Life insurance – boring!

Life insurance.

Two words that are guaranteed to put you to sleep. It is a product that no-one wants, but most people need. I have a different view. If you are educated about what you are paying for and given clear, professional, unbiased advice, then surely life insurance just becomes another part of your financial plan, albeit one that you never want to use. We insure our houses, but I guarantee you that no-one wants their house to burn down.Read More

Just make sure you do this in 2016

In all my time as an adviser there is still one thing that distresses me, seeing families grieving. But, there are different kinds of grief, shock, long slow grief and short grief, but what is worse is when the person who left leaves behind a paperwork mess for someone else to clean up.

I don’t know anyone who would purposely cause extra stress or harm for those closest to them. In times of stress decision-making abilities are put under strain, amongst other things.  Presuming that your family will know your wishes if you go is fraught with danger, danger of pulling families apart unnecessarily.

If you leave behind loved ones through dementia or death they be very unhappy if you haven’t done this:


This includes but is not limited to:

  • your Will (is it up to date?)
  • your Living Will (what happens when you can’t make decisions for yourself?)
  • does anyone know where this information is?

Most people I talk to say, “I started thinking about that the other day…”

If you don’t let people know what your wishes are and leave them where someone can find them, you are causing extra upheaval at a very stressful time.

Whatever you do in 2016, sort out your estate planning.

None of us know when we will go, so do it now.

I have three free copies of the book above to give away, email me if you would like one.

New to getting financial advice? Impartial resources for New Zealanders

On my quest to find impartial advice about finding a financial adviser I have come across this fantastic website written by the FMA (Financial Markets Authority).  The government department who controls the financial markets.

Lets start with the basics:Important

Have you ever wanted to know what to say when you meet with an adviser?

What is Kiwisaver:KiwiSaver logo_RGB

And best of all, getting something for nothing!

The information above is provided by the government in a bid to build confidence in the advice area, after all, they are the monitors of it.  Please let me know if this has helped you and what it helped with.

Note of caution: this site is really for New Zealanders only

3 Tips to Better Budgeting (ignorance in this case is not bliss)

I don’t know anyone who enjoys writing a budget for themselves, but doing so can bring financial confidence and have long-lasting positive impact.  I know that when I start talking about personal finances to most people they either switch off, change the subject or walk away!  But, even if this is you, don’t click away, give it a go, you may not be asleep by the end of it!

Tip 1: Tell the truth by knowing the truth
There is no use wriggling when in sinking sand, you only sink faster!!
man in sinking sand

I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.”
H. L. Mencken

Once you know where you are starting from, it is easier to know where you are going.  If you earn $50,000 a year, don’t write in your budget that you earn $100,000 a year, even if that is your goal.  If you spend $400 per week on groceries, don’t put in your budget that you spend $250 per week, even if that is what you would “like” to spend, it is not the truth.

Once you have the actual truth in front of you, including all your extras, you can make real choices about real situations.  Doing this is not only freeing, it is also helpful when out shopping to not buy items that you don’t need, or book trips you can’t afford.  See it as an opportunity to get creative, figure out a new income stream, economise on boring spending such as power and other utilities, make sure you have the best deal from your bank (yes you can and should negotiate with them).

Tip 2: Use 3 months’ of Actuals (i.e. direct from your bank statement)

hands-typing-2Bank statements are now able to be downloaded easily enough and the information can be sorted in different ways to suit what you are trying to find out.

You can also use a budgeting website such as to organise your income and spending.

Starting from your actual spending will help you identify what is going right, as well as what is going wrong, and more importantly give you an opportunity to change what is necessary to move in the right direction.

This whole process is about improvement and creating opportunity for success, so if you are not feeling this way by now, then the next tip is for you.

Tip 3: Don’t beat yourself up, practice makes perfect, or close enough

We all make mistakes, we are human, it happens.

We can also be caught out by circumstances beyond our control.  If this is you, do not fret, the best path to making it back to your goals is to readdress the actuals, adjust for the interruption and figure out a way forward.  If you are having trouble with this, at least you will know your actual situation when seeking help, which will save you lots of money if you are paying by the hour to sort it out.road-nature-lines-country2

Don’t look at unexpected detours as failures, just think of them as opportunities to practice finding your way back to the road you want to be on.

