approach was “a light bulb moment.”
MDRT is on a roll in New Zealand with membership growth growing 30% in the past year with close to 120 members currently.
Willis says MDRT New Zealand has a very active executive and Christchurchbased adviser Brian Burgess has risen up the ranks of the organisation to be the Oceania chair.
Willis is finishing his term as Country Chair and Travis Hamilton is taking the reins. (Hamilton was profiled in a recent issue of ASSET).
Joining Travis on the committee is North Island chair Aaron Baker and South Island chair Paula Jones.
An MDRT conference is full of speakers from all over the world. Occasionally a Kiwi takes the stage. In Vancouver New Zealand’s sole speaker was Jack Newman who is the Head of Aligned Advice at AIA NZ.
BY PHILIP MACALISTER
Newman has a special session with what MDRT calls the Centre for Field Leadership.
This is a group of people who attend the meeting not as qualifying advisers, but as leaders within the sector.
It seems a little odd to travel to Canada to hear one of our own, but from a personal perspective, and one shared by everyone who heard Newman speak, it was a very special session.
Hopefully, Newman tell his story to New Zealand advisers.
It is a very personal story where Newman talks openly about own story and mental health issues.
Newman tells how he has always loved helping people, but made “a big mistake.”
“I fully neglected my own needs. You can’t fill from an empty cup.”
Ten years ago, he considered ending it all. Around that time he found out his Dad, his best mate, had been diagnosed with cancer.
Newman then was 142kg, was eating poorly and drinking lots of alcohol added
to that “ my mental health was terrible.”
Now he is much lighter, sober, eating well, running, doing breathwork and enjoying life.
Newman is also an ambassador for Movember, an organisation supporting mens’ mental health and suicide prevention along with support for prostrate and testicular cancer patients.
Lead through Inspiration
Newman says everyone has different ideas about the definition of leadership, and there is no best way.
He describes himself as “a simple bloke” and as a leader he has the ability to influence and guide people.
“I believe as a leader I have the opportunity and privilege to have a positive impact someone’s performance.”
“You need to find a passion. If you don’t have passion, it is just a job.
His passion is helping others.
He says when he asks people what they want from him as a leader two
things consistently come up; they want inspiration and clarity.
The latter is easy; “tell them what you want.”
Inspiration is more difficult. Newman reckons there are six key traits which make a good leader.
1. Integrity. Are you doing what you say you are going to do?
2. Trust
3. Authenticity
4. Be true to yourself
5. Passion
6. Being a good person – trying to do the right thing consistently.
Newman calls this the inspiration puzzle.
“If you do all of (these things) you will inspire people,” he says.
Philip Macalister travelled to Vancouver for the MDRT meeting with the support of Fidelity Life.
To find out more about MDRT in New Zealand go to www.mdrt.co.nz. A
BY PHILIP MACALISTER
Just under half of all of New Zealand’s climate reporting entities (CREs) have now lodged their climate reports with the Companies Office.
New Zealand is the first country in the world where they are required to do so by a central government.
This includes licensed fund managers with more than $1 billion in assets under management as well as large banks, insurers and NZX listed companies.
There has been a wide spectrum of approaches: 82% of CREs have lodged standalone climate statements, 6% have integrated them within their financial reports and 12% have included them in a broader sustainability report.
Standalone reports range from six pages to 129, with multiple KiwiSaver fund statements at the top end. Likewise, there is a wide range of styles, from simple compliance documents with the minimum pages to full use of text narratives, illustrations, diagrams, and formulae.
In this first year, CREs were able to opt not to report greenhouse gas emissions and the estimated financial impacts of climate change on their businesses and most have exercised that.
FMA head of reporting and climate related disclosures Jacco Moison says climate statements contain information about businesses climate risks and opportunities not necessarily covered in financial statements.
They can provide a different perspective and tell a type of story that helps investors assess the impact climate change could have on a CRE’s business.
The regulator has been providing individual private feedback to some entities, but not all have required it. Broader public feedback will be contained in a monitoring report at the end of November or early December, ahead of the second season of lodgments.
Variation - lots of it
Mindful Money co-chief executive Barry Coates says there is too much variation in the reports, making it difficult to compare company against company or fund against fund.
He says the standards have allowed
too much flexibility on how and what to report.
Mindful Money gave this input to the Financial Markets Authority (FMA) and the External Reporting Board (XRB) during their development.
“Our concern was that if you don't have specific and precise rules around the kinds of measurements you're putting into climate related disclosures, and you have funds reporting on them, they are going to be different. Which as it turns out they are.”
He would prefer the NZ climate standards to align more closely with the ISSB (International Sustainability Standards Board), which have been adopted in five jurisdictions since the start of the year, and the AASB (Australian Accounting Standards Board).
“I think eventually there may be an evolution of the New Zealand standards towards some more specific measures that are able to be compared internationally.”
He is looking forward to the FMA’s monitoring report and says Mindful Money will begin publishing its own analysis on its website.
“Finance and emissions are subject to some uncertainties but now the methodologies are relatively stable. We will be able to talk about transition plans in the future, who has different targets for emissions reductions, who is undertaking to put a pathway in place to reduce their emissions to net zero by 2050, and what are the international benchmarks for that, but on many other aspects, like the risks and the different scenarios, it's going to
be hard to compare.”
Fund managers can reduce carbon emissions in their funds by up to 60% through portfolio construction; avoiding the worst emitting companies, pursuing active ownership and engaging with companies to reduce emissions, and by voting on resolutions, he says. However, a relatively small number of fund managers in NZ have a strategy and plan to achieve net zero carbon objectives; far fewer than the EU and Australia.
NZ’s principles based approach
MinterEllisonRuddWatts senior partner Lloyd Kavanagh, who has been advising fund managers, banks, insurers and listed companies on preparing climate statements, says most CREs have made a reasonable effort, given the short runway from the legislation being passed and the standards being issued, to the first lodgment dates.
He acknowledges the variation in year one, but expects over the next two or three years, market norms will begin to emerge.
“People are spending a lot of time in this first year looking at what their competitors have done and working out what they can learn. The FMA’s monitoring report, expected in November, will also provide a lot of new information, moving forward.”
