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What is 'Financial Planning'?

In 1989, Carey decided that she wanted to have a financial planning business in a 'small town' (as compared to the cities of Hamilton, Adelaide, Sydney and Wellington that she had lived in.)  Carey had been working in the relatively new financial planning industry since 1985 in Australia and then New Zealand - after finishing Waikato University with a BSc majoring in Economics and Earth Sciences, and then gaining a Post Graduate Diploma in Applied Finance (from what is now Finsia). Making this decision at the age of 25, she knew the time wasn't right to set up this business, and spent the next 8 years learning as much as possible about how advisers throughout New Zealand worked, and deliberately working in different types of funds management organisations to gain as much experience as possible (the insurer, Colonial, the bank, ANZ, and with her previous experience at an independent fund manager, Fidelity Investments, in Sydney.)

Having researched the industry for 8 years, by the 14th February 1997, when Carey set up Church Financial Services Ltd (now Moneyworks), she knew that she wanted the business to focus on four things:

  1. The golden rule 'do unto others as you would have them do unto you'.
  2. Providing extensive education and information to clients and other people who wanted to 'do it themselves'.
  3. Helping people to plan for their future and manage all their financial solutions along the way - looking at working with people aged 35-55 (then working with them for the rest of their lives).
  4. Providing full service holistic financial advice.

Although there are now around 30,000 people in New Zealand who are categorised as 'financial advisers', there is a large variety in the services provided by different advisers.  There are around 6500 'RFA's or Registered Financial Advisers, who will help you sort out your insurance and/or mortgage solutions from a range of providers.

There are estimated to be around another 22,000 or so people who work for a 'QFE' - a Qualifying Financial Entity - like a bank or a large insurer like AMP or Sovereign.  These 'QFE advisers' are restricted in being able to offer you assistance with a limited range of solutions, those provided by their QFE, and are generally limited to being able to assist you with term deposit, savings, KiwiSaver, mortgage and insurance solutions, but only those the QFE has available.

There are around 1800 AFA's or Authorised Financial Advisers in New Zealand.  These people have been authorised through a multiple step process including tests of good character, qualification requirements and ongoing requirements for continuing education.  These 1800 advisers can advise you on investments and KiwiSaver, from a range of providers, and some also provide advice on insurances and mortgages.

It is estimated by David Chaplin in a report entitled 'The last of the AFA's' that there are only around 320 or so advisers who are not associated with a large entity or stockbrokers, who provide investment advice from a range of providers.  At Moneyworks, Carey, Peter and Paul are part of that group.

However, since the day that Moneyworks was set up, we have provided full service financial advice.  What this means is that when we meet you, unless you only want information and assistance on your KiwiSaver or insurance needs, we will sit down with you and go through the following process:

  1. We will discuss your background, who you are, what your goals and dreams are and what your current financial situation is.
  2. We will then prepare a full financial plan for you, providing you with an independent analysis of what you need to do to achieve your goals (or alter your goals if they are unachievable), and a full review of your existing financial solutions to see if they are currently working for you, and will continue to in the future.  As you will be aware, your life changes regularly, so your needs from your financial solutions will continually change, but the financial solutions available are also in a state of continual flux.  Part of the financial plan is ensuring that you have enough insurance cover, and the right kind of insurance cover (life, trauma, income protection, mortgage repayment and health) and that you aren't paying too much, or have old outdated cover.  At Moneyworks we aim to get you insurance policies that have 'policy wording passbacks', so that your policy will keep up to date with developments and change and you don't have to keep on changing the insurance provider that you have.
  3. This financial plan generally covers the following areas:
    1. Statement of your details and where you are at.
    2. Cashflow analysis of the things you need to do to achieve your goals.
    3. Discussion about your arrangements for estate planning (Will, Enduring Power of Attorney, Family Trusts).
    4. Analysis of your financial solutions and recommendations for changes (if any), with reasons for the recommendations. These include
      1. KiwiSaver
      2. Existing investments
      3. Mortgage arrangements
      4. Life, Trauma, TPD, income protection, mortgage repayment and health insurances
    5. Steps to Take now to achieve your goals.
  4. When you receive your financial plan, you can decide to carry on working with us, or to implement the recommendations on your own. Most people decide to work with us, and this can happen on one of two ways, either you join us as a 'membership fee client', or we complete the changes and then keep in touch until you are ready for more assistance and advice.
  5. For the 154 people who work with us as Membership Fee Clients, a number of these people have worked with us for well over 10 years, with the longest clients having worked with us for nearly 19 years.  We meet the clients every year (generally at the same time each year) and go through a mini financial plan each year.  This is sent to them at least 5 working days prior to the meeting for them to review, and make notes and questions on.  When we meet we go through their questions and update the goals and objectives.
  6. Each year we have a particular project that we are working on to expand the financial security of our Membership Fee Clients.  Recent projects have included looking at clients Fire and General insurance (where we refer to a specialist broker), reviewing clients digital security and ensuring that our communication with them is a secure as possible.  During 2017 we are concentrating on analysing and discussing the role of technology in our clients (and their children's) lives and careers and their investments.

Financial planning is different to just 'financial advice'.  Financial planning is a full service, looking at everything, helping you by providing a framework in which you make decisions.  Some clients elect to ask our advice on all their decisions, the majority use the framework of the goals and objectives to work out what the impact of house renovations, extended overseas trip, or new car will have on those long term goals.

As a financial planner, our role is as a sounding board, as a mentor, as someone who can remind you of your goals, so that you can choose whether to change your goals, or make a decision that isn't going to have a negative impact on those goals. As well as that, we provide you with financial solutions (insurances, KiwiSaver, investments) that are reviewed annually.  We estimate that there are only around 30 or so advisers in New Zealand that are working in the way that we are - and we have three of them here at Moneyworks, with a Cambridge base.

If you have been thinking that now is the time to start planning for the rest of your life, contact us to organise a get together so we can see whether we would each like to work with each other.

Email: contact@moneyworks.co.nz

Phone: 0800 225 621

 



 

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