Q&As

Where to get help

QI am seeking a recommendation for a financial adviser please. As an early 60s white male, typically hardworking and generous, I have found myself in a pickle and wish to seek sound financial advice.

I have a good super scheme, but two mortgages and pending retirement in four or five years, and I cannot service recent debt following a self-funded home build.

I can’t explain the impact this is having on my wellbeing — hence the call for help.

AWell done for acknowledging your situation and taking action. Money worries can be so destructive. And help is there for the asking.

There are two types of people who give financial advice — mentors and advisers.

Mentors are free, and generally help people who are having trouble with debts, budgeting, changing bad habits and so on. They might, for example, help you negotiate a workable deal with a lender, so that you repay a debt more gradually, and possibly repay a smaller amount. I keep hearing how helpful mentors can be.

Advisers, on the other hand, usually charge a fee, and help people with their investments. They’re a mixed bag, ranging from excellent to dodgy.

Earlier this year, the Financial Markets Authority published a report on its monitoring of financial advisers. While it found many were doing a good job, it also said:

  • Some advisers, “did not demonstrate reasonable grounds to ensure their advice was suitable to their clients.”
  • “In some cases, the FMA continues to observe instances where advisers switched a client to a product provider that paid higher levels of commission for the adviser without demonstrating how they prioritised the clients’ interest.”
  • In the advisers’ disclosure to clients, “Some gaps observed included a lack of detail, in particular on disclosure of commissions and incentives. Some disclosure was not provided in a timely manner, and complaints and DRS (disputes resolution scheme) information was missing.”

How should readers choose a financial adviser? For a start, I suggest you talk only to those who charge you a fee. And if they receive any commissions for investing your money, they pass that on to you. That removes the incentive for them to use providers who reward them, rather than using the best ones for you.

Years ago, I ran a list of advisers who charge fees, and meet other criteria, on my website. A while back, I passed that list to MoneyHub, which now runs it. Readers can find the list, and ideas on how to select an adviser, by doing an online search for “MoneyHub advisers”.

However, it sounds as if you might need a mentor, rather than an adviser, at this stage. Go to the moneytalks.co.nz website to get in touch with a mentor in your area. Do it now! You don’t need a worry-filled Christmas.

Bank helpful, but…

QAs a baby boomer who is s-t-r-u-g-g-l-i-n-g with computerization, if I unexpectedly became very rich I would panic, because so much has changed. Who could I turn to who would not steal money off me?

When I retired I made an appointment with a financial adviser at my bank and that interview was very helpful. I slept well that night! My bank also offers financial assistance with my retirement portfolio, checks in with me regularly, and is available if I have any questions. I talk to people. Not computers.

Recently, your readers appear to focus on the fabulous amount of money that some people have. Don’t forget that some people are out of their depth in these matters, and need guidance. Winning fortunes is not for the faint-hearted.

AIndeed! And I agree that financial advisers at banks can be helpful. Keep in mind, though, that their advice will be biased towards their products, which may not be the best ones out there for you.

Kids are learning

QA contributor to last week’s column was highly critical of an “ultra-privileged” person asking for financial advice. It is wrong to assume that someone should have a high level of financial capability simply because they have, either through their own efforts or inheritance, accumulated wealth.

Common concerns and issues that I have frequently witnessed amongst fairly high wealth individuals include:

  • An inherent fear of having no income and eating into capital — the opposite of how they have spent most of their lives.
  • A mistrust of stock markets, having lived through previous crashes.
  • Having too high a proportion of their wealth in lifestyle assets — typically property.
  • Not knowing how to manage a portfolio of financial investments to provide income, and hence focusing only on income-producing assets such as term deposits and investment property.
  • An innate inability to budget.

Personal financial management is not taught at schools, nor as part of most tertiary training. How, therefore, should people be expected to acquire this knowledge? The smart people in my opinion are those who ask for advice, and shaming people because of their level of wealth, high or low, is completely unacceptable.

AYes, I’ve received questions from people with all those issues. And while some are well off, others are less so. Regardless, I always hope that my replies will be useful not just to the correspondent but to many other readers.

It’s no longer correct, though, to say money issues aren’t taught in schools. The Retirement Commission’s Sorted in Schools programme provided resources to 89.6% of schools in 2023/4. “However, we don’t have data on how many teachers within each school use the resources and for what period,” says a spokesperson.

She adds, “Sorted in Schools also offers professional learning development for teachers so they can learn more about teaching financial education within their subject area.” That’s particularly good to know.

The Commission also lists eight other organisations providing financial tools for schools. Much progress has been made since I, and apparently you, were in the classroom!

Many struggle

QI suspect you were as stunned as I was to read the question from a wealthy man seeking financial advice. As the chair of a budgeting service, I would love to share with that gentleman the reality of what many people aged 65-plus experience. Compared to 2021 stats, that couple have 12 times the individual mean net worth of that age bracket.

