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Contacting us over the holiday season

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Wherever and however you spend this holiday period, we wish you a safe and Merry Christmas and a prosperous New Year from all of us.  And as we head into Christmas and the summer break – baches, BBQs, beaches and ice-cream – we hope you get it all, and more, this summer!

Our offices will close at lunch time on Friday 23 December and will re-open again on Wednesday 4 January. We will however, have contact details of staff listed for emergency or urgent situations available, just call 0800 438 238 or email us.

Economic round up from our colleagues at AMP Capital

It has been an unusual year in global politics, with Donald Trump’s presidential victory and the United Kingdom voting to leave the European Union.

Click here to watch a video and see what AMP Chief Economist Bevan Graham had to say about the effect these decisions could have on the average Kiwi.

 New Zealand Insights

The New Zealand economy has continued to perform well. GDP growth is looking more