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How Do We Go About Finding An Investment Adviser?

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Mary Holm
Mary Holm


We are two middle-aged women both with considerable wealth in term deposits (in excess of a million each). We both own our own homes (valued in excess of $1 million each).

I also have some money in managed funds and ASB perpetual shares and my friend owns a beach property. We do realize we are in a very fortunate position, but really do need some unbiased help.

We admit to being rather poor in investment knowledge and really would like some advice on independent advisers who can explain in user friendly terms and guide us through what seems like a financial minefield, without being patronizing and pushing their own causes.

Is there such a thing?


Mary Holm: I'll probably get into all sorts of trouble for saying this, but you are typical women - or extreme examples of typical women.

Research shows that women tend to make lower-risk investments than men. Accumulating more than a million dollars in term deposits - assuming they are in a bank - is the ultimate in low-risk investing.

And the trouble with low-risk investing is that you get lower average returns, which can make a big difference over the long term.

For example: $10,000 earning 2 per cent after tax, fees and inflation will grow to $18,100 over 30 years. At 6 per cent it would grow to $57,400 - more than three times as much.

You could argue that, if you've got million-dollar houses and million-dollar savings, you don't need higher returns. But if you had more savings I'm sure there are charities that would happily accept your donations.

Anyway, you are already aware that you could use some advice about investing. You may also be aware that every financial adviser in town would love to have you and your millions to play with - but wouldn't necessarily have your best interests at heart.

So how do you find a good adviser? You have to put some time into it - time that many people seem reluctant to spend.

I get too many letters from people who wish they had done more research before going with an adviser. It's really worth making the effort now. Here's how I suggest you go about it:

Ask friends and relatives for recommendations. If you don't come up with any, look through "Financial planners" in the Yellow Pages for ads that appeal to you.

But don't just go with someone because a friend recommends them. Friends aren't always astute judges.

Read the advice on the Consumers' Institute website, Click on "Money", then "Financial advisers" (under "Investments").

The advice includes good suggestions on what you should know about your financial situation before seeing an adviser.

Go to the Retirement Commission's website, Under "Investing" read "Paying your adviser" and print out the "Advice checklist". Under "Fees", print out the "Fees checklist".

[ED: or of course you can check out the Investing Guides]

When you visit potential advisers, take the two checklists with you. They contain straightforward questions, such as: "Will you receive any money from anyone other than me in connection with the advice you are giving me?"

Some people feel embarrassed asking such questions. But reading out a Retirement Commission checklist should make it much easier.

The checklists are quite demanding of advisers and their time. But they can be a good test of their willingness to be open and to put some effort into helping you. The sort of adviser you want should welcome the opportunity to show you how they operate.

By the way, men tend to make investment mistakes too - but different ones from women.


Mary Holm is the author of bestselling books on KiwiSaver and personal finance. She is also a highly praised seminar presenter. Her written advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following that advice. 

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