Kavanagh also says New Zealand has taken the right approach with a principles-based regime that allows flexibility, even though that results in more variation than a highly prescriptive approach.
“Because NZ went first, there are some material differences, but in many ways NZ's more flexible approach would continue to be better suited to our context because we've pulled into our regime listed companies with a market capitalisation of $60m, which we call large but are not actually large by world standards.”
In comparison the Australian regime, which will be phased in from January next year, will capture many more entities; initially large public companies (500,000-plus employees and $500m-plus revenues), then
medium (250-plus employees and $200m-plus revenue) and in 2026, smaller companies (100-plus employees, $50m-plus revenue).
Kavanagh says the Australian standards will also have a much greater level of granularity and prescribed detail, which is generally more suitable for bigger entities, but smaller Australian entities will likely struggle without the flexibility allowed in New Zealand.
On the question of what use they will provide investors and advisers, Kavanagh says, the objective is to enable primary users—existing and potential investors and creditors—to assess how well climate reporting entities are considering climaterelated risks and opportunities for their businesses.
They can then take that into account in making their own decisions.
However, the term “primary users” covers a wide range from retail KiwiSaver scheme members to experienced investors who are under advice, through to fund managers.
“So the standards are trying to cover a lot of ground. The aim, at least in New Zealand, is to support the allocation of capital towards activities that are consistent with the transition to two things; lower emissions and a climate resilient future,” he said quoting NZ CS 1.
These two things – lower emissions and entity resilience - may appeal to different audiences, they may overlap, but they might not, says Kavanagh.
Lower emissions will be of interest to people concerned about what the companies they invest in are doing to the planet.
“There is some truth in saying it’s not easy to compare the emissions profiles, though the numbers will get better year after year; certainly, from year two, when the emissions will be subject to a form of review and assurance,” he says.
But equally important is how resilient those businesses are to the undoubted impacts that climate change is imposing, both physical impacts such as turbulent weather, and transition impacts such as legislation, government changes to the emissions trading system, disclosure requirements, and changing procurement practices and buyer and investor preferences.
Another example of a transition impact is the European Union’s imposition of restrictions – like its “carbon border adjustments” on imported goods from high-emissions supply chains making access more difficult.
An agricultural products company might
start disclosing that fact and outlining their transition plan on how they will adapt their supply chain.
And then there are physical impacts. “It’s been called out that events such as Cyclone Gabrielle are going to happen more frequently in future, so we need to adapt. You would expect an insurer to be preparing for more insurance claims to describe their strategic response; they might increase premiums or introduce exclusions.
“If you saw another insurer making no mention of those quite logical impacts, you might ask some questions about whether they're thinking deeply enough.”
Kavanagh says climate statements will give a sense of how deeply a company or financial institution is thinking about how the world is changing.
“In this first year there is a huge range of how people have tackled it but if an entity only gives a few pages, it's likely they haven't thought very deeply about how their business will be affected.”
Meanwhile others have been doing voluntary disclosure for a couple of years under the TCFD (task force on climaterelated financial disclosure) framework.
“Those entities have been thinking quite hard about this, and if you are concerned about investing in companies whose business model might need to change, you would be encouraged to see that strategic thinking in evidence.”
Another point to understand is that although climate standards require mandatory disclosure, they do not require the CREs to necessarily change their business model. But they do have to tell the world what, if anything, they are doing.
“So the second thing you should look for
in the climate statement, after considering how sophisticated and deep the thinking is, is whether the entity says it's going to do anything to address the climate-related risks and opportunities and if so, what?
“A business might be thinking in a sophisticated way but has decided it doesn’t need to change, and then you’re in a position to decide whether or not to believe that.”
Kavanagh says readers should also appreciate that uncertainty is a key feature of climate statements, because it's a feature of climate-related change and impacts.
“Some companies will legitimately be saying, ‘We don't know how it will play out, but we’re doing this’, or ‘we're at an early stage with more work to do, but we are devoting effort to doing things.’”
The difference between CREs thinking deeply about climate change and those doing the least possible is striking, says Kavanagh.
“There is generally better disclosure than was present in the previous, voluntary TCFD-inspired disclosures with governance risk management being more to the fore.”
In June the FMA published a “What You Need to Know” guide for investors and financial advisers, among others, covering what information climate statements will include, key considerations and context about that information, legislative requirements, and whether the CRD regime will help reduce greenwashing.
The XRB also put out “Navigating Climate Statements”, a more detailed explanation of climate statements highlighting topics such as uncertainty, comparability and context when evaluating and judging the information they contain. A
The founder of Optima Wealth outlines when and how to talk to clients about responsible investing –and which kind of clients are likely to choose a more ethical path.
BY ANDREA MALCOLM
‘They know they should care, and feel a bit guilty, but when push comes to shove, they want to see higher returns - and you can’t guarantee whether sociallyresponsible funds will be higher, lower or the same going forward.’
Hamish Kember
Christchurch-based Hamish Kember, the founder of Optima Wealth, has assets of $7 million under advice for KiwiSaver and $55 million for portfolio advice.
He uses Consilium KiwiWRAP, and says overall it’s KiwiSaver clients who are the most attracted to responsible investment (RI). About 25-30% of all RI work he does is in the KiwiSaver space, where he uses Booster Socially Responsible Funds.
On average, Kember’s clients are 60 years old, but RI KiwiSaver clients tend to fit into lower demographics, ranging between 30 and 40 years old.
In the portfolio-management space, clients tend to be older, making up about 15% of RI investors.
He says it’s about giving clients options - and most of his clients don’t want to go “deep green”.
“Otherwise, I would probably send them to Pete Lee, who goes much deeper green than most. But many want to go slightly green, and we’ve got options for them.”
Kember says clients are interested in carbon impact, and don't want to invest in tobacco and guns, although the Russian invasion of Ukraine resulted in some feeling quite comfortable with weaponry.
“They’d rather see the right actors with good weapons,” he says.
“When it comes to the investing side, I still go through my fact-finding and normal processes around discovering their goals and aspirations. I don’t necessarily talk about underlying investments and what sort of funds we’re going to use.
“I talk about the concept of responsible investing versus more broad-based investing: the pros and cons of each, because each has benefits and disadvantages.
