Welcome to our Christmas Newsletter. I know we say it every year but hasn’t this year just flown by? Must be getting old!

The aim within our Newsletters remains that we only want to inform you of issues that could have an effect on your financial wellbeing. In this episode we discuss:

• KiwiSaver Transfers
• Life Cover Savings
• Cancellation of Lifestyle, Family and Mortgage Protection policies
• Financial Advisers Act (FAA)

1. KiwiSaver Transfers

It has become apparent recently that Banks are aggressively targeting the transfer of KiwiSaver Accounts to themselves whilst disregarding the clients’ best interests. A number of clients have been ‘encouraged’ to transfer their KiwiSavers only for subsequent enquiries to reveal that they have been transferred to poorer performing funds and in many cases put to the wrong investment portfolio. Our KiwiSaver provider of choice – Fidelity Life has performed extremely well since the inception of KiwiSaver two years ago and indeed has the top performing funds in a number of investment categories as per returns below.

We recommend that, prior to committing to changing KiwiSaver providers, you speak with one of our consultants to get an honest appraisal on the merits of changing.

In addition, Banks are also aggressively targeting Lifestyle, Family and Mortgage Protection Insurance. Twice in the last month we have seen Banks recommend plans to our clients which have been far inferior to those already held. They recommend these plans without making clients aware of the deficiencies of their recommended cover and the possible consequences at claim time and without providing an Advice of Replacement Business which is a mandatory requirement under Investment, Savings and Insurance Association rules. Again, we strongly recommend, prior to committing to bank cover, you sit down with us to explore the relative merits of the cover.

For those of you that already have Bank Cover, we recommend that you make a New Years resolution to sit down with one of our consultants to compare the cover you have, with that available in the marketplace. YOU MIGHT GET A SHOCK!

If you are looking for some additional information on this topic or wish to arrange an appointment with one of our consultants CONTACT US NOW.

2. Life Cover Savings

It has been confirmed that as at 1 ^st July 2010, the way that Life Companies are taxed is to change. As a consequence, it appears that the cost of Life Cover will increase by around 15% - 20%. We feel it is important to inform you of the options you have available to combat this.

We believe it may be a good time to consider locking in some of your Life Insurance premiums. Locking in your premiums is similar to a fixed rate home loan, in the sense that you will be protected against future premium increases. Locking in your premiums now can save you thousands and thousands of dollars during your lifetime. In addition, it will ensure that you can continue to afford your premiums as you get older.

LEVEL PREMIUM - BENEFITS TO CLIENTS

The Premium allows you to be able to afford life cover whenever you need it.

• Premium certainty (cost known) through rate guarantees until age 80
• Affordability when needed most
• Substantially lower costs
• Lock in Health i.e. Buy once only
• Be rated at the age you buy life cover
• Premium rates affordable now through to age 80
• To age 80 (renewable to 100)
• Diminishing cost in real term
• Certainty of funding
• Succession Planning
• Children can pay premium

Early in the New Year, we will be contacting clients who we feel may benefit from levelling some or all of their Life Cover, to arrange a time to sit down and discuss this further. At this meeting we will look at your circumstances to see if you would benefit by moving to a level premium. I urge you to take the opportunity to sit down with us – it may save you thousands of dollars!

If you wish to make an appointment to discuss this with one of our consultants CONTACT US NOW.

3. Cancelling Lifestyle, Family and Mortgage Protection

Unfortunately we have recently been made aware of two cases where clients have cancelled their Lifestyle, Family and Mortgage Protection only to subsequently regret their decision after life threw them a ‘curve ball’.

Prior to cancelling cover, please give us a call as often we can find ways of ‘fine-tuning’ your cover to reduce costs whilst ensuring that you remain covered.

CONTACT US NOW

4. FINANCIAL ADVISERS ACT (FAA)

As you may be aware the Financial Services industry is in the midst of some regulatory changes. The Financial Advisers Act is being implemented to develop a financial advisor Code of Conduct. This will set minimum professional standards of competence, knowledge and skill, ethical behaviour and client care, as well as minimum requirements for continuing education and training.

We believe it is long overdue, will be of benefit to both the consumer and the industry and we are excited about incorporating the requirements of the Act within our existing work practices and systems. It is reassuring to us at Superannuation New Zealand/Christchurch Insurance Centre to see that most of the provisions within the discussion documents are already incorporated within our practices.

Please be aware that, due to  you may find that some of the services we previously offered, in particular those offered over the telephone, such as fund values and certain levels of advice will no longer be available. If we are unable to discuss something over the telephone we will arrange a time to meet with one of our consultants to discuss face-to-face. Your understanding around these issues is appreciated.

Our office will close on 23rd December and reopen on 11th January.

We wish you all a very Merry Christmas and a happy New Year.

Warm regards,

All the team at Christchurch Insurance Centre / Superannuation NZ