Investment Advisers you'd recommend to your friends

[Lizard]

I'm finally getting to an age where the occasional friend has some spare cash that isn't tied up in their house or kiwisaver and am being asked for advice. Now obviously, in this day and age, one should never give investment advice to your friends unless you are also a qualified AFA and have a formal client relationship with them. So their next question is likely to be "who would you recommend"... at which point investment DIY'ers like myself will be struggling not to say "NOBODY!".

So, faced with the question, who do you recommend and why?
Is there the equivalent of a "no cowboys" web-site somewhere with reviews?
Is there even a list anywhere of registered advisors on line (preferably with geographic location)?

I guess it may be difficult to name names in public, even for advisors you would recommend, so if you want to, please PM me (or write on this thread about their location and the reasons for your recommendation in general terms, so that anyone else interested can also PM you for a name!)

[peat]

Is there even a list anywhere of registered advisors on line (preferably with geographic location)?



http://ifa.org.nz/professionals/findadviser/search_advanced.php

This only works if you know the name (or part of), of who you are looking for , but may assist

[Lizard]

Thanks Peat! It seems to work if I just select the region, although the "city" selection is a bit hit & miss - e.g. I notice that it is possible to select for "Paraparaumu", "Paraparaumu Beach", "Kapiti" and "Kapiti Coast", and only one of the searches produces any results (and Chris Lee & his team don't show up in any of them, so I am presuming it is an opt-in list and not comprehensive?).

Sort of odd giving all their email addresses and then writing underneath that it is an offence to send any of them an unsolicited email. (I presume that is directed at spammers who would not be likely to care if it was an offence or not.)

Anyway, a list is better than nothing, so maybe I can have a look through web-sites and see which ones might be of interest. Still hoping there might be some recommendations from people. :)

[percy]

Good independent financial advice is hard to come by.
Rule 1. is to have everything in your name.Yes more paper work,but the advantages far out weigh the disadvantages.
Rule 2.Remmember rule 1.
Rule 3.Check Rule 1 and 2.
I have had people ask me whom I recommend.Over the years I have sent a number of people to Craig's, where they received excellent independent advice.
I know and have had dealings with the following Craig advisors who I can recommend.
Derek Howarth, Jeremy Crang,Ross Hutton,Patrick Lee,Maxwell Mathias,and Martin Fraser-Allen.
They can be contacted at [03[ 379 3433.

[Winston001]

Another punt for Craigs whom I have dealt with for 15 years or more. They are IMHO the most conservative brokers with excellent reports and trustworthy. I work with John Wilson in Gore which might sound insular but John was the South Island manager for a while until he decided working for his base clients was more important. Not many guys step away from the big name positions.

Prior to that I used to deal with Forsyth Barr but eventually decided that FB were mainly interested in promoting FB. Locally they are good, I simply have reservations about the overall business focus. Nevertheless I do deal with FB from time to time.

[Winston001]

However Lizard your query raises larger questions. After 30 years of investing in a passive way, I've come to the conclusion that buying Index funds (ETFs) are the most simple course for most people - and the most profitable.

Apart from that, Brian Gaynor of Milford Asset Management impressed me at a recent seminar. He doesn't pretend to win always, or be more clever than everyone else, and he openly acknowledges that Milford will be down some years. Overall they appear to be grounded and clever.

[Lizard]

Thanks for the thoughts!

Someone asked me via PM why I did not just become an AFA myself, and as this has been suggested to me a few times in the past, I thought I'd reply on-thread.

I did actually complete the Massey Diploma in Financial Planning in 2005/06 in order to pre-empt the regulation, and with the thought of becoming a Financial Advisor as my children grew up. However, my "forward planning" was not advantageous, as the initial registration process targeted existing FA's and kept everyone too busy to consider enrolling new recruits. Requirements are here (http://www.fma.govt.nz/help-me-comply/financial-advisers/how-to-get-licensed/afa-application-resources-and-templates/). They pretty much comprise:



Proof of competence (the Massey diploma will do for most of it for those who don't have a business/finance/accounting degree - there's a couple of easy standards, which require a quick study of the code and some more fees to complete)
Advisor Business Statement - ideally it's what the applicant is already doing, but actually they don't need to submit this, just confirm that they have one and re-confirm each year, bearing in mind that it could be audited by the FMA at some stage.
Proof of good character - the main one here is to have client testimonials and this becomes a bit "chicken & egg" for a new advisor, since all the possibilities (http://www.fma.govt.nz/help-me-comply/financial-advisers/how-to-get-licensed/afa-application-resources-and-templates/afa-testimonial-templates-and-guidelines/testimonial-guidelines/financial-advisers/) require a 3 year history working in the world of financial advice.
Plus a number of other minor requirements, including submitting fees currently totalling about $1,573 (with ongoing renewal costs).