“Ultimately, it’s towards the end of the conversation.”
Kember says some clients will initially say they want to do values-based or socially-responsible investing, but will return and say they no longer wish to do so.
“They know they should care, and feel a bit guilty, but when push comes to shove, they want to see higher returns - and you can’t guarantee whether socially-responsible funds will be higher, lower or the same going forward.”
He thinks returns for RI funds are comparable, but doesn’t think the evidence is clear to say for sure.
“But I think it’s pretty close.”
For Kember, understanding RI is about being able to provide a solution whichever path the client decides to go down.
“The way our solutions have developed
over the last couple of years, a lot of our funds have an ESG overlay even though they aren’t labelled as such, especially in fixed interest; 95-100% of fixed interest has a sustainable overlay.
“RI in the fixed-interest space is much easier because returns aren’t affected. Even with our more broad-based portfolios. We can start from a position of a Russell Sustainable Fund, then other funds like Dimensional.”
Kember has been using Consilium’s ESG profile tool for six months and has found a few areas which need to be tweaked, but advisers are feeding this back to Consilium.
“In another six months I think it will be perfect.”
Most recently he used it for a client review: it had 80% of the information needed and was useful for giving them comfort around greenwashing. But he doesn’t think a tool will ever drive more RI.
“It’s just there to support the adviser to show the client what we’re doing.”
In general, Kember sees RI as a growing industry but still a long way from becoming mainstream. He thinks it will be another generation before it becomes the preferred option.
“Baby boomers don’t really care. They might think they should, but, when push comes to shove - where they’re putting their money - there’s a percentage out there.” A
More and more investors are using their ethical principles as the primary filter when choosing how to grow their money.
BY ANDREA MALCOLM
Almost half of Stewart Group’s $500 million funds under management is invested in sustainable funds.
Last year, the figure for the Hawke’s Bay wealth management firm was 41% of $450m FUM - and yet two years before that it was zero percent.
Chief executive and executive director Nick Stewart says the growth of ESG (Environmental, Social and Governance) sustainable options in the market is a recent phenomenon, which coincided with the rise of PIEs and the increase in tax take on trusts.
“So we are finding that quite a few people, when they look at their investment options, are cognisant of seeking a return from capitalism, a lesser tax burden and expressing their ethical beliefs in their portfolio,” he says.
“In my view, a lot of funds have flowed into the sustainable or ethical sector partly because of the timing of some of these peripheral factors.
“Yes, there are plain vanilla PIEs, but, if you look at the plethora of new options in recent years, a much higher percentage would have an ethical overlay than we have seen in the past.”
KiwiSaver high on RI
Stewart Group generally has a higher percentage of KiwiSaver requests for
an ethical overlay: around two-thirds KiwiSaver to one-third managed portfolios. He doesn't put it down to demographics, but the higher profile of Responsible Investing (RI) in KiwiSaver, particularly in mainstream media, might be a factor.
“Also, all the government-appointed default funds are sustainable, and a lot of retail investors assume that all KiwiSaver is,” says Stewart.
“Even in some of my travels abroad, I have met professionals who say, 'Isn't it amazing that your entire KiwiSaver in New Zealand has a mandated ethical overlay?’, and I have to tell them it’s the default funds only. So, there is a misconception out there.”
RI is embedded into Stewart Group’s fact/finding and discovery. Part of working through a client’s financial pathway is to ask whether they wish to express an ethical preference in how their capital is invested. Stewart says there have been some fence-sitters who, following Russia’s invasion of Ukraine and the Israel/Palestine conflict, opted to follow returns rather than an ethical preference.
“We don’t judge. If they want to seek additional return premium because of that exposure to that asset class, that is their choice.”
Clients sometimes express concerns
about greenwashing, as was the case when ASIC’s (Australian Investments & Securities Commission) prosecution of Mercer hit the news.
“We share with them the process and methodology of how we select the funds, the fund managers we work with and the stewardship reports produced by each provider.”
Stewart Group has a full ESG suite across properties, equities and fixed income. The approved product list for advisers who are part of the FAP (Financial Advice Provider) covers nine global, including Dimensional Funds and Vanguard and two New Zealand funds managers: Kernel and Smartshares.
Stewart says RI performance has been on the benchmark, with little difference (around a couple of basis points) between model classic portfolios.
“We’re happy with the premiums we’ve captured. At the short end there is a little bit of noise, but at three, five and 10 years, the numbers are very similar.”
For those interested in climate change, it’s too early to tell if fund managers’ climate reports are of use to advisers and investors.
“This is the first iteration: almost like a mock exam, and they’re not particularly data heavy. But the rubber meets the road in July next year. Also, climate is only one part of an ESG portfolio.” A
Australian Ethical is one of Australia’s original ethical investors. Since 1986, we have made ethics the starting point for all our investments.
As pioneers of ethical investing, we go deeper than mainstream environmental, social and governance (“ESG”) factors by applying a comprehensive set of ethical criteria. All our funds are screened for ethical and investment merits, with genuine regard fr business impacts on people, planet and animals. We also operate in the New Zealand market and with the popularity of the sector gaining fast momentum, authenticity and transparency have never been more important.
What does 'ethical' mean to Australian Ethical?
Australian Ethical was founded around a clear and transparent set of principles for people, planet and animals. Our Ethical Charter sets out 12 positive things that we want to see more of in the world – such as protecting human rights, eco-systems, and animal welfare – and 11 harms we want to see reduced – such as weapons manufacture and poor working conditions.
We consider these ethical priorities in everything we do – in our investment activities, and in the way we operate our business and treat our people.
Our in-house ethics team looks in depth at what businesses do (their activities) as well as how they do business (operations), and all their activities along the value chain.
Every investment Australian Ethical makes has gone through this comprehensive and detailed evaluation to make it into our investible universe. When we enter into arrangements with other specialist investment managers, we make sure their process for selecting companies to invest in meets our own high standards.
Does your ethical process make your portfolios look different?
Relative to the Benchmark1, our listed share portfolios have multiple times the level of investment in sustainable solutions like healthcare, water supply and pollution prevention, and far less exposure to unsustainable consumption and extractive industries.
