The Financial Adviser Act 2008 introduced an authorisation process to control who can and can’t provide financial advice. This has also caused some confusion, particularly for investors who are seeking financial advice. There are 3 categories AFA – Authorised Financial Adviser RFA – Registered Financial Adviser QFEA – Qualifying Financial Entity Adviser Authorised Financial Advisers (AFA) AFAs are registered on the Financial Services Provider Register and belong to a Disputes Resolution Scheme. They also go through a more rigorous approval process by the Financial Markets Authority and have higher competency standards. Authorised Financial Advisers can provide personalised advice on complex investments, such as shares, bonds, futures contracts etc as well as what RFA and QFEAs can advise on (discussed below). Typical clients are individual investors, trusts and companies. Authorised financial advisers must follow the code of professional conduct. (Roger, Jack and myself are AFAs and are Certified Financial Planners) Registered Financial Advisers RFAs are required to be registered on the Financial Services Provider Register and belong to a Disputes Resolution Scheme, they are not ‘authorised’ by the Financial Markets Authority. […]
Bonds are typically a word most investors have heard of, but it is an investment that is not fully understood. Shares however, are generally well understood, investors know they can fluctuate in value, they sometimes pay a dividend, they can be risky. Bonds are seen as ‘safer’ investment options, but that is not always the case. Bonds versus Term Deposits Comparing a bond to a term deposit from a major bank; a term deposit is an agreement from the investor to lend a specified amount of money to the bank, with an agreed interest rate, with agreed repayment terms. Throughout the term of the investment, the investor will receive interest on monthly, quarterly or at maturity of the investment. If the investor wishes to receive their money back, prior to the maturity of the investment, the bank will penalise the investor (for breaking their contract) by reducing the amount of interest which is to be paid. In New Zealand, this can turn a 4.5% interest rate (per annum), to a 1.5% interest rate by penalising the lender 3% of the […]
The information provided in this email is general only. It does not take into account the investment objectives, financial situation or particular needs of any person and may not be appropriate for your requirements. We strongly suggest that investors consult a financial adviser prior to making any investment decision.