The one that tripped me up is #3 - not because I'm not of good character, but I wasn't sure what would qualify for a testimonial for someone who wasn't already working in the industry. I discussed this with the FMA who advised me to seek work with a Qualifying Financial Entity for 3 years (most opportunities are selling mortgages or insurances) OR find an AFA who was prepared to supervise me for 3 years or until the FMA was content to accept the client testimonial obligations had been adequately fulfilled.

Since I have no aptitude for "selling", and tend to minimise the amounts I spend on insurance and mortgages, I am not the ideal candidate for the QFE jobs. And initial attempts to find an AFA willing to supervise were not successful unless I could guarantee to bring a couple of million $ accounts with me to make it worth their while.

Maybe in the end, I just didn't want to do this quite enough - the reality is, no matter how well intentioned one is, any organisation employing a Financial Advisor requires them to be, first and foremost, a salesperson.

[Sauce]

Maybe in the end, I just didn't want to do this quite enough - the reality is, no matter how well intentioned one is, any organisation employing a Financial Advisor requires them to be, first and foremost, a salesperson.

Well said. So true.
Sauce

[Lizard]

While I was on the FMA web-site, I found the current list of AFA's, so will put the link here in case someone else is looking:
http://www.fma.govt.nz/help-me-comply/financial-advisers/how-to-get-licensed/afa-application-resources-and-templates/list-of-authorised-financial-advisers-(afa)/

[percy]

Since I have no aptitude for "selling", and tend to minimise the amounts I spend on insurance and mortgages, I am not the ideal candidate for the QFE jobs. And initial attempts to find an AFA willing to supervise were not successful unless I could guarantee to bring a couple of million $ accounts with me to make it worth their while.

Maybe in the end, I just didn't want to do this quite enough - the reality is, no matter how well intentioned one is, any organisation employing a Financial Advisor requires them to be, first and foremost, a salesperson.

Product? I think if we compare Financial Advice Industry to "Honest John Motors" we get a lot better understanding of it.
Think of the brokers as car salesmen and the analysts as the mechanics.
So any business needs to sell it's product.
Anyone like you starting out in the business needs to bring clients and/or sell the companies product.[catch 22]
Advisors who are not bringing in the business will not be kept on for long.
NOW here is the difference,and why I recommended so many of Craigs ChCH staff.They all have been there a long time, have a large client bases,and are still able to offer independent advice while using the resources of Craigs.Small local brokers can't afford the cost of research.

[Lizard]

Product? I think if we compare Financial Advice Industry to "Honest John Motors" we get a lot better understanding of it.
Think of the brokers as car salesmen and the analysts as the mechanics.
So any business needs to sell it's product.
Anyone like you starting out in the business needs to bring clients and/or sell the companies product.[catch 22]
Advisors who are not bringing in the business will not be kept on for long.
NOW here is the difference,and why I recommended so many of Craigs ChCH staff.They all have been there a long time, have a large client bases,and are still able to offer independent advice while using the resources of Craigs.Small local brokers can't afford the cost of research.

Agree. My husband often jokes that I couldn't sell water in a desert - he's right. I'd probably just give it away with appropriate warnings about the dangers of over-consumption on a dehydrated stomach. :)

[percy]

I feel for you Lizard.
You have a great brain.You are a fantastic analyst,and have great communication skills.
You would make an outstanding advisor.
Just getting the start is so hard.Yet with so many brokers approaching retirement age,and having trouble keeping up with compliance issues,the industry needs you.
Established brokers don't really need to sell as their "good advice" [results] attracts more clients.Happy clients do refer more of their friends/family/contacts.
Remember the old salesman's sage advice;"if you give people what they want,you will get what you want!"