And it is worse for many couples. This year, 40% of our new clients are aged 65-plus. Not only can these people not afford to “clamber into a hammock with a good book” but they struggle daily with accommodation, food, and power and often cannot afford even a casual “treat”. As a member of that same age group, I am shaken by the fact that people have reached that age still caught in the cycle of worry and stress by ordinary day-to-day financial pressures.

If that gentleman would like to donate a portion of his income to help us work with less fortunate couples as they negotiate the days between pensions, we could guarantee his money was put to good use.

AServices like yours are making a huge difference to many people, and I agree that it would be great to see wealthier people donate to budgeting services.

On the brighter side, I like to think that the advent of KiwiSaver will make it increasingly unlikely, as the years go by, that people will retire with no savings.

‘Crazy, sad and repellent’

QI just have to respond to the headline about someone with $8.5 million who still doesn’t think they have enough to retire. What impact do you think that has on people? Will it be helpful? Inspiring? For 99.99% of people, this amount of money is in fantasy Lotto territory.

In a previous job I worked in South Auckland, helping to bring people out of long-term unemployment into full-time work. As part of the course, there was financial tutoring every week, and I would encourage them to learn about KiwiSaver and read financial columns, like yours and Diana Clement’s.

But stories like the $8.5 million guy would just make everything seem impossible and completely out of touch for the vast majority of people. And on some level it’s crazy and sad and a bit repellent. Of course this guy has enough money — more than enough. He could give away half and still have enough.

I know this story made good clickbait, but in this current financial environment, when so many people are struggling, when there are people terrified about what the retirement years will hold, it is not bringing more hope and positivity into the world.

AGood on you for the work you did in South Auckland.

On whether that Q&A would upset struggling people, I’m sure they already know there are richer people around — including, for example, show business and sports figures.

Many people just accept those people are different, while others might be inspired to copy them. See the next Q&A. I’m not convinced that many would be discouraged by reading about them.

It’s partly luck

QIt’s sad that you need to justify to your readers that you choose to respond to one of the “wealthy readers”.

What I took from this person’s letter is that they are hard working (still working at 72), have made good career choices ($200,000 salary), and have lived within their means to create a great nest egg (they say they live well, but modestly). Their situation did not come about by luck, but rather hard work and sacrifice and is something we should all aspire to.

AThanks for your support. But I’m afraid I disagree about luck. It seems there’s an element of good fortune in the story of every financially successful person.

Many hardworking people who live within their means don’t end up with much money. The wealthier ones perhaps went to the “right” school, or met the right person at the right time, or were encouraged by those around them, or …

That’s why it’s great when better off people lend a hand to the less fortunate, through volunteering or donating money.

Meaningful Christmas Gifts

Many charities offer Christmas gift programmes. You buy items for people in need that are given on behalf of your family or friends. For example, you might donate money for school equipment in developing countries. You receive an acknowledgement to give to your relative or friend to show what they have “donated”.

It makes a great Christmas gift — more meaningful than buying stuff for one another that is often not wanted.

Each year, this column runs a list of charities that take part in these programmes. I’ve asked each one to describe their programme in 20 words or less:

  • Caritas Aotearoa New Zealand: 0800 22 10 22 or caritas.org.nz/caritas-gifts. “Caritas Gifts of hope, life, peace, or learning enable our life-changing work in Aotearoa New Zealand, and around the world.”
  • ChildFund NZ: 0800 808 822 or shop.childfund.org.nz/pages/gifts-that-grow. “Gifts that Grow — life-changing help for children where they need it most. Bring safe, clean water to Pacific children.”
  • Christian World Service (CWS): 0800 74 73 72 or gift.org.nz. “One gift from you — great joy for many otherwise caught in poverty and injustice.”
  • Leprosy Mission New Zealand: 0800 862 873 or reallygoodgifts.org.nz. “Share God’s love with people facing leprosy this Christmas; for as little as $10 for a pair of protective sandals.”
  • MEND NZ — 021 060 9631 or mend.org.nz. “Provide Pacific, African, Himalayan youth a prosthesis to walk to school or hearing aid to hear for the first time.”
  • Oxfam Aotearoa: 0800 600 700 or unwrapped.co.nz. “Give a meaningful gift this season while providing clean water, education, or disaster relief to a community in need.”
  • Save the Children New Zealand: 0800 167 168 or gifts.savethechildren.org.nz. “Give the gift of a bright future! From clean water to a school library, your Good Gift helps kids thrive.”
  • Tearfund NZ: 0800 800 777 or giftforlife.org.nz. “Give a life-changing gift that helps someone living in poverty overseas, including coffee plants ($25), chickens ($20) or goats ($55).”
  • The Fred Hollows Foundation NZ: 0800 227 229 giftofsight.hollows.org.nz. “Give a gift to someone you love, transform the life of someone in the Pacific. Give the Gift of Sight.”
  • World Vision New Zealand: 0800 800 776 or worldvision.org.nz/smiles. “From emergency food to school supplies to beehives, choose a meaningful gift that changes lives with a World Vision gift.”

No paywalls or ads — just generous people like you. All Kiwis deserve accurate, unbiased financial guidance. So let’s keep it free. Can you help? Every bit makes a difference.

Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.