By Paul McBeth
Around this time of year many pundits like to pretend they know the rub of a thing or two and will put their proverbials on the block with some fool-hardy predictions of what's to come.
It's quite simple to make some educated guesses like pointing to a the looming Canterbury rebuild, a bubbling Auckland property market, and a reviving Australian construction sector and muse that some building firms may have a field day this year.
Some talking heads may latch on to the prospect of a growing Auckland population and lack of appropriate housing supply, speculating that it's probably not a bad idea to have yourself a rental or two in the City of Sails.
More internationally minded folk could point to the prospect of the big central banks continuing to roll out the printing presses, flooding global markets with money in search of a home, and pick the kiwi dollar to keep appreciating.
Still others might merely say there's no place safer than a bank, and by golly I've got my cash stowed away in a term deposit.
The problem with listening to the pundits is that it's all just smoke and mirrors.
If you seriously want to figure out what to do with your money this year, go pay someone to help you out, because if you rely on what talking heads in the media are saying you may as well put it all on a nag at the upcoming Wellington Cup.
Politicians and officials bemoan the lack of financial literacy in New Zealand and the limited use of plain English for your everyday investor to go through in offer documents.
In simple terms, that means we too often don't know what we're doing when it comes to making money, and we too often don't understand what we're buying when we invest.
And generally when you don't know what you're doing, you pay someone who does know to do it for you, or you get some training to learn it yourself.
It seems a no-brainer that if you don't know what you're doing when it comes to investing, you'd seek out some boffin proclaiming they do know a thing or two, right?
Well, until you consider how maligned most financial advisers are these days.
When you get headlines throwing the 'Ponzi' word around from the Ross Asset Management debacle, is it any wonder advisers are seen as snake-oil salesmen?
David Ross, whose group of funds management companies were frozen last year, has the dubious distinction of being the first Authorised Financial Adviser to have his licence suspended.
And that's just the start. His particular case has a long road to run, and for the rest of the financial advisory industry, the road to redemption in the public's eyes just got a bit steeper.
Rebuilding investor confidence has been one of those oft-bandied phrases the government uses when talking about the markets. But it takes more than mere words to get people back into the swing of things.
Politicians have already imposed a much tougher training and monitoring regime for advisers, and are in the final throes of re-writing securities law to make disclosure easier to understand.
However, the one thing that seems to me to be missing is something which deals with the fact so many people base their decisions on cost rather than quality of advice.
That's why advisers have relied so heavily on fees and commissions. Consumers simply don't want to pay for advice up-front.
Similarly, when you talk with most learned market researchers, they'll tell you that most funds make a fairly similar return and the biggest influence on an investor's final pay-out are fees.
Take a trip to see your local adviser and see if you can get them to give you a ball-park figure of what their advice might cost you. Then press them on what that would do to your final return. Make them put it into dollar terms for you.
If you can manage all that without them throwing a wobbly and they're not touting suspiciously phenomenal returns, then maybe you've found yourself a keeper.
So this year, try actually paying for advice when making your picks rather than going by what you read in the news, or being a cheapskate who dodges up-front advice fees for the endless dripping tap of investment managers' fees.
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