This is the information that you will receive in your 2025 Annual Review about our topics to discuss this year
Talking about Scams and BetaShares Fund Manager Profile
Scams
We have previously had a focus on your digital security, passwords and cyber security, but the sophistication of scams is increasing more or less by the day. This is quite a threat to your wealth, so it is important that you take a lot of precautions, and if in doubt ask your adviser.
We have outlined some actual scams below and have put information for you to read in your Additional Financial Information folder. But the important thing is to know what to do when a scammer is contacting you.
The examples keep on coming – here is one from Wall Street Journal (article in the Additional Financial Information folder.)
Fraudsters are deploying AI to more efficiently perform a variety of tasks. That includes blasting out text messages to bait victims and writing programming to test huge volumes of stolen credit card information, she said.
AI is also helping scammers generate more fake online ads and shopping sites that entice people to share credit-card information. One person was duped by such a scam after clicking on an ad for an advent calendar based on a children’s game his 10-year-old son loves. The ad took him to what looked like a Macy’s webpage, where the calendar was listed for half its normal price at $39.97. A countdown showed they were rapidly selling out. It was only after his second attempt at the purchase went through that he realized he was never asked for an email address for shipping confirmation. “Then I knew I got scammed,” he said.
And, thanks to Rachel for sending me this information - What I wish I’d known before my smartphone was snatched (free to read on FT at https://www.ft.com/content/26be349d-4717-4815-a221-a749e29de2b2 and printed to PDF in the Additional Financial Information folder.
Examples of Scams
A fraudulent transaction on your bank account
On the day that I wrote this, I got a phone call from an ‘unknown number’ with a scratchy phone line. The person sounded like a New Zealander, and they said that they were calling me from Kiwi Bank and that there was a suspicious transaction on my account and they needed to talk to me about it. Fortunately, I only have a credit card with Kiwi Bank, so I kept asking ‘what account is this from’. I had to ask this three times before they actually engaged with me and veered from their script. When they said it was from my cheque account, I said ‘I don’t have a cheque account with Kiwi Bank, goodbye’, and hung up. It would have been more tricky if I did and I would have had to ask a whole lot more questions.
The first tip is:
RULE 1 - BE SUSPICIOUS, Don’t trust anyone who is ringing you to talk about money unless you absolutely know who they are (eg Peter, Carey, Paul) and can prove that it is us and not some AI replica of us. We won’t ring you with an ‘offer’. If there is an ‘offer’ we will always email you and if you are suspicious of an email you get from us, ring 0800 225 621 and leave a message for us to call you back.
A ‘too good to be true’ investment offering
One of our clients fell for this scam and lost over $100,000, You may recall that we wrote two articles in our blog about it – read them again to remind yourself and share them with friends. You can find them at:
https://www.moneyworks.co.nz/blog/post/113837/sexy-investment-or-an-investment-scam/
https://www.moneyworks.co.nz/blog/post/135191/update--sexy-investment-or-scam/
More articles that we have written can be found at:
https://www.moneyworks.co.nz/blog/post/113836/scam-warnings--again--but-this-is-important/
Remember – real investments don’t just ‘come out of the blue’. It is illegal in New Zealand to sell a financial product through a cold call or an email that you haven’t agreed to receive.
MOST IMPORTANT – if the company or issuer is not registered in New Zealand as a Financial Services Provider, you don’t have any redress against them. Like the situation with our client who got caught out, they might threaten to sue you to deliver on your contract, but they have no legal standing to do this. But worse – you have not way to hold them accountable. They can just ghost you – stop answering your emails and phone calls, and then you have no way to get your money out of them.
RULE 2 - IF IT LOOKS TOO GOOD TO BE TRUE IT USUALLY IS – IF YOU DON’T UNDERSTAND IT – WALK AWAY
If you are looking at any investments that look really exciting, talk to your adviser about it, we have a lot of experience in looking at investments and can usually tell within 5 minutes (if not 1 minute) whether it is a scam.
Imposter websites
There are so many imposter websites now (we get a long list several times a month from the Financial Markets Authority (FMA)). This is where someone sets up a fake website for a bank, or a term deposit comparison website. It might be hidden in a link that you click on Facebook or on Google. NEVER buy anything from these sites. If you want to look at the potential offer from the organisation these are the steps you should take:
1. Open another browser (ideally an incognito one) – so that your cache doesn’t just remember the potentially dodgy site. This is easy to do if you are using Chrome, just go to File / New Incognito Window
2. Manually type in the search eg ASB Bank Term Deposit offer 1 year.
3. If you still aren’t sure – ask your adviser to look.
RULE 3 – DON’T TRUST THINGS YOU CLICK ON WHEN YOU ARE SEARCHING. Always check whether it is real by googling the offer in an incognito window. If in doubt, ask your adviser.
RULE 4 – DO A GOOGLE SEARCH USING THE WORDS - ‘IS XYZ A SCAM’
RULE 5 – CHECK THE FMA’s SCAM REGISTER https://www.fma.govt.nz/scams/
The types of scams are continually evolving, one of the latest ones is a NZ Post Delivery (possibly other couriers too) Scam.
A new method which has just reached NZ’s shores is a QR based scam, where an unexpected parcel is delivered, and requests the receiver to scan a QR code to reveal the mysterious sender. This poses a great threat to your customers as they risk granting access to all data, including stored financial information, within their phone if they were to follow these instructions.
NZ Post Scams (this applies to IRD and many other Government Agencies)
These include Text Messages with a hyperlink in it (NZ Post doesn’t send hyperlinks, nor does IRD), Emails from NZ Post with a Hyperlink. Emails with NZ Post Branding that are from an email address that has nothing to do with NZ Post. New scams are where a message with an organisations branding has a QR Code to click on.
