Financial literacy – Craig and ‘disciples’

shiny things may not necessarily be gold..

“Money is an enabler.. not the purpose – unless you’ve perhaps got your priorities wrong”

Does investment advice mean better returns (after charges)?

Article outline:

  • Moneyweek NZ – Christchurch events.
      • Craigs Investment Partners.
  • Money or life?
  • Consider being a Fool!
  • Feline ways..

Craigs Investment Partners ran an investing for beginners seminar, and after some gentle reminding of my registration, they got me enrolled in one earlier this month. Divided into two workshop/ presentations: Introduction to Investing, and Key Principles of Investing, Martin our host took us on a journey into the mysterious and magical* world of investment. *My words.

The Canterbury Club is a building I’ve always wanted to have a look inside, and as venue for the workshops was just perfect. Martin was an amiable, knowledgeable and friendly host to a diverse group of interesteds. Knowledge is power, and he freely gave some sound general information to us, over cut sandwiches and light refreshments.

He made a good pitch for heading the Craigs investment way. Unrivalled investment research through internationally renowned partner banks and organisations. Personalised solutions tailored to your unique circumstances, impressive historical graphs of stock market performance, and even a little bit about the cost of of that service being worth the quality of advice. Saver, speculator or investor – which were we?

Some people are pessimists, some optimists, but with a little basic background knowledge in investments I’d say I am a pragmatist. Weighing up the risks, looking perhaps a little wider than what could be taken as a gentle pitch for business. What’s in it for the investment advisors? What is the effect of charges on performance? What proof do you have that investment advice outperforms stock market index trackers sufficient to pay for the cost of advice? Would you consider fee-based advice instead of commission (including initial and annual renewal)? Would you consider performance only based remuneration?

My head came away spinning, not with the general investment picture given, but the sight of the many charges/ margins thinly sliced here and there that mean any investment faces an uphill challenge to ‘beat the market’. Solid introduction given, good review of the regulatory framework within which authorised financial advisors operate in NZ, but it felt a little bit like being read my rights in an American CSI episode. Required but then moving onto more important things – the glitz, the longer term prize, the shiny baubles of the pro’s holding my hand now and in the future.

Thinking about both talks I came away with the realisation that caveat emptor (buyer beware) applies to most things in life, and that it’s life that’s the important investment we should make rather than concentrating too hard on the money side of things. Natural balance between the two certainly. I’ll cover an outsiders street view of the regulatory framework in the near future.

It was telling that my thoughts drifted to the things that bring joy to life. Money is an enabler of some of those things. Too many people stick their heads in the sand when it comes to managing their money, it’s easy for fools to be separated from their hard earned, and more knowledge is certainly better. I only wish that investing didn’t have such a bad rap/ exclusive feel. If you’ve got a pension pot building up somewhere you’re an investor, same too with a property (or two), a car, consumer objects.

The ridiculously high regard that residential property investment has in NZ is perhaps a reflection of the shoddy treatment that ‘Mum and Dad’ investors have historically had at the hands of ‘investment professionals’ in the past. One of the warning signs they looked past was the charisma and rapport of the ‘stars’ promoting various finance company schemes. Much was made in the workshops about rapport between adviser and client…

A fellow attendee posed perhaps the most critical point of the evenings, along the lines of:

“What makes a good investment”

The Motley Fool website answers that one quite neatly, summing up that investing in yourself,  earning potential/ personal development/ professional growth is perhaps the best value for money invested that you can get. So, more workshops to test! I’ll report back with more findings..

As to whether professional investment advice pays its way to greater returns (less higher charges), I’ll say the jury’s out, however have a read of this comparative link:

Spoiler: the cat (yes I said cat) is 2nd placed on investment returns..

©David Binstead 2012. All rights reserved.

One of an occasional series of posts related to ‘financial literacy‘, for individuals, companies, and the community at large.

Moneyweek NZ was a blink and you’ll miss it opportunity, outside the Northern Capitals at least. A couple events in Christchurch piqued my interest sufficient to register and attend. I’m all for business reaching out to the community at large, offering taster sessions to inform, educate, and even perhaps entertain (please, just a little bit!). Let’s hope next year is a bit more visible.

Craigs Investment Partners:


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