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LATEST NEWS
Investment advice pays off
Over the past 12 months, investors in many diversified managed funds have been delighted to receive double-digit returns (after fees, before tax). This is an exceptional result, especially compared with those investors who have been more narrowly focused only on higher-risk investments, such as property-based debentures yielding 6-10% (before tax), or lower-risk investments such as bank deposits at 5% (before tax).
Of course, human nature means that many of us tend to base our important decisions – especially those concerning money – entirely on emotion, rather than logic. But it is for exactly this reason that the objectivity and expertise of a competent independent financial planner needs to be sought.
Essentially, a financial planner helps identify and quantify a person’s financial objectives, and then helps them to achieve those goals. A financial planner will also construct a personal financial plan, covering a range of areas including some or all of the following: cash and debt management; tax planning; risk management (insurance); trusts and estate planning; investment planning; retirement planning.
An adviser can also assist an investor in accessing ‘wholesale’ funds, to which individual investors do not usually have access. Wholesale funds are those structured principally for professional investors (e.g. institutions and corporate investors), and the benefit of investing in them is the economies of scale they provide.
An example of such a product, to which advisers with The Portfolio Group* have access, is Private Portfolio Service (PPS) – a master trust (or ‘fund of funds’) comprising fourteen different sector funds, each available either as a unit trust or superannuation fund.
For maximum diversification, some of the PPS funds comprise two or three sub-funds managed by a range of several carefully selected fund managers from all over the world. The managers are selected by the PPS Investment Committee (in consultation with Mercer Investment Consulting), whose role is to provide advice on all investment decisions relating to PPS.
The performance of the PPS funds over the twelve months to 31 March 2004 has been very strong. For example, the PPS International Equities Fund has a six-month return of 6.7% and a 12-month return of 18.02% (as at 31 March 2004, after tax and fees).
Furthermore, as a result of regular scrutiny by the PPS Investment Committee, this fund was recently restructured, helping it adapt to the current investment environment. The objective was to facilitate investment returns based more on careful stock selection rather than simply tracking the broader market indices, as per 'standard' managed funds.
Contact us for a referral to a local financial planner who meets industry best practice standards and who we are confident can provide investment recommendations and financial advice to maximise your financial security.
*NZ Law Financial Planning (wholly owned by NZ Law) can offer clients convenient access to a comprehensive financial and investment planning service via The Portfolio Group – a nationwide collective of 34 independently owned and operated financial planning companies. |
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