Financial Advice

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swisshardy

69 posts

Master Geek

#195740 2-May-2016 12:20

Hi Guys

I have about 30k that i would like to invest in either shares or investments, fixed term deposit for medium term. Does anyone know either a good financial advisor who could help me decides whats best to invest in or anyone has some suggestions on good investments?

Thanks

Harry

michaelmurfy

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#1545298 2-May-2016 12:23

What bank are you with? ANZ have some QFE's (qualified financial advisers) available on 0800 269 238 that can assist you.

MikeAqua

5805 posts

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#1545323 2-May-2016 12:46

Try and get some independent advice. And do you research on investment funds sold by banks.

Often they are an external investment fund which the bank is on selling with a margin and are not guaranteed deposits.

Mike

Bibbidybob

16 posts

Geek

#1545326 2-May-2016 12:49

I can't make any recommendations, but I can suggest doing your due diligence. Currently there are 3 types of financial advisers in NZ - QFE (Qualifying Financial Entity) advisers, Registered Financial Advisers (RFAs), and Authorised Financial Advisers.

QFE advisers are arquably the least regulated and useful - they are not individually registered and instead rely on their employer/company being granted QFE status. They are only allowed to offer advice on their own financial products - they are really salespeople, such as for banks. They will talk you through the financial products their employer (say, the bank) has, and try to find which is best for you from their selection.

RFAs are also mostly salespeople. They are individually registered and can offer advice across a range of products from different providers, but mostly deal with selling insurance policies or finance/mortgage broking.

AFAs are individually registered, regulated by the FMA, have CPD requirements and must hold an appropriate qualification. They can provide advice and financial planning on a range of products from a range of providers, including investment advice.

If I were in your position I would want an AFA. Check they are registered on the Financial Service Providers Register (www.fspr.govt.nz) and that they hold membership of an External Dispute Resolution scheme. Make sure you're aware of their fee structure - is it fee for service, or free to you as they receive commission? Do they have a clause that allows for them to claim commission off you if you cancel a product within a clawback period, or a clause that would allow them to charge a fee.

jmh

458 posts

Ultimate Geek

#1545345 2-May-2016 12:56

At the present time, I personally would be putting that into a fixed term interest bearing account for at least a year. While investing in the stock market is not a bad idea, it is generally considered that the market is over valued at the moment and due for a correction (some say a crash). You can then use this year to educated yourself about the options out there. I've been quite surprised to discover that some fund managers achieve as little as 2% growth, which is less than you can get at Kiwibank on a fixed term deposit right now. Once the market falls back, you can look at investing when stock prices are lower. You also need to take into account dividends values.

MikeAqua

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#1545364 2-May-2016 13:19

And of course at every turn ask yourself - "What would Bobby Axelrod do?"

Mike

Geektastic

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#1545396 2-May-2016 14:35

Yes I do know one, based in Wellington. PM if you want his details.

BlinkyBill

957 posts

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#1545397 2-May-2016 14:43

Depends on what you mean by 'medium term'. And what is your risk profile - can you afford to take a loss to make a larger gain? Or do you want to retain capital and make a smaller gain? What is your debt like, and how do you want your debt levels to be at the end of the 'medium term'?

Do you have plans for the money at the end of the 'medium term'?

More information across those dimensions will be required to provide proper advice - which should be provided by an independent and qualified advisor.

BlinkyBill

afe66

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#1545532 2-May-2016 18:59

By medium term, I imagine your looking at more than 5 years.

Do you have a house/mortage in which case you need a return that beats your mortage rate by up to 33% to get a better return than reducing the principal on your mortgage.

I like passive index funds and have had a savings plan with monthly investing for last 10 years, not exciting but nzX fonz has been returning 4-5% for me for most of that time and I'm happy to stay with them. (their unit price has risen by 10% in the last 3 months for some reason) There is also PIE option so I only pay 28% tax which helps the yield.

I'm prepared to punt that with ongoing low interest rates people are going to look for other places to invest, one of which will be shares. Bonds are another option.

If like the other poster the share market drops well the shares I buy at lower unit cost will offset things over the longer term when share market cycles back up.