[Lizard]

Don't worry about me, percy - there will always be plenty of places I am needed. :cool:

The question remains though, how best to help friends. Craigs IP seem like a good choice - most of the investors I talk to regularly seem to use them and be happy enough, so I may well suggest they go that way. Plus they should be big enough to access relatively low/competitive fee structures.

Any other comments re helping friends and others experiences would be of interest too though. :)

[Aaron]

Good independent financial advice is hard to come by.
Rule 1. is to have everything in your name.Yes more paper work,but the advantages far out weigh the disadvantages.
Rule 2.Remmember rule 1.
Rule 3.Check Rule 1 and 2.

What about if you want to use margin lending that requires the securities to be in the name of, in my case ASB Securities?

[percy]

What about if you want to use margin lending that requires the securities to be in the name of, in my case ASB Securities?

When borrowing money for anything,be it shares, you have to go along with the lenders requirements.

[Sauce]

“The average person can’t really trust anybody. They can’t trust a broker, because the broker is interested in churning commissions. They can’t trust a mutual fund, because the mutual fund is interested in gathering a lot of assets and keeping them. And now it’s even worse because even the most sophisticated people have no idea what’s going on.” –Seth Klarman

[BIRMANBOY]

The underlying problem in "helping friends" is probably worthy of some extensive thought IMHO. So are you actually helping them by doing the work and research and then passing on this information or can you help them in a more holistic and responsible way by showing them how they can help themself, or are you helping them by telling them where to go.. Is the parable of teaching a man to fish etc come into play? The problem with helping is that some people are in the camp of "tell me what to do because I'm too lazy/tired/lacking in ambition etc to even think about doing it myself". I'm a firm believer in people taking charge of their destiny/investing/whatever themselves. Happy to help them get started and answer occasional query but ultimately people can and should take responsibility for themselves. If you reccomend Craigs or whomever and god forbid they have a bad experience all they will have learned is you and Craigs "steered them wrong" Its a no win scenario...if they do ok...a hefty % of their gains may be eaten up by advisory fees..and if it goes pear shaped well there goes the friendship. SO "How best to help friends" may well be a VERY convoluted question to answer. Not providing any answers just..suggesting..not that simple.
Don't worry about me, percy - there will always be plenty of places I am needed. :cool:

The question remains though, how best to help friends. Craigs IP seem like a good choice - most of the investors I talk to regularly seem to use them and be happy enough, so I may well suggest they go that way. Plus they should be big enough to access relatively low/competitive fee structures.

Any other comments re helping friends and others experiences would be of interest too though. :)

[Winston001]

The underlying problem in "helping friends" is probably worthy of some extensive thought IMHO. So are you actually helping them by doing the work and research and then passing on this information or can you help them in a more holistic and responsible way by showing them how they can help themself, or are you helping them by telling them where to go.. Is the parable of teaching a man to fish etc come into play?

True. Advising friends can be fraught. If they have an unhappy experience then you'll bear a responsibility no matter how unfair that is.



The problem with helping is that some people are in the camp of "tell me what to do because I'm too lazy/tired/lacking in ambition etc to even think about doing it myself". I'm a firm believer in people taking charge of their destiny/investing/whatever themselves.

Yes but you are saying that from a base of knowledge and experience. Most people do not have that and are unlikely to ever really learn it. People pay their bills raise their children and are often experts in their own work, however humble that may be. It is unrealistic to expect them to become investment experts, particularly after 30 years of working in a job.

[percy]

Yesvbut you are saying that from a base of knowledge and experience. Most people do not have that and are unlikely to ever really learn it. People pay their bills raise their children and are often experts in their own work, however humble that may be. It is unrealistic to expect them to become investment experts, particularly after 30 years of working in a job.

I have met so many successful people,farmers,retailers,airline pilots,car wreckers,builders,widows[husband did it all] etc who have NO IDEA about investment,and as you point out they will not/can't understand shares ,bonds or other forms of investment.
They would most probably find learning Chinese easier.

