Wealth Creation

Investment Advice - Andrew Robinson, Director and Investment Strategist

There is an important and profound difference between income and wealth. The two are not synonymous by any stretch of the imagination. Those who believe otherwise, do so at their peril.

The key to wealth creation lies not in how much you earn, but in what you do with what you earn.

Wealth can be defined as a portfolio of assets that increase in value in order to produce an income for its owner. For this reason, you should not consider assets such as a car or a boat as an asset.

To create wealth for yourself, you need to build up a portfolio of assets. For a professional person, the key consideration in creating wealth should be to have something with which to substitute income should you lose your ability to generate it yourself, either through death, disability or old age.

You create wealth for these types of circumstances through a combination of risk cover and investments.

You need to decide where to invest your savings, depending on factors such as how much risk you can afford to take, how long you can wait for your investment returns, what tax implications you need to take into account, ownership issues and what your expected returns will be.

Our key philosophies in giving investment advice are:

Independence. Strategic Planning Group Limited was formed by a like-minded group of individuals who have a strong belief in offering truly independent advice. On the investment side of the business I believe that this is crucial. The vast majority of advisers in New Zealand compromise their clients' growth potential via utilising investment options that are inefficient, expensive and poorly performing because they have agreements with certain banks, insurance companies or fund managers to place monies with them.

Strategic Planning Group Limited offers truly independent advice on your investment portfolio, having access to the whole market-place of investment product, fitting suitable solutions to your objectives, timeframes and risk profile.

Proactive advice. A criticism that I personally have of investment advice in New Zealand is the lack of proactive advice. Advisers are all too keen to get investors to part with their monies but often invest them into underperforming managed funds which have a high fee structure and are inefficient in terms of their underlying structure.

Strategic Planning Group Limited will proactively manage your portfolio, providing advice on both when to buy and when to sell (to lock-in profits made and maximise wealth creation).

Core/Satellite Approach. Many advisers, as mentioned above, will place monies in an off-the-shelf managed fund product and hope for performance to beat bank term deposit rates over the longer-term. Individual fund managers struggle to outperform the market over time. There is plenty of empirical evidence to support this view.

In the portfolios that we at Strategic Planning Group Limited create we manage these in a Core/Satellite approach, that is, you will have an exposure to a core fund where regular savings could be directed (upper quartile performance, deductible fees, tax efficient structure, wide spread of underlying investments) and a range of satellite investments which might include direct shares, holdings in private enterprise companies, investment property, currency investments, one-off capital protected investments and fixed interest options. It is these satellite investments that will create the most wealth over time. These are selected to match your objectives, timeframes and risk profile.

Minimising Fees and Maximising Tax Efficiency. Fees and tax eat away at your wealth over time. Strategic Planning Group Limited offers advice to minimise fees (and make them deductible as an expense) and to maximise tax efficiencies of holdings held within a portfolio.

Communication. Clients receive topical e-mails, monthly updates and comprehensive twice yearly reporting which include tax and fee summaries. Clients are able to view portfolios on-line if they wish to do so.

Beating the Bank on Fixed Term Rates. Once wealth has been created it needs to be protected. Simply holding monies in the bank is not sensible. Strategic Planning Group Limited offers advice on sensible fixed term investments that will gain you a premium in interest over bank term deposits.

Further Information

For further advice on services offered by Strategic Planning Group Limited to help you create wealth or protect your wealth, please contact me:

telephone: +64 9 525 3300
fax: +64 9 525 3304
email: andrew@spgroup.co.nz
14 New Bond Street, Auckland, New Zealand
PO Box 24 542 Royal Oak, Auckland, New Zealand

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