Read more here https://www.nzpost.co.nz/contact-support/scams-and-fraud.
RULE 6 – IF YOU GET AN EMAIL - CHECK THE EMAIL ADDRESS AND DON’T CLICK ON HYPERLINKS or QR CODES IN TEXT MESSAGES AND EMAILS OR SOCIAL MEDIA POSTS OR IF YOU GET AN UNEXPECTED PARCEL
There are many scams where fraudsters use famous faces and make social media posts and advertisements and even fake videos with that person endorsing their product.
RULE 7 – FOLLOW THE PREVIOUS 6 RULES!!
Summary of the Rules to protect yourself from scams
RULE 1 - BE SUSPICIOUS, Don’t trust anyone who is ringing you to talk about money unless you absolutely know who they are (eg Peter, Carey, Paul) and can prove that it is us and not some AI replica of us. We won’t ring you with an ‘offer’. If there is an ‘offer’ we will always email you and if you are suspicious of an email you get from us, ring 0800 225 621 and leave a message for us to call you back.
RULE 2 - IF IT LOOKS TOO GOOD TO BE TRUE IT USUALLY IS IF YOU DON’T UNDERSTAND IT – WALK AWAY
If you are looking at any investments that look really exciting, talk to your adviser about it, we have a lot of experience in looking at investments and can usually tell within 5 minutes (if not 1 minute) whether it is a scam.
RULE 3 - DON’T TRUST THINGS YOU CLICK ON WHILE YOU ARE SEARCHING. Always check whether it is real by googling the offer in an incognito window. If in doubt, ask your adviser.
RULE 4 - DO A GOOGLE SEARCH USING THE WORDS - ‘IS XYZ A SCAM’
RULE 5 - CHECK THE FMA’s SCAM REGISTER https://www.fma.govt.nz/scams/
RULE 6 - IF YOU GET AN EMAIL - CHECK THE EMAIL ADDRESS AND DON’T CLICK ON HYPERLINKS or QR CODES IN TEXT MESSAGES AND EMAILS OR SOCIAL MEDIA POSTS OR UNEXPECTED PARCEL
RULE 7 - FOLLOW THE PREVIOUS 6 RULES!!
More resources:
Consumer Protection https://www.consumerprotection.govt.nz/general-help/scamwatch/avoiding-scams
Some extra hints:
1. Reserve the right to be impolite
2. Resist demands to act quickly
3. Keep your computer virus protection up to date
4. Never open attachments or click on emails if words or images make you feel unsure about the sender
5. Use different passwords for logging in to online services.
Fund Manager Focus – BetaShares (BetaShares Australian Leaders PIE, BetaShares Global Leaders PIE, BetaShares Nasdaq 100, BetaShares Climate Innovation Fund).
Over the last two years, we have given you a short summary about two of your funds and how the fund manager works – the Pathfinder Global Responsibility Fund (Top Down, Research Driven, Desk Based) and the Stewart Investors Worldwide Leaders Sustainability Fund (Bottom Up, People Driven). Both of these fund managers are ‘active’ managers – that is they use humans’ brains to make investment decisions.
Most of your fund managers that Moneyworks recommends to you are active managers. But this year, we are going to tell you about BetaShares, who are what we call a ‘Defined Index’ fund manager, and they use computers to make the decisions about where your funds are invested.
The point of providing you with this quick overview of your fund managers is so that you can understand why we have different fund managers working for you and understand how they take different approaches to deciding what investments to invest in. This is a key part of us ensuring that you have diversification in the approach to investing in your investment portfolio.
Here are some of the key points of the BetaShares approach and investments:
1. Privately owned Australian Company, but has a private equity ownership share from TA Associates.
2. The funds that we recommend to our clients are as follows:
a. Betashares Global Sustainability Leaders Fund [ETHI] (NZ PIE and currency and imitates the Australian based fund)
b. Betashares Australian Sustainability Leaders Fund [FAIR] (NZ PIE and currency and imitates the Australian based fund)
c. Betashares NASDAQ 100 ETF [NDQ] (Listed on Australian stock exchange – AUD and Foreign Investment Fund)
d. Betashares Climate Innovation Fund [ERTH] (Listed on Australian stock exchange – AUD and Foreign Investment Fund)
3. Betashares has over $44 billion funds under management and has grown rapidly in the last four years.
4. These are low cost funds as there is no human decision making and research involved (ETHI NZ 0.77%, FAIR 0.67%, NDQ 0.48%, ERTH 0.65%)
5. Each fund is based on a ‘defined’ index. Betashares create the index with certain parameters and the fund reflects that index. They can use external organisations to develop the index – eg Solactive.
6. The funds have more or less the same number of stocks from year to year (ETHI NZ 200 FAIR 80, NDQ 100, ERTH 98).
7. Normally the portfolio constituents are only rebalanced once or twice a year based on the framework designed by the index provider. Decisions about which stocks to hold are not made on a daily basis by humans.
a. ETHI - May
b. FAIR - September
c. NDQ – December – but re-set each quarter
d. ERTH – February and August
8. The investments in the three Sustainable funds are overseen by an responsible investment committee with experts that check the bona fides of the investments.
9. While there is a ‘portfolio management team’ – these people don’t actually make investment decisions. Their job is to manage the day to day technology and administration, to minimise the tracking error and costs and make sure that the funds are working properly.
Moneyworks NZ Ltd
P: 0800 225 621
E: contact@moneyworks.co.nz
P O Box 1003, Cambridge 3450
Licensed Financial Advice Provider - FSP 15281
Regulatory Information: Moneyworks is a Licensed Financial Advice Provider (FSP15281), and AML Reporting Entity and is supervised by the Financial Markets Authority.