Our listed share portfolios have more than four times the investment in renewables and energy solutions compared to the Benchmark and less than a quarter of the emissions.2
This future-focused philosophy permeates across the wide range of ethical investment options in our portfolios – from fixed income to multiasset, systematic and active equity capability as well as private markets.
Does choosing an ethical manager mean you need to forgo investment returns?
Not in our view, and our investment performance is evidence of this. We have what’s called a dual purpose –to invest ethically, as guided by our Ethical Charter, as well as to optimise investment returns. This is possible, not only because we believe we can make a difference to the planet, but also because we think it’s a compelling investment case.
We have a high degree of conviction in critical issues such as climate change, housing affordability, diversity and equity considerations. In my view these aren’t cyclical trends but will continue to grow in importance over the years to come.
So, it’s no surprise we find ourselves at the forefront of the energy transition, the great mega-trend of our time, reshaping our societies and financial markets.
We are using our capital and our influence to invest in new technologies and accelerate a move away from the emissions-intensive energy sources the world has relied on in the past.
How does your ethical process differentiate you from other investment managers?
These days every investment manager wants to say that they consider environmental and social issues.
What they are less upfront about is, that this consideration is limited to whether it helps them make a profit.
If an environmental or social issue can hurt the bottom line of an investment, they may adjust their valuation to account for it. But that's where ESG stops. It’s enlightened self-interest at best.
Australian Ethical is a values-based investor. We take environmental and social issues into account in every case. Our approach includes absolutes, like not investing in weapons manufacture or tobacco production. For investments that get past this first hurdle, the question becomes, "is there a net positive for people, planet and animals in this activity?"
How do you make a difference, beyond how you allocate capital?
Allocating our capital in a way that is aligned with our Ethical Charter is important, it’s critical, but it’s a minimum requirement and not an end point – we don’t stop there.
By achieving strong ethical and financial performance, we hope to be trusted by more customers, and also emulated by more peers.
We want ethical investing to grow to the point where environmental and social performance matters as much as financial performance does; where each business is valued based, not only on its financial contribution to shareholders, but for its environmental and social contribution to all stakeholders –customers and host communities, employees, and staff all along the supply chain, non-human animals, and ecosystems both impacted and relied upon.
We recognise that as investors, we are relatively more empowered than most of those stakeholders, we can open doors that are closed to them. So, we use our position as investors to seek positive
change on their behalf, to hold companies to account for their ethical performance and to agitate for better. This means being vocal at times.
What are some recent examples of how you've been vocal?
You can see this in our recent engagement with Boral, a building materials company. We spoke to the company in private, but we were also public about our concerns in our open letter and in the media.
We had invested in Boral based on the company setting strong carbon targets. But when Boral went back on these commitments, we had to speak out about our concerns not just for the planet, but for the company.
It's easy to give in to short term pressures, it’s easy to focus on this year’s executive KPI at the expense of building a business that can succeed in the long term. That is why companies need to hear
‘We want ethical investing to grow to the point where environmental and social performance matters as much as financial performance does.’
Alison George
from their investors that they want them to stay the course of sustainable value creation. As in many other cases, with Boral we rallied other investors to join us and amplify our calls for better.
Aren’t you worried that collaborating with other asset managers will erode your unique position on these issues?
We care about the outcome, and ultimately, we think customers will recognise those that consistently lead. We collaborate wherever we can find common ground.
Last year we directly and pro-actively pursued more than 65 engagements for change. When you add in collaboration, that number grows to more than 250.
A lot of asset managers publish engagement statistics, is this a good way to judge the authenticity of an ethical fund in your view?
Activity numbers relating to engagement activity aren’t enough to
know we are making a difference. We go further to hold ourselves to account and pursue the real-world change at the heart of our mission.
But pursuing real change can take time – most engagements run for multiple years. So we publish our plans for engagement, our ultimate objectives, and the activities we intend to undertake to get there. We then annually report back on what we did and what progress we saw – and we do see progress year on year.
Around a quarter of our proactive engagements saw some positive change in the most recent year. If we don’t see change, we are honest about that too and what we are changing to do better in the future.
Do you have any recent examples of these engagements and the progress you’ve made?
Our banking engagement is an example of this. We restrict+ our investment in fossil fuel companies because we don’t see them having a role in the net zero future. While the ones we choose to avoid are out of our portfolios, the problem still remains.
We know that new dirty energy projects can’t be developed if we are to avoid dangerous climate change. We also know those projects won’t be developed if no one will lend to them. Our goal is to see the banks withdraw lending from fossil fuels that are misaligned with global climate goals.
Over the last few years, the climate proposals we helped put on bank AGM agendas had received dwindling investor support. So, we stopped and reviewed. We spoke to as many of those investors as we could, teased out their concerns and found common ground.
As a result, we were able to author proposals that furthered our objectives
while also being palatable to our peers and the change was dramatic for the two banks we were active on. There was four-times the level of support for our asks of NAB over the prior year3. We also doubled investor support for our calls for Westpac to apply its climate standards more broadly.
Holding ourselves to account not just for activity, but for outcomes is key to our achievement of influence.
We’re living in the time of the ‘conscious consumer’, during a boom of ethical investing. What do you believe consumers expect from businesses and for-purpose organisations in 2024?
I think consumers want to know who they can trust. Transparency is fundamental, but it still leaves the work of evaluation to do. Each of us has a limited capacity to put into scrutinising the claims of others. It's exhausting to live in the modern world and try to be an ethical person too.
This is where certifications like B Corp are helpful.
To be a certified B (benefit for all) corporation, you must meet high standards of social & environmental performance, transparency & accountability, and be a force for change towards a more sustainable future for the environment and people. Because it is a rigorous, comprehensive standard for sustainable business, once you understand what that certification means you can trust it in all the places that you see it.
As well as being certified ourselves we consider B Corp status in our supplier relationships. Australian Ethical was the first listed B Corp in Australia in 2014 and is currently the highest scoring B-corp in Australia & New Zealand. A
Nikko AM’s new multi-manager GoalsGetter scheme answers advisers’ call for tailored, diversified KiwiSaver solutions.
