Frequently Asked Questions
CREATING EXTRAORDINARY RETIREMENTS
Where are meetings held?
Meeting location will be confirmed once the appointment is requested. However, if under certain circumstances this isn’t possible, we would potentially discuss alternative arrangements such as video call meetings or meetings at your home or workplace.
How can I book an initial meeting?
- We have the authority to make whole of market recommendations. Our solutions are therefore completely bespoke and completely tailored to your personal circumstances.
- We are regulated by the Financial Markets Authority (FMA). You can find our entry on the Financial Services Providers Register here:
What analysis and reports do you provide for comparing investment performance against appropriate benchmarks, peer groups, and our objectives?
In addition to our regular meetings, Savvy Wealth Advisers have an annual meeting with each client to review portfolio performance. The analysis summarises net returns after tax and fees and can include comparison with benchmarks and peers for the past one, three and five years.
How are investment assets protected from theft and embezzlement?
We utilize the FNZ investment custodial system. All cheques and money transfers are paid to the custodian (not to Savvy Wealth) and withdrawals can only be made to the bank account nominated by you.
The custodian also sends a transaction summary directly to you, on a 6-monthly basis. This summary itemises all portfolio transactions and is sent in addition to the quarterly reports you receive from Cambridge Partners. Furthermore, you are able to access your investment portfolio information online at any time.
Are service agreements and contracts in writing?
Yes. All our client service agreements are in writing. These agreements specify the custodian’s and Cambridge Partners’ obligations and responsibilities to clients.
Furthermore, we prepare an investment policy statement tailored to each client’s requirements, which specifies how their investments are to be managed and what our responsibilities are.
- Do you offer free initial consultations before clients decide to proceed?
Great financial planning advice is based on building a lifetime relationship with you, one built on trust and commitment, where we can really make a difference to you and help you achieve your goals. The start is an initial meeting (in person or by Zoom), at no cost to you and with no obligation to proceed. It’s designed so we can find out more about your situation and what you’re looking for, for you to see how we work, if we can add real value and are the right adviser for you, and ultimately if it makes sense to carry on the conversation as the start of a lifetime relationship.
- We start with an initial no-obligation chat, at our cost. If we’re the right firm for you, and we can add significant value, we would then have a follow-up ‘getting to know you’ meeting (again at no cost) at which point we’ll find out more around your values, who and what is important to you, your lifetime goals and objectives. We’ll confirm by email our understanding of your situation and what you want to achieve, and the fees for engaging our services to develop your personal financial plan. Once you engage us, we’ll set to work, gathering more information as needed, analysing and developing our recommendations, and presenting them to you in your personal Financial & Investment Plan. Once you’re happy to proceed, you’ll then engage us to implement the agreed recommendations – the start of a lifetime journey together. You can find more details on our process here.
- What is the minimum timeframe for your investments?
Most of our clients want to invest for the medium to long-term and want to work with an adviser over their lifetime. Our advice is generally provided on that basis, and the portfolios are designed to work over several years. We do not provide short-term ‘plan only’ advice. Sometimes clients with longer-term portfolios may want to invest some of their funds for a shorter time, to fund for example children’s education, and we are happy to provide this.
We adhere to an asset class investment philosophy. This style is contrary to the traditional “active management approach” employed by brokers and most other financial planners, whereby individual securities and investment managers are selected to outperform the market.
Since the early 1980s a significant body of academic research has amassed to consistently show that approximately 80% of all fund managers deliver below market performance once the effect of their fees and expenses are taken into account. Furthermore, the top 20% of fund managers vary from year to year. This makes trying to pick next year’s top performers a risky strategy, and in our view likely to lead to subpar returns.
An asset class strategy aims to deliver the returns from each asset class with minimal costs. If executed correctly it ensures investors are appropriately rewarded for the investment risks, they take. The benefits of this approach are broad diversification – you will own approximately 8,000 different companies and assets; reduced volatility; lower risk; lower fees, and enhanced returns.