Like others above, I would pay for good advice rather than ask our individual opinions.

surfisup1000

4740 posts

Uber Geek

#1545556 2-May-2016 19:45

Personally, I prefer passive (index trackers) funds for less than 100k.

This really irritates the active fund managers as it effectively means their skills and training and expertise are for naught (from the clients perspective ). Warren Buffett won a bet against some guy by putting his money into an index fund.

More than 100k....just buy a random spread of 20+ stocks putting an equal sum into each. Balance them out each year as some go up , some down.

Also, you may be inadvertently getting us to all break the law by giving you advice. Not totally sure on this, but anyone giving financial advice in NZ must be certified to do so. So, everyone who answers you has now broken the law? I'm not sure :)

[edit] Warren buffetts bet....

http://www.cnbc.com/2016/02/16/warren-buffett-slips-but-still-winning-epic-hedge-fund-bet.html

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#1545560 2-May-2016 19:50

Bibbidybob:

If I were in your position I would want an AFA. Check they are registered on the Financial Service Providers Register (www.fspr.govt.nz) and that they hold membership of an External Dispute Resolution scheme. Make sure you're aware of their fee structure - is it fee for service, or free to you as they receive commission? Do they have a clause that allows for them to claim commission off you if you cancel a product within a clawback period, or a clause that would allow them to charge a fee.

Unfortunately the OP may have difficulty finding an AFA that would want a client with that size investment.

Bibbidybob

16 posts

Geek

#1545921 3-May-2016 11:49

logo:

Bibbidybob:

If I were in your position I would want an AFA. Check they are registered on the Financial Service Providers Register (www.fspr.govt.nz) and that they hold membership of an External Dispute Resolution scheme. Make sure you're aware of their fee structure - is it fee for service, or free to you as they receive commission? Do they have a clause that allows for them to claim commission off you if you cancel a product within a clawback period, or a clause that would allow them to charge a fee.

Unfortunately the OP may have difficulty finding an AFA that would want a client with that size investment.

I agree, which is unfortunate because the only investment product RFAs can advise on is a Bank Term Deposit, and you really need to know what you want and where you want it in advance before talking to a QFE adviser. I was assuming that the OP has other assets and could get a more comprehensive financial plan, rather than a plan for just the 30k in question.

swisshardy

69 posts

Master Geek

#1545981 3-May-2016 13:06

Hi Everyone

I think it would be better to consult an RFA or al least meet one and seek some financial advice. Thanks for everyone for their input though. Much appreciated.

mattwnz

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#1545999 3-May-2016 13:28

jmh: While investing in the stock market is not a bad idea, it is generally considered that the market is over valued at the moment and due for a correction (some say a crash). Once the market falls back, you can look at investing when stock prices are lower. You also need to take into account dividends values.

Haven't they also said that about the Auckland housing market for the last 5 or so years? The thing is with shares as an investment, people expect them to go and and down in cycles, but with housing, people seem to think they will never go down, and banks must also think this, as they often lend a high percentage of the market value..

MileHighKiwi

680 posts

Ultimate Geek

#1546057 3-May-2016 14:12

I know of some people getting very good returns (8-12%) by investing with Harmoney. You can choose what level of risk you want to take, from offering money to people with AAA credit ratings right down to the really dodgy sub-prime range. The person I know doing quite well is playing in the middle, credit ratings BB sort of thing.

Bibbidybob

16 posts

Geek

#1546059 3-May-2016 14:18

MileHighKiwi:

I know of some people getting very good returns (8-12%) by investing with Harmoney. You can choose what level of risk you want to take, from offering money to people with AAA credit ratings right down to the really dodgy sub-prime range. The person I know doing quite well is playing in the middle, credit ratings BB sort of thing.

Harmoney is an option if you're very risk tolerant - it's a reasonably new model and there isn't a secondary market yet. I have an account but I'm not looking to put any serious money into it until I can easily onsell notes before the loan is repaid. I also dislike their approach to rewriting loans - after a borrower has 3 months' history they may be able to effectively get a further loan amount. Harmoney fully pays out (and charges the commensurate fees to investors) the original loan, and then sets up a new, larger, loan.