BY SAM BRYDEN, HEAD OF DISTRIBUTION, NIKKO
AM
With over three million members, it’s fair to say that most New Zealanders now see KiwiSaver as integral to their retirement plan. But I also think it’s fair to say that, to-date, most schemes have lacked the investment options that cater for the diversity reflected across three-fifths of our total population.
Comprising members of all ages, lifestages, professions, personal situations and incomes, KiwiSaver can’t effectively operate as a one-size-fits-all investment scheme. This is something many of you have been pointing out for some time now as you’ve been calling for greater innovation and flexibility. We agree with you that it’s important that the diversity of its participants is reflected in the tailored, diversified solutions available to them. This is why we’ve taken action with a significant enhancement of our product.
Our new GoalsGetter KiwiSaver scheme – which has effectively replaced the Nikko AM KiwiSaver scheme – comprises a diversified mix of 18 high-calibre funds from six of New Zealand’s leading fund managers: Generate, Harbour, Milford, Pathfinder, Salt and (of course) Nikko AM. These funds have been hand-picked by our own vastly experienced investment team, with further due diligence undertaken by MyFiduciary and our own Portfolio Solutions Group based in Singapore. By initially limiting the fund selection to these 18 high-quality funds, we’ve designed the scheme to simultaneously solve the conundrum of too little and too much choice. Through this, and an adviser-first approach, we’re now able to provide the opportunity for you to efficiently build quality diversified portfolios for your clients, with funds from managers you know and trust, weighted together in a way that matches
their unique KiwiSaver profile and strategy.
Not only have we designed the new scheme around the core GoalsGetter brand tenets of knowledge, innovation, diversification and personalisation, we’ve invested heavily in the financial adviser functionality of the platform to deliver you and your clients a streamlined, fullydigital experience from onboarding to tracking performance and transacting.
For you as advisers, this includes embedding a 20bp advice and servicing fee for you within the fund fee in the PDS, with the facility to add an additional 30bp fee on top of this at your discretion.
We strongly believe the ability to provide personalised solutions through a multi-manager approach is the future of KiwiSaver. This is more than just a hunch. You only need to look to the more mature retirement scheme markets of Australia or the UK, which are multi-manager by nature, to recognise this is the way forward.
Not only do multi-manager schemes offer investment diversification, they mitigate the risk associated with exposure to a single manager. With our tailored GoalsGetter KiwiSaver scheme, we’ve embedded further risk mitigation through our manager and fund preselection process.
Below you’ll see a full list of the funds (and their target asset allocations as at 6th May 2024) we’ve handpicked to make it easy for you to support your personal commitment to your clients with a personalised solution for their KiwiSaver needs.
If you’re looking to future-proof your KiwiSaver business, we encourage you to get in touch with the GoalsGetter team to discuss how easy it is to become accredited to ensure your clients can benefit from the personalised, tailored solutions we all deserve.
• Generate Focused Growth Fund (95% Growth; 5% Income)
• Harbour Active Growth Fund (65% Growth; 30% Income; 5% Other)
• Milford Active Growth Fund (78% Growth; 22% Income)
• Nikko AM Growth Fund (78% Growth; 17% Income; 5% Other)
• Pathfinder Ethical Growth Fund (66.8% Growth; 28.2% Income; 5% Other)
• Salt Sustainable Growth Fund (80% Growth; 20% Income)
GoalsGetter Balanced Funds
• Generate Balanced Fund (60% Growth; 40% Income)
• Harbour Sustainable Impact Fund (55% Growth; 27.5% Income; 17.5% Other)
• Milford Balanced Fund (61% Growth; 39% Income)
• Nikko AM Balanced Fund (59% Growth; 36% Income; 5% Other)
GoalsGetter Conservative Funds
• Milford Conservative Fund (18% Growth; 82% Income)
• Nikko AM Conservative Fund (23% Growth; 77% Income)
GoalsGetter Other Funds
• Generate Thematic Fund (98% Growth; 2% Income)
• Nikko AM NZ Cash Fund (100% Income)
• Nikko AM Corporate Bond Fund (100% Income)
• Nikko AM SRI Equity Fund (100% Growth)
• Nikko AM Global Shares Fund (100% Growth)
• Nikko AM ARK Disruptive Innovation Fund (100% Growth)
GoalsGetter enables you to build diversified portfolios tailored to meet your client’s personalised investment goals. Our fully digital platform simplifies every aspect of the investment journey for you and your client. Get in touch with the GoalsGetter team now to learn more.
Choose funds from these leading New Zealand Fund Managers.
Invest and grow NZ innovationat the same time
Investor appetite for responsibly managed funds is strong and growing. Besides looking at risk, fees and returns, many people also consider how they feel about what they are invested in.
BOOSTER
Mindful Money’s 2023 surveyi found 74% of people already expect that their KiwiSaver or investment fund is being managed ethically and responsibly.
Financial Services company Booster was the first provider to have its responsible KiwiSaver investments certified by the Responsible Association of Australasia (RIAA) in 2015.
“We were early adopters of Socially Responsible Investment (SRI) funds because we could see people wanted an option to ‘put their money where their mouth is’ on ethical investment,” says Chief Customer Officer Diana Papadopoulos.
“The SRI funds are popular, and we’ve seen consistent growth in the number of members over the last five years and some good performance. Over the last 10 years (up to 30 June 2024) for example, the Booster KiwiSaver Scheme SR Balanced fund had returns of 7.1% per annum compared with the average returns of 6.6% p.a. across peer (SRI and non-SRI) KiwiSaver funds that we compare that fund to.
Booster has a baseline ban across most of its funds on investments in companies undertaking the production, supply or stockpiling of biological, chemical and nuclear weapons, or the production of tobacco. It also assesses and weights environment, social and governance (ESG) factors such as resource use, ethics and board independence across directly managed listed share investments.
“Our SRI funds exclude directly held investments in companies undertaking certain activities* in a range of industries such as alcoholic beverages, gambling, fossil fuels, civilian firearms and palm oil production among others, where the amount of revenue earned by a company from those activities exceeds a certain
threshold” says Diana Papadopoulos.
It’s clear there is a lot of demand for investments that stay away from certain industries but there is also very high interest in investments that go further and do obvious good. The Mindful Money survey found 80% of people are willing to invest in a fund that aims to create positive impact, up from 69% in 2022.
