Farm boy finds health in wealth

Money Managers CEO Doug Somers-Edgar (right) with his director wife, Anne, and marketing director Al Scott. Picture / Martin Sykes

Lying in bed in Balfour near his Southland farm one day more than 20 years ago, a young Doug Somers-Edgar listened hard, fearing he was about to die.

"I was listening to whether my body took its next breath," recalls the 59-year-old farmer-turned-finance chief of the health struggle that almost took his life and led to a new career.

The young university graduate had everything to live for.

He had returned from Sydney to manage his family's farm on the Waimea Plains north of Gore. He had an Otago University bachelor of commerce and a partly completed masters degree from the University of New South Wales under his belt.

But his allergies to grains finally forced him to leave the land and set up the financial advisory group Money Managers.

"On the last year I was on the farm, there were 22 days I was able to work without being sick," he says.

But today Somers-Edgar is sitting pretty. Money Managers has grown from a couple of offices serving a few clients to a network of 50 franchises that offer financial advice and sell the group's funds. It looks after $2 billion of client investment, and family trust assets worth between $10 billion and $15 billion.

Although Somers-Edgar is planning to hand over this operation to a trusted deputy eventually, he is not slowing down. He plans the launch of a new insurance business next month and to take a swerve into a different cash crop - the ancient Chinese herbal root and health product ginseng. A prospectus for this venture was issued just this week.

Somers-Edgar is the second-eldest of four children. He went to Balfour Primary School and Gore High School, then took up an American Field Service scholarship to Iowa before going to Otago.

The four children inherited the 306ha sheep, beef and cropping property and Somers-Edgar remembers the delight of his father, Ralph, at his return.

As he slaps a table in a Money Managers meeting room overlooking a constantly buzzing Bush Rd roundabout at Albany, he recounts his father saying, "Good. Look after it," and promptly retiring.

The young Somers-Edgar had plenty to inspire him.

His father's tractor dealership did so well that Ford sent its executives to the Southland village to find the secret of its success.

"I remember the head of Ford tractor sales from England calling it the best country dealership in the world. It made a big impression on a small boy."

Somers-Edgar decided he, too, wanted to do well and vowed he would succeed.

He remembers taking over a run-down farm.

"Lots of gorse, poor pasture quality and gates falling off. I had often worked on the farm and farms around the area since I was 12, in shearing sheds all my school holidays."

But for his allergies he was well equipped for the task.

Alongside Somers-Edgar sits his wife, Anne, who is also a Money Managers director and owner of the business.

"People think it's worse in the summer with that condition, but it's actually worse in the winter because of allergies to stored grains," she says.

The couple met when he was studying in Sydney. There, he recalls, he worked three full-time jobs while Anne, from the lower Blue Mountains district outside Sydney, taught primary school with a weekend job as well.

They now have three children. Laura, 23, works at fund management research group FundSource, Tiffany, 21, is studying at university and Bonnie, 18, started at university this year.

The Somers-Edgar family sold the farm in 1982 and, after two years, moved to Auckland. The next year, the couple set up Money Managers, inspired by the family's Southland Ford franchise. In 1986, they were joined by Alasdair Scott, now the firm's marketing director.

Despite the steady rise in the business, Money Managers has not been without its detractors or failures.

It is hard to get historical information on Money Managers' funds, but a survey shows that most investors who have entrusted their cash to the firm are ahead, in the last year at least. (See sidebar).

Kapiti Coast sharebroker Chris Lee, with client funds of $600 million, is one of Somers-Edgar's more vociferous critics, claiming Money Managers' products are "high-rate, high-risk lending ... with rates not rewarding investors for taking this level of risk".

He says Somers-Edgar is "New Zealand's most successful commission salesman, a monumental achievement for a lad from Balfour without the more common banking or financial sector experience which most begin with".

In turn, Somers-Edgar says Lee's information is wrong and his criticism only started when a Money Managers office opened on the Kapiti Coast.

Somers-Edgar and Money Managers sued Lee, but the matter has since been settled.

Meanwhile, Somers-Edgar has on two occasions clashed with competitors over his long-standing Radio Pacific slot. Once he was found to have unfairly denigrated a competitor and in the other case he accused some financial advisers of stealing from their own clients.

After 19 years of using the show to promote the business, Somers-Edgar hung up his microphone late last year.

Then there have been brushes with regulators. In 2002, the Securities Commission banned his firm from offering contributory mortgages to clients for a year after releasing a hard-hitting report criticising the company's involvement in the financing of a Parliament St carpark and apartment development in central Auckland.

The commission found investors were misled over the value of the development and Money Managers had been acting as a contributory mortgage broker when it was not registered as such.

The boss who prides himself on being called avuncular carries on in spite of his many critics, saying issues like Parliament St and his controversial role in funding the Auckland high-rise apartment tower Metropolis are "long ago and history".

He has no plans to retire but names Scott as his eventual successor.

"I've been handing over progressively to Al for 10 years - it's just an evolution," says Somers-Edgar, who plays golf twice a week, turns 60 in June and credits allergy-free health to "good, clean living".

His latest investment is a swerve into agriculture, growing ginseng.

On a 43ha block near Rotorua, 60 million seedlings have been planted under 257km of shade cloth in a joint venture with kiwifruit grower Brian Sage called Ginseng NZ.

The company is seeking to raise $12 million from the public to fund operations and repay development loans on the venture.

The ginseng venture will see the boy from Balfour come full circle and return to his agricultural roots.