As financial advisers we are here to help, we are interested in YOUR success, because it becomes our success.  If you need help, please ask, if we can’t help you we will try and find you someone who can.

It is your money, in your hands, whether or not it is sorted, is up to you.

Celebrate Life: Happy Easter: Be Safe

Gilchrist childrenAt this time, when most are taking a long weekend off, please remember to be safe on the roads and wherever you are travelling, let us all celebrate those closest and dearest to us and take this time to celebrate life, together.

For those of us in the Bay of Plenty we are having a horror year on our roads, and with the wet weather set to continue please be careful, be patient. This was driven home by a letter from the Police to all those involved at my children’s school, they are interested in our safety so they are going to patrol our horror SH 2 more than ever.

You may think this a strange message from financial advisers, but that is just it, we are interested in you, you staying alive long enough to enjoy your hard earned savings, we want your family to be together, not arranging a funeral.

For the sake of your family, be careful out there.

“R” is for Regulation – The NZ Initiative

ABC_s_of_economic_literacy_2_2_.1Regulations govern conduct and a well-regulated society is a well-ordered and civil society.  But bring up the topic of government regulation and expect passionately polarised responses for or against more rules or less red tape.

Government regulation can be particularly controversial when the community is deeply divided over some regulatory choice that must be made, such as the rules affecting abortion, compulsory military service at the time of the Vietnam War, or to allow or ban the Springbok tour in 1961.  But a prime role of government is to find a response that best preserves community peace and cohesion.  A society without government regulation is a fantasy.

More generally, government laws and regulations can displace, for better or for worse, rules in privately-agreed arrangements for regulating conduct, such as employment agreements, school rules and rules governing gated communities.  They can similarly displace long-accepted common law rules.

Government regulations are sometimes categorised as social (eg abortion laws), environmental, or economic.  Views about their desirability differ, particularly through time.  A major change in recent decades in New Zealand, and elsewhere, has been a rise in restrictive environmental regulation offset by major economic de-regulation.

Today much government economic regulation is ostensibly aimed at stopping businesses from exploiting or misleading suppliers, employees, customers and investors.  Yet economic research finds that businesses may support some of this regulation, perhaps judging that it most hurts competitors.  For example, the regulation of quality can raise costs disproportionately for SMEs, hurting consumers overall.  Economists call this the capture theory of regulation.  However, the theory may not explain regulations that are opposed by business.

Another proposition is that governments care not one fig about interest group pressures or contributions to political campaigns, but regulate solely for the benefit of the wider community.  This is called the public interest theory of regulation.  A major regulatory textbook dryly observes that a large amount of evidence refutes this naïve proposition.

In contrast, the mainstream economic theory of regulation proposes that interest groups lobby for changes in regulations that will particularly benefit them and politicians respond rationally to these demand since they want to get re-elected.  Political parties merely differ with respect to their favoured constituencies and ideologies.  Outcomes can be difficult to predict since they depend on the voting balance between contending considerations, but the national interest is not centre stage.

Whether a particular regulation does best serve the overall community can be difficult to determine.  Economists use cost-benefit analysis for this purpose, but it has well-known limitations.  Any analysis should anticipate the Law of Unintended Consequences – the adage that intervention in a complex system commonly creates unanticipated, often undesirable, outcomes.

The ABC of economic literacy |

Five Questions to ask a Financial Adviser

I wrote this some time ago to help people new to using a financial adviser.  It can be daunting to talk to someone about your money that you do not know, so take the time to ask the basics first before discussing your situation.

1. Can I read both of your Disclosure Statements please?

2. What does your level of qualification mean and what type of authorisation to work does that give you?

3. This is my situation, do you think you can help me?

4. How will you charge me? Are the different services charged differently? Are there any ongoing charges?

5. Why do you think you are the best person to help me?

After this, if you don’t feel comfortable it may be time to try someone else.  Your financial adviser needs to know everything about you and if you don’t feel comfortable with them it will be hard to share the information and you won’t get the best from their service.  We are all different, that is okay, just find the one who is right for you.