A summary of the principles we use when building investment portfolios can be found under the investment philosophy section of the website.
Depending on a client’s risk tolerance, objectives and time frames, we structure our clients’ portfolios with a differing allocation to growth assets (e.g., shares) and income assets (e.g., fixed interest).
To implement this strategy, a mix of low-cost managed funds are used for most client portfolios.
We employ a number of filters before selecting investments. These filters mean that certain assets are excluded from our standard portfolios.
Taxation can be one of the biggest deductions from your investment portfolio, so it is important to structure investment strategies to reduce tax liabilities.
As part of our reporting package, our custodian (FNZ) provides comprehensive tax reporting for investment portfolios. This consolidated reporting helps to simplify tax return preparation and reduce the cost of administering clients’ financial affairs. This includes the options for taxation on the Foreign Investment Funds.
However, whilst tax efficiency is an objective, it must be balanced with the other priorities of the portfolio – including diversification, liquidity, expenses, and adherence to the strategic asset allocation.
Yes. We offer a range of nine standard model portfolios as well as nine standard Socially Responsible Investing (SRI) portfolios that are designed to suit a range of investor needs.
Information on our standard and SRI model portfolios can be found in the portfolio page. To find out more about our bespoke portfolios the adviser.
We believe the evidence is clear that it is not possible to consistently pick winners or time markets. Most ‘active’ stock-pickers under-perform their benchmarks. For example, in the US, in the 10 years to 31 December 2020, only 16% of managers beat the key benchmark (source S&P SPIVA report 31/12/20). https://www.consilium.co.nz/news-insights/spiva-the-surprising-results-and-what-it-means-for-you.
In contrast, ‘passive’ or index investing assumes that markets are efficient and doesn’t try to time markets or pick winners. This approach chooses investments that are broadly representative of the markets. Because it doesn’t need teams of expensive analysis, index funds are much cheaper than stock-picking funds, one reason why they generally out-perform.
Savvy Wealth Fees
No. The initial meeting is a chance for us to get to know each other. It’s at our expense and without obligation; it’s simply an opportunity for us to find out whether we can help you.
The fee depends upon the complexity of your situation, the scope of the advice proposed and the anticipated time cost. For a full breakdown of our fees, see the important information here.
We will sometimes agree to receive a commission from KiwiSaver providers. For a full breakdown of our fees, visit our fees page.
Yes. We are a GST registered company. Some commissions and costs are exempt from GST.
Savvy Wealth charges clients a fee based on the value of the Assets under Management. This fee reduces on a sliding scale for larger portfolios, and the fees specific to your circumstances will be detailed by our advisers as part of the initial discussion.
To further protect client assets and to simplify administration, investment assets are held by FNZ Custodians Limited. These fees are tax deductible.
Savvy Wealth employs low cost, low turnover institutional funds, most of which are not available to retail investors. The weighted average fund manager fees for the total portfolio are approximately 0.40% gross p.a.
Adviser and custodial fees are charged in accordance with a sliding scale related to portfolio size. Fees accrue at the agreed annual rate and are deducted from the portfolio monthly. Please note that a minimum annual fee per annum may apply.
The fund manager fees are deducted at the fund manager level and reported to us, also quarterly. Savvy Wealth monitors the total true cost of delivery carefully – as this ensures an enhanced net return for our clients – and all fees will be detailed by your adviser prior to proceeding.
Nil. In our view, performance-based management fees primarily reward the investment manager and not the client. Furthermore, they detract from the net performance to the client over the longer term. (This excludes the Generate KiwiSaver Focused Growth Fund)
We do have some clients looking to grow wealth to fund their lifestyle, through a combination of KiwiSaver and regular significant savings. Because we provide an integrated financial planning service, and this takes time, we do have a minimum fee for working with us of $1,500 pa (+ GST). This generally means you’ll be on a high income with little or no debt and able to save $2,000 per month or more.