“Our Booster Innovation Fund (BIF) ticks a lot of the boxes for this kind of investment. It invests in research and technology companies that can potentially have a really positive effect in areas like health and the environment, including tech that can help with climate change and decarbonisation,” says Papadopoulos.
BIF so far has investments in over 30 companies in its portfolio. They span many industries with several developing climate tech or health tech solutions underpinned by science disciplines including biotechnology, chemistry, physics, materials science, and machine learning. Papadopoulos says the portfolio approach of investing across seed/early stage/expansion stages of business helps spreads the risk. This is important as early-stage company investing is inherently high-risk.
“The BIF businesses include exciting innovations that are being commercialised like new energy solutions to advance electrification, solutions to improve food security and supply, including one business that uses UV light to improve crop plant growth and disease resistance. Another company is enabling the parts of construction industry to move towards a circular economy and while others are deeply focused on developing their medical technologies to fight cancer.
“All of the BIF companies have fantastic potential, and at Booster we’re very aware of the constraints that a modest
venture capital market in New Zealand puts on business growth. This means that many start-ups look for overseas investment to help them expand their business into new markets.
“So, by injecting New Zealand capital into these start-ups, it helps them to stay Kiwi-owned for longer, helping keep high value jobs and intellectual property here, and that can only be a good thing,” says Papadopoulos.
BIF aims to outperform the NZX 50 index over rolling 15-year periods and people can buy units directly through Booster with as little as $1,000, through their financial advisor or from the NZX at ticker code BIF.
Most Booster KiwiSaver scheme funds also invest a small portion into BIF – so Booster KiwiSaver Scheme members, may already be investing in exciting young start-ups just by saving for their retirement.
You can find out more about BIF investments here:
On Booster website https://www. booster.co.nz/products-services/ booster-investments/boosterinnovation-fund or NZX https://www.nzx.com/ companies/BIF
*See more on Booster’s approach to responsible investing here: https://www. booster.co.nz/products-services/ethicalinvesting
i https://mindfulmoney.nz/learn/ annual-report-2022-2023/ A
The Booster Innovation Fund (fund) is part of the Booster Innovation Scheme which is issued and managed by Booster Investment Management Ltd (Booster). The fund’s Product Disclosure Statement is available at www.booster.co.nz.
David van Schaardenburg traces the journey of the adviser industry – from the wild West of the 1980s to the golden age of today.
The New Zealand Listener is doing a series of articles on the events of 40 years ago in mid-1984.
Their focus is on the sudden change of the economic-policy direction the two major parties had pursued over the prior 50 years - and the subsequent winners and losers from that period of economic turmoil.
Having lived and worked in the money markets at the time (showing my age!), I recall how the Lange/Douglas Labour Government started to unwind many decades of regulation and protectionism.
The Listener series has made me reflect on just how much New Zealand’s financial advisory and investment management industries have radically changed in the last four decades. And how much they have not.
My reflections on both change and continuity in these industries have also been stimulated by the sessions at the recent Financial Advice New Zealand roadshow and Heathcote adviser retreat that I’ve attended.
What was the advice industry like in the mid-1980s?
In 1984, there was no independent, financial-advice industry. If you worked as a ‘financial-products salesperson,’ you were either a commission-based, tied agent with one insurer, a salaried employee of a bank, or a stockbroker who was remunerated based on the amount of asset turnover you stimulated your clients to transact.
Client-centric regulations, documentation of advice, and being
subject to audits by a central authority were non-existent and not on anybody’s horizon.
Hence the most successful ‘advisers’ in the wider financial-services sector were those who were great salespersons.
Many had come from a sales background in unrelated industries.
Selling your ideas, convincing people to buy financial products that had high upfront and ongoing fees – which could pay the ‘adviser’ high commissions – was the key to success. How the client fared was their problem.
The key limitation for any adviser was building relevance and trust with prospective clients, who often had limited financial knowledge. But even if they were knowledgeable, the limited information available to them was suspect in many ways.
From 1982-87, the New Zealand sharemarket rose round 600%.
If you were a fund manager, you’d be employed by a Wellingtonheadquartered life-insurer (Australian or UK-owned) or by one of the NZX-listed investment companies.
A good chunk of your funds under management came from personal and company-sponsored superannuation schemes, where the client was locked in till a designated retirement age (typically 55 or 60).
Disclosures with respect to fees, portfolio composition, and the fund’s degree of risk were modest and inconsistent, with no government agency regulating these.
Chunks of your portfolios were required to be invested in New Zealand government bonds.
For your shares allocation, the perception of your capabilities was based on whether or not you could beat the return of the New Zealand sharemarket (the Barclays index).
For some this wasn’t too hard to do. Listed companies were keen to keep the broking community onside, so would regularly provide them with price-sensitive inside scoops, allowing the broker’s favourite fund managers to transact ahead of the market.
Retail investors would hear such news only via the newspaper the next morning. Fund managers also received preferential allocations to the hottest company ‘floats’ - both for their funds and for the fund manager personally. With the absence of regulations or laws forbidding such large information arbitrage, it’s no surprise that insider trading was the norm not the exception.
The New Zealand sharemarket delivered great returns during much of the 1980s. So there wasn’t much desire to invest offshore, outside modest allocations to Australia.
In any case, listed conglomerates such as Brierley’s and Fletcher Challenge were smarter at investing globally, so investors could do it through them.
By the time we reached the end of the decade, superannuation schemes and many individual investors had the majority of their portfolios and wealth invested in New Zealand listed shares and bonds, with many of the former’s share prices based on questionable financial statements.
‘Listed companies were keen to keep the broking community onside, so would regularly provide them with price-sensitive inside scoops’
Post the 1987 sharemarket crash, we saw how the lack of industry oversight, regulations and professionalism negatively impacted on investors’ wealth.
The wounds remained a source of pain for decades.
Moving along 40 years, we have a transformed industry landscape. Funds management has globalised.
New Zealanders have more of their financial wealth allocated to growth investment, primarily via KiwSaver, and more allocated to the US than New Zealand.
The Financial Markets Conduct Act 2013 (FMCA) and NZX reforms have markedly improved the quantum, quality and timeliness of information to investors both professional and amateur.
