by MARY HOLM
Q. We're looking for a financial adviser and take it that you do not work with individual clients.
Can you recommend any good ones in Auckland, or how we could go about finding one? (We've looked in the Yellow Pages and feel none the wiser.)
A. It is rather hard to judge integrity and knowledge from an ad.
You're right, I don't work with clients. And I don't feel in a position to recommend individual financial advisers, as I've never used one myself.
But I'll try to steer you in the right direction.
Plenty has been written about how to find an adviser. I could fill this page with tips and suggested questions to ask.
But it's more efficient to tell you about those who have already written the tips and questions. You can read their advice and note what particularly matters to you.
Those without access to the internet can get the Retirement Commission's free "Sorted Offline" brochure pack.
The pack has five brochures on goal-setting/budgeting, saving, managing debt, investing and retirement, which are summaries of information on the commission's website,
.
The Investing brochure includes a section on how to get financial advice, and important questions to ask potential advisers.
You can get the brochure pack by phoning 0800 GET SORTED (438-767) or from public libraries and Citizens Advice Bureaus. Or you could ask a friend to email for it, to
.
There's more detail, though, on the Sorted website. Click on "Investing", then on "Checklist" for financial advice and "How financial advisers get paid".
Another useful website is
. Click on "Find an Adviser", which lists advisers by region and suggests questions to ask an adviser.
A few additional points:
* Ask friends, relatives, workmates or anyone you know for recommendations of advisers they have been with for more than a couple of years.
Then ask them why they like the adviser. You don't necessarily need someone who is nice, but someone who has proved his or her competence and trustworthiness.
* Obtain copies of the disclosure documents advisers must give you, and read them thoroughly, preferably before meeting an adviser. Ask about anything that puzzles you.
* Pay particular attention to how the adviser and his or her boss are rewarded.
I don't want to reopen the long-running debate we had in this column this year about the best fee or commission system.
But it's important that you know who else will give the adviser money - upfront or progressively - if you go ahead with the investments she or he recommends.
Ask them if they have any relationships with product providers.
Also ask if they receive any non-monetary rewards, such as trips, for selling any of the products they are recommending to you. That could obviously influence their decisions.
* Watch to see if the adviser asks you, early on, if you have a mortgage or other debt.
A good adviser should recommend that you pay off high-interest debt before investing - even though that might do them out of some business because you won't invest the money through them.
And they all should at least discuss with you repaying your mortgage before investing - although for some people there's a good argument for doing a bit of both.
* Take notes on what advisers tell you. It gives you a record for later, and no doubt spurs them on to be thorough in what they say.
* If you feel reluctant to ask certain questions or take notes, take a friend with you who will ask. It's really important not to be intimidated.
* * *
Q. Quite plain and simple, never sell a rental property - never sell.
Telling that person, a couple of weeks ago, to sell their rentals is the worst advice ever.
Are you financially free yourself? If not, then please refrain from giving such insane advice in the future.
A. And a Merry Christmas to you, too.
I'm not sure what you mean by "financially free". But it seems that, if I am FF, it's okay for me to give insane advice; but if I'm not FF, it's not okay. Hmmm.
Getting to the point of your letter, a wise old editor once said to me, "Never say never".
I agree that it's not a good idea to sell a rental property in a panic because the market has dipped. But there are all sorts of situations in which it makes sense to sell.
Not infrequently, a heavily mortgaged landlord's rental income is not much more than expenses for many years. Sometimes it's less.
The investment gives them a return only when they sell - quite often a handsome return because of the gearing.
Other times, people just get sick of the hassles of being a landlord. Or they want to diversify into other investments.
Stick to your rentals, by all means. But it's dangerous to assume others should always do the same.
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Q. First, I would like to thank the Herald for making your column available each week to readers.
I have been investing and saving for the last 50 years, right from the first time I saved my sixpences I was given to spend when I went to the pictures.
I have taken hits from investing in the stock market and purchasing property, and like everyone else, have had the ups and downs.
I have no affiliations to any camp, just a Mr Joe Ordinary investor who has been lucky enough to be a saver and have some money saved for retirement.
But having followed your writings for a few years now, I would like to congratulate you on an excellent column. I find that you give a balanced view in the answers to people's questions and back up these views with sound reasoning.
I enjoy how you try to tailor individual, carefully considered answers to meet the needs of the readers' questions. For this they must be truly grateful.
I sincerely hope that you will not be so modest as to refrain from printing this letter. Long may you continue to help those people who seek your wisdom and experience.
A. Your letter really touched me.
I hesitated to include it in the column - it seems rather self-serving. In the end, my boss at the Herald said I ought to, as I run almost every critical letter I get.
So many thanks to you, and to all the others who have made kind comments.
* * *
Q. I am retired and I enjoy playing with Excel worksheets.
The attached Excel worksheets on retirement fund calculations may be of some interest to readers.
I have no objection to you publishing my email address (
) in your column, and I will send a copy via email if requested by a reader.
A. This is even better - a reader offering other readers a Christmas present.
Using the worksheets, you can calculate:
* The lump sum required to receive a certain amount of retirement income.
* How long a given lump sum will provide you with regular income.
* How much you will get in year one of retirement if you have a given lump sum.
You don't have to be about to retire. You key in the number of years before you expect to retire, your estimate of inflation, your return on savings and so on.
Clearly, this is for those who love to play around with numbers. And you don't need to be trained in Excel to use it.
While you can do some of these calculations on websites such as the already mentioned Sorted, these worksheets might suit you better.
The sender says he is retired. I wonder if he lives at the North Pole.
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So many letters so little space
Money Matters is taking a break until January 24.
Each year at this time I find myself saying sorry to those whose letters didn't make it into the paper. And each year that number grows.
I don't mind too much if, as occasionally happens, the question looks like something set by a university lecturer. Nice try, but I'm not here to answer assignments!
Nor is it too worrying if I skip a question similar to one I've already answered recently. Or one that is so complex it would take weeks of research and pages to answer. Or one that is so specific that few other readers would learn anything from it.
I do feel bad, though, about the many others that just don't make it to the top of the pile.
That's why I chose the letter that leads today's column. Many of you, having gathered your thoughts and sent me your questions, may want to seek advice elsewhere.
And I do want to thank you all for writing, whether or not your letter is published. That also applies to those who challenge or disagree with what I say. I learn from you, and I hope the reverse is sometimes true, too!
A final end-of-year note:
* To the couple who wrote: "We love your columns and love you too, please tell us what to do. Sounds almost like poetry". Only almost.
* A while back, I received the following email from a Herald subeditor: "When I ran your column through the spellchecker, it suggested that the reader who likes to spend Saturdays in bed with a cuppa really likes to spend them in bed with a 'cabby'. Now there's an image."
Here's to lots of days in bed with a cuppa, cabby or whatever tickles your fancy over the next few weeks.
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The former socialite had maintained suppression despite having been in prison since 2022.