[JBmurc]

It's hard not to give advice when your asked(when you spend so much of your time investing/trading mates notice wonder how you afforded the big house etc) ..but I aways keep it IMHO bah bah go buy a blue chip thats out of favour etc ..I know guys that have good sized share portfolios but don't manage it the way I would like holding losers and selling growth shares just because they have grown 50-100% (perfect example was my oldman selling BRU because they doubled in value 25c to 50c yet they hit 3.50 within next 12 months...personal I stated just to sell half then let the rest run risk free )
Also I've got mates that have invested in companies I hold and been way to greedy i.e 100%+ return on a explorer within a year and still hold months later and end up following it down to see paper losses....(you alway here about those dam shares !!!! bah bah ....and not the fact about the growth after buying and the fact you stated more than once selling out)

Haven't yet talked with any.. Pro NZ advisers that haven't been trying to sell me basic low growth fund ....or tip sheet sellers promoting high risk high returns that mostly fail ...and do no better than many picks on ST

[BIRMANBOY]

Re your second point....You dont need to be "investment experts" to be self reliant in the investment field. People dont learn their trade overnight or get a degree overnight so why should investing be any different. Its a process like anything else so like any process its a take one step at a time. The type of person who says what should I invest in is the same type of personality that says what dress should I be wearing or what sort of watch should I buy or what school should I send the kids to. Its so much easier to let other people do your thinking for you...this is the main issue. I'm not a varsity graduate but I have managed to teach myself the investing basics over the last 4 years (after working in my profession(s) for 35 years. So I dont accept that its unrealistic for anyone to be a DIY investor. Not wanting to be involved leads some people to seek the easy way..asking friends/acquaintances etc etc. If they prefer this option as opposed to learning then so be it and after all its up to the individual. I believe that if there were established school study courses as we grow up and enter the workforce regards finance and fiscal responsibility and investment for retirement etc...then a greater % of the population would feel comfortable doing it themself. For those who cant or wont of course they are usefull in that they provide employment for all the advisors and funds in the finance industry. You would think however that people who know enough to make money to invest would also be capable of knowing/learning how to do it themselves.?
True. Advising friends can be fraught. If they have an unhappy experience then you'll bear a responsibility no matter how unfair that is.




Yes but you are saying that from a base of knowledge and experience. Most people do not have that and are unlikely to ever really learn it. People pay their bills raise their children and are often experts in their own work, however humble that may be. It is unrealistic to expect them to become investment experts, particularly after 30 years of working in a job.

[BIRMANBOY]

So getting back to your original question where to go or can people suggest a reliable place...my guess would be most well established and reputable advisors/firms will be fine...however..the more important question is do the friends have an idea/concept/goal in mind so that they can direct the advisor to create a plan geared around their goals. If they just go in and hand over the dough and say invest this for us they are at the mercy of the advisor. If they go in with a guideline in mind its much more likely to be dealt with appropriately. I would also put all of this in writing and have the firm confirm it in writing so they can be held accountable if stuff goes wrong. I would also put in writing that regular written monthly updates will be required. Also make sure fees are outlined and any equities are purchased in their name not the advisors or firms.

[Lizard]

So getting back to your original question where to go or can people suggest a reliable place...my guess would be most well established and reputable advisors/firms will be fine...however..the more important question is do the friends have an idea/concept/goal in mind so that they can direct the advisor to create a plan geared around their goals. If they just go in and hand over the dough and say invest this for us they are at the mercy of the advisor. If they go in with a guideline in mind its much more likely to be dealt with appropriately. I would also put all of this in writing and have the firm confirm it in writing so they can be held accountable if stuff goes wrong. I would also put in writing that regular written monthly updates will be required. Also make sure fees are outlined and any equities are purchased in their name not the advisors or firms.

Thanks, good points. I have definitely started a few generic notes on investing that will probably fill 2 or 3 pages, listing some points that investors might like to consider before meeting an advisor. I am hoping I can't go too far wrong with that - as long as I just explain the pro's and con's of different arrangements and portfolio asset types, fee structures, diversification etc and leave them to make a decision as to what suits them without having to read an entire book. :)

[CJ]

What about if you want to use margin lending that requires the securities to be in the name of, in my case ASB Securities?YOu can be pretty sure ASB isn't a ponzi scheme but anyone outside of the banks and too big to fail organisations, I would ensure it was held in a trust account (eg. Guardian Trust) who will have controls in place to make it harder for your advisor to run away with your money.