Smaller Investors Miss out on Advice

Read More

Smaller Investors Miss Out

One of the unfortunate consequences of increased regulation of financial advisers is that some smaller investors now find themselves squeezed out of the market for personalized investment advice. There are two types of investment advisers who are able to give advice to the public: Authorised Financial Advisers (AFAs) and Qualifying Entity Advisers (QFE advisers). Whereas AFA’s can give investment advice on a wide range of investment products, QFE advisers can give investment advice only on products offered by the company they work for. QFE’s are generally large companies such as banks and insurance companies. There are less than 2000 AFA’s in New Zealand, and many who hold the designation do not give advice to the general public. Just to make it even more confusing, some of the AFA’s work for QFE’s such as banks. An AFA working for a QFE can give advice on a wide range of investment products from different providers.

With the limited number of AFA’s available, many advisers and QFE’s are now setting minimum limits on the size of investment portfolio they will advise on and manage. These limits can be anywhere from $100,000 to $1million or more. At the other end of the spectrum, QFE’s such as banks are using the large number of QFE advisers in their branches to sell KiwiSaver and savings and investment funds for small lump sums or regular contributions. It is increasingly difficult for investors with small to average portfolios to find advisers who can advise them on a wide range of investment products from different providers. Getting advice on whether to purchase shares in the proposed Government asset sell-down is a prime example of this, as advice will need to be obtained from an AFA, not a QFE adviser, many of whom will not be interested in smaller investors.

Related Articles

Liz Koh

Budget Winners and Losers

The latest Government budget had something for everyone but while most households will be a few dollars a week better off, there are some clear winners and losers. In the winners’ corner are businesses, those on high incomes, and savers. The biggest losers are property investors who have built large portfolios financed partly by tax rebates.

Read More »

Top Up or Miss Out

The end of June is an important date for KiwiSaver members. The financial year for KiwiSaver runs from 1 July 2009 to 30 June 2010 and if you have contributed at least $1,040 to KiwiSaver during that time, you will be eligible for the full amount of Government tax credit to be paid into your KiwiSaver account in July.

Read More »

Responsible Investing

There is a worldwide trend for investors to want to make a positive contribution to the world by investing in companies that are socially and environmentally responsible. If you are passionate about the effects of climate change, the scarcity of food and water, and social or environmental policies in general, then you will no doubt wish to ensure that the companies in which you invest are going about their business in a manner that is consistent with your views.

Read More »

Helping You Live your retirement To the Max

Keep in touch

Fill in your details and we’ll get back to you in no time.