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The key focus of Alliott Investments is the prudent and disciplined approach to the creation and protection of our clients wealth.
A number of people have mentioned in this last month the case of the ASB investment adviser, Mr Versalko, who has admitted he stole over $17m from wealthy clients. Apparently it went undetected at the bank for 9 years. People have asked, “How could this happen and could it happen to me?”
There is a golden rule.
Do not give your money to the same party from which you get advice about where to invest the money.
Making out your cheque to the trust account of your adviser can be highly risky, even if that adviser is with a large institution.
This separation of role and function is prudent and I always recommend it. One person advises you (or manages the investment decisions) but another ‘handles’ the money and administers the investments. You may be the administrator, which is fine, but often we use independent ‘custodial’ services providers where clients prefer that.
With proper separation, each of the parties employed to serve your interests watches the other. There is cross-checking in place and if you, the investor, ever have reason for doubt or concern about what is going on, you can always ask the other party for verification.
We use custodians outside of Auckland, and that is another plus for our clients – the relationships are kept professional and not too close. It is one thing to manipulate all the steps in the investment process when it all happens within the one organisation (presumably why Mr Versalko could hide things for 9 years). But to get two or more people in completely independent organisations to collaborate in a fraud is very hard. And when those organisations are in different cities, using different systems – it would be nigh on impossible. I cannot think of any case where that has happened.
If you have any concerns about the cross-checks and safe processes that keep your money protected, we can often provide good advice.
Email db@alliott.co.nz or phone Alliott's on (09) 520 9200 and ask for David Burt, Alliott Investments Limited.
With the introduction of KiwiSaver and the various tax credits, a number of shareholder employees moved onto a PAYE salary format. This created the opportunity to maximise the subsidies provided by the Government for KiwiSaver investors. This may have created a gap in your personal disability cover.
A key point is that ACC payments are based on 80% of the declared PAYE salary. For some people, there is a significant gap between their PAYE salary and their total earnings. Should they be off work due to injury, their maybe a significant difference between what ACC pays (80% of PAYE salary) and what their actual earnings have been. This may lead over time to financial strain.
A possible solution to this issue is to implement an income protection policy to cover the difference between what ACC pays and total earnings. In addition, the income protection policy covers both illness and injury.
Talk to our income protection and ACC cover expert Gerard Gill - contact him at Alliott's on (09) 520 9200 or gg@alliott.co.nz.
Gerard is an insurance consultant who operates his own independent brokerage company specialising in both business and personal risk protection and KiwiSaver advice.
In 2008 and 2009 Gerard was named Professional Investment Services (NZ) Adviser of the Year.
David is an independent investment specialist with responsibility for managing portfolios for many of Alliott NZ's clients.
He offers a consultancy service advising on such matters as reviewing the investment strategies of a family trust, appraising managed portfolios and calculating retirement or other personal funding needs.
David also can assist with the migration of UK pension funds to New Zealand and has found that, in most cases, a proportion of the funds can be immediately freed up as ready cash.
David Burt’s Disclosure Statement is available free of charge upon request.
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