Funds managers or sharebrokers no longer have an information arbitrage. Fees are markedly lower, understandable and comparable.
FMCA part 2 has also materially improved the quality of financialadvice businesses, and will push the consolidation of advice in professional corporations.
Making the use of a financial adviser ‘normal’, accessible and affordable remains economically difficult, given the high costs of regulatory compliance and the lack of scale in much of the advice industry.
Technology improvements and advice business consolidation hopefully will help address this, as long as further regulatory imposts don’t develop faster.
Ensuring the public knows the difference between a financial adviser and an employed fund salesperson has yet to be addressed.
Notwithstanding this, and as evidenced
in recent adviser forums I have attended, a vibrant and experienced independent financial-adviser industry is flourishing in the golden age of the baby boomers retirement transition. A
David van Schaardenburg is independent of any investment provider and is CEO of the Ignite Adviser Network, which provides advice to over 15,000 investment clients.
Your first FMA monitoring visit is likely to be challenging. Russell Hutchinson explains what’s involved and how you can prepare for it.
Amajor tool the Financial Markets Authority (FMA) uses to ensure compliance by financial advice providers (FAPs) is the monitoring visit.
Several significant adviser businesses are going through, or have recently been through, the monitoring-visit process, and more recently the FMA published the first monitoring-insights report, based on the first 60 monitoring visits it has completed.
To give you a feel for what may happen, in this column we will summarise feedback from advisers we have spoken to about the process.
We strongly recommend you review the FMA’s recent insights report as well: https://www.fma.govt.nz/news/
all-releases/media-releases/fapmonitoring-insights-report/
Initially, we took a ‘black hat’ approach, expecting the process to be more rigorous and tougher than most insurance or compliance staff anticipated.
However, even the most pessimistic among us were surprised by the extent of the monitoring. The process was more extensive than we expected - definitely at the tougher end of expectations.
What triggers a visit?
The fundamental driver of monitoring visits is being licensed as an FAP.
The FMA has stated that monitoring would be guided by risk assessments. There is general information about what
constitutes risk, and we think the FMA’s view may change over time.
So, the frequency with which one entity is reviewed may be different to another.
Looking at how often one Authorised Financial Adviser (AFA) was reviewed - annually for five years - we think ‘risk’ can be influenced by other factors: complaints is one candidate. Complaints to the FMA are often made by other advisers.
But whatever the criteria, we think the FMA will continue to adjust selection methods in light of their experience, and already fine-tune what a monitoring visit means, depending on the scope of the business, and new concepts such as outcomes-based regulation.
Here are some frequently asked questions based on feedback from the advisers we have been talking with about their monitoring visits:
What’s in the initial information request?
The initial information request is extensive and includes a wide range of policy documents, training materials, process and procedure documents.
The presence of good process documents helps the FMA assess the intention of the FAP to meet licence obligations. The extent to which they are implemented will be the subject of the review.
How much time will that take to provide?
That depends on how ready you are. One reasonably well-organised advice business told us it took two staff the best part of two working weeks to identify and
supply all the documents. What flexibility can you expect?
You can expect about three weeks to furnish the FMA with the documents initially requested.
We are aware that two FAPs have given the FMA access to its customer database as a method of meeting the requirements.
The FMA will expect that you can meet the initial information request within the period given, although you can ask for an extension; they may be concerned about how the FAP operates in normal conditions if much of the required data is not available.
How many monitoring visits will the FMA do in a year?
Based on adviser questions at events where Michael Hewes, the director for deposit-taking, insurance and advice, was
answering, it is likely that between 30 and 60 FAPs will receive monitoring visits each year.
The variance as a proportion of the total is large, because a general standard of practice has not yet been established. Some visits may take significantly longer than others.
Will you get asked for additional information or evidence?
A common piece of feedback was that the initial supply of documents, and subsequent interviews, generated additional requests for further information.
Sometimes demonstrations were required: for example, recordings of training sessions and a demonstration of how two-factor authentication operated were additional items of evidence
‘Even the most pessimistic among us were surprised by the extent of the monitoring’
required for stated processes. What about elapsed time taken for the whole process?
From the initial information request to receiving a letter from the FMA with feedback on the result of the monitoring visit, the process can take between three and six months.
Will all FAPs get reviewed?
When asked, the FMA states that they will. But with 1,510 FAPs at the time of writing, even at 60 FAPs per year, it would take just over 25 years for every FAP to receive a visit.
Since the average life of an FAP is likely to be shorter than 25 years, that naturally means that either some will not receive a monitoring visit, or the rate of visits will increase.
We think every FAP will find the first monitoring visit challenging. It could be a very positive experience or a very difficult one, depending on your level of preparedness, attitude and your willingness to see this as a learning opportunity.
It will shape adviser-business attitudes to risk in the medium term.
Two areas where we think monitoring
Will they interview staff?
Yes, interviews are a substantial part of the process. The FMA will request interviews with any staff and advisers they would like to see.
Many of those interviews will be held without the directors of the FAP present. You should expect that a substantial number of hours will be spent in interviews.
What are the rules for when the FMA is in your office?
They will require some interview facilities. They will decline offers of hospitality.
What are their expectations for client files?
Succinctly, “The file should speak for itself.” This means that if a file needs to
be explained to the FMA, the record is probably, in some way, deficient. Are there any areas of particular focus you can expect?
Replacement business is highly likely to be an area of specific focus. The reasons for replacement business and the methods used to handle replacement advice are likely to be especially important. You should first look for solutions with the current insurer – and if you chose not to, why not?
Another area of interest is advice scope exclusion: why was an area or product or option left out? This is very often a reflection of the fact that something is missing from the file. It is about how the advice moved from initial client goals to implemented advice.
will shape FMA attitudes are feedback into guidance, and the use of complaints as an input to the risk assessment for selecting which FAPs will undergo monitoring visits.
If an adviser is so risky that they must be reviewed annually, we suspect this is a problem which will eventually be tackled in another way, perhaps after several successive reviews: perhaps new guidance, or increasing requirements to rectify aspects of their process, leading perhaps to further action.
If a complaint is what triggers an investigation, this can impose very high costs on a business that is reviewed.
We expect that as the FMA’s modelling of risk develops, the role of complaints may evolve.
If you are contemplating complaining about a competing adviser business, perhaps sparked by the loss of a case, we suggest you take your time with that decision: ask not for whom the bell tolls. A
Returns are calculated to 31/08/24. Returns are calculated before tax, after fees, except for the non-PIE categories, which are after tax and after fees.
For more information about this table and the methodology behind the data, contact helpdesk.nz@morningstar.com or go to www.morningstar.com.au
© 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. To the extent that any of this information constitutes advice, it is general advice and has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Limited (subsidiaries of Morningstar, Inc.) without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement (in respect of Australian products) or Investment Statement (in respect of New Zealand products) before making any decision to invest. Neither Morningstar, nor Morningstar’s subsidiaries, nor Morningstar’s employees can provide you with personalised financial advice. To obtain advice tailored to your particular circumstances, please contact a professional financial adviser. Please refer to our Financial Services Guide (FSG) for more information www.morningstar.com.au/
As usual it has been a busy month on Good Returns Here is a list of the top 10 most read stories over recent weeks.
01 Top five KiwiSaver providers continue marketshare jostle
KiwiSaver assets rose $3.5 billion to $110.8b at the end of the June quarter, up $13.3b from the same quarter last year.
02 FMA sues Booster over wine investments
The Financial Markets Authority (FMA) says it has launched civil proceedings against Booster Investment Management (BMIL) and five named individuals, alleging law breaches in investments in wine businesses.
03 Two KiwiSaver schemes report larger losses but make revenue gains
Two of the newer KiwiSaver schemes chalked up larger losses in their latest financial year.
04 ASB CEO talks compulsion, contribution and PE in KiwiSaver
ASB CEO Vittoria Shortt would like to see change when it comes to KiwiSaver policy, and is interested in developing the product.
05 Castle Point sold
Boutique fund manager Castle Point, established by a group of former Tower fund managers, has been sold.
06 Are trauma products still fit-for-purpose?
Steve Wright suggests it’s time to rethink trauma policies so they are more equitable, rather providing windfall gains to some policyholders.
07 How climate friendly are KiwiSaver schemes?
Most KiwiSaver providers have filed their firstever climate reports which detail the emissions from their investments.
Consilium cracks milestone
Consilium’s KiwiWRAP KiwiSaver Scheme has cracked a milestone - and has impressive client balances.
09 Graeme Lindsay: death of a life-industry stalwart
Graeme Lindsay's professional life in the insurance industry was bookended by brushes with cancer.
10 New chapter for Fisher Funds
New chief executive Simon Power has made changes to Fisher Funds' exec team.
The judges were impressed by their significant contribution to the establishment and growth of companies in their portfolio, through providing climate expertise, impact measurement and commercial advice.They are also playing a crucial role in building a stronger climate solutions sector in New
The judges commended Australian Ethical on the way it has embedded ethical investing across its business and investment processes. The judges particularly welcomed their reporting on the outcome of stewardship engagements, and the clear processes leading to divestment where sufficient change is not achieved.
al KiwiSaver & Investment People’s Ethical Choice Winner Pathfinder Asset
The judges congratulated Pathfinder for its leadership. They recognised that Pathfinder is committed to ethical investing across all aspects of their work, including avoiding harmful investments, engaging with companies and driving down climate emissions. The judges particularly welcomed Pathfinder’s increased investment in sustainable themes, such as renewable energy, and in positive impact companies.
edia Reporting on Ethical ment 2024
The judges were impressed by the leading role that Eloise has played in reporting on climate change, and especially her project to rate climate action by New Zealand’s largest companies, using an innovative scorecard system and visual storytelling. The reporting outcomes included its position on the Stuff homepage and feedback from companies wanting to improve their score in future rankings.
themes. They noted that Artesian has a strong framework for measurement and reporting.
companies they invest in. The judges also acknowledged the importance of their collaborative processes, and the catalytic role that Purpose Capital plays in attracting other institutional funding.
Sponsored by:
The judges commended Moneyworks for integrating ethical issues throughout their client advice processes. They have a thorough and comprehensive approach to matching investment portfolios to client preferences, with innovative use of technology. They demonstrate a strong commitment to ethical investing, as shown by their B-Corp certification.
Mindful Money is a charity, providing transparency on fund holdings. We provide information for free, but welcome contributions towards our costs, especially from those using information as part of their service offering.
Mindful Money offers a portfolio screening service for Advisers with analysis of AUTs, global funds and bespoke fund portfolios. Other services include research on ethical issues, positive impact investing and climate change.
Contact Kate Vennell, kate@mindfulmoney.nz
Minimum investment of $100,000 Wholesale investors only
No costs or fees deducted Returns are pre-tax
Finbase provides private investors, family offices and high net worth individuals who meet relevant wholesale investor criteria an investment backed by First Mortgage Security.
Investor security:
Funds are utilised to provide First ranking mortgages to commercial borrowers for the purposes of short term property projects, maximum 12 month term of any loan.
Maximum lending of 60% of property value.
Security description: Large residential home, on circa 740m² freehold section
iValuation: $1,330,000
Interest rate: 11%p.a. paid monthly in arrears
Purpose of funds: Working capital to be used in borrower’s business
Exit strategy: Refinance to a main
with FY25 financials
Recently funded investments: For investment opportunities contact our portfolio managers:
Security description: Circa 820 hectares of freehold land
Purchase price : $2,000,000
Interest rate: 11%p.a. paid monthly in arrears
Purpose of funds: Subdividing the property into separate sites
Exit strategy: Sale of one of the sites once subdivided
Finbase is proud to have never missed an investor interest payment nor suffered a single loss of investor capital.
Security description: Four bedroom home, located on circa 340m² freehold land
CV: $2,090,000
Interest rate: 11%p.a. paid monthly in arrears
Purpose of funds: Refinancing an existing loan, plus a top up to clear some business debt
Exit strategy: Borrower will repay the debt, using cash flow from their business
We will cover your legal and accounting fees of up to $2,500 to discuss this investment opportunity with your professional advisors, with no obligation for you to invest after doing so.*