Financial advisers and ones that got away – NZ Herald

11:00 AM Saturday Oct 6, 2012
Despite new laws, the public still needs to be a little wary. Hands up who knows the difference between a registered financial adviser and an authorised financial adviser? And what on earth is a QFE?

The answers matter. A registered financial adviser is someone who fills in some forms, pays some money and can hang out his or her shingle and start selling insurance, mortgages and other “category 2” financial products. Registering as a financial adviser is as easy as registering a dog or a motor vehicle.

An authorised financial adviser, on the other hand, has to pass exams, follow a code of professional conduct, which can be found at, and must be transparent in his or her dealings with an investor. Only these advisers should be providing financial plans and giving advice on investments and KiwiSaver.

At best, says Massey University’s Dr Claire Matthews, the public may know that “financial advisers” have to meet some rules. “Do they fully understand the difference?” she asks. “Probably not.” Read More

Trust Income – Tax issues – NZ only

We would like to kindly thank Murray McClennan (principal of Tax Central Limited) for this article.

Income received by the trustees of a trust may be distributed as beneficiary income or retained as trustee income. In making decisions about income distribution or retention the trustees must have regard to the trust deed and trust law.

An issue that I have often wrestled with is whether deemed income recognised for tax purposes can give rise to beneficiary income for income tax purposes. Examples of this include:

  1. Unrealised foreign exchange gains;
  2. Attributed controlled foreign company income; and
  3. Foreign investment fund income.

Inland Revenue has recently issued a very comprehensive interpretation statement (IS 12/02) on this issue. The interpretation statement concludes that deemed income is never of itself “beneficiary income”, but by a combination of the relevant trust deed and the trustees’ actions, deemed income can in some situations give rise to beneficiary income. For this to be the case, any vesting or payment of deemed income must be effective for trust law purposes to be beneficiary income for tax purposes.

The interpretation statement identifies three separate scenarios:

The trust deed does not define income;

  1. The trust deed defines trust law income as income calculated for income tax purposes; and
  2. The trust deed defines income using trust law concepts of capital and income, but the trustees have the power to distribute trust capital to income beneficiaries.

Under the first scenario trustees cannot distribute deemed income as beneficiary income for income tax purposes.  Under the second and third scenarios trustees may distribute deemed income as beneficiary income for income tax purposes.

This issue further highlights the need for trustees to act carefully in administering a trust!

Murray McClennan is the principal of Tax Central Limited, a specialist tax advisory firm. He can be contacted at  The above comments are of a general nature only and are not a substitute for specific advice.

Make the most of what you’ve got – Make it, save it, spend it!

Financial awareness is about truly understanding your financial affairs and what choices you have to improve these.

Financial advice is the process of developing strategies to help you manage your financial affairs so you can build wealth, enjoy life and achieve financial security. Good advice can change your life.

The old adage of ‘you don’t know what you don’t know’ is never more obvious than when overhauling your financial dealings.  When it comes to designing your financial future, there is no one right answer.

The role of a qualified financial adviser is to look at all aspects of your lifestyle, goals and requirements and develop a financial strategy suitable for you.  The recommended strategy should help you reach your financial goals effectively and efficiently.

When developing a financial plan for you, a planner will follow a structured six-step process to help understand your needs and recommend an appropriate strategy.

Good advice from an experienced, well-informed financial adviser can help people save money, protect against risk, manage debts, grow assets, reduce tax liabilities, plan for retirement, identify entitlements for government benefits, and plan what is to be left to the next generation.

The money you can save by seeing a financial adviser can far outweigh the losses made from uninformed choices.  Regular interaction with your planner can ensure that your financial strategy is always consistent with your goals and changing lifestyle needs.

The advice may or may not involve the recommendation of a financial product.  The role of a financial adviser is not to sell financial products, but to help you meet your goals.

Choose your financial adviser very carefully, as ideally, you could be working with this person for a long time, and they will be guiding you through some very important decisions.  Ensure your adviser is qualified, belongs to a professional body and most importantly, is someone with whom you feel comfortable.

Judi Galpin of DecisionMakers (Manawatu) Limited is a member of the Institute of Financial Advisers and is an authorized financial adviser.  A disclosure document is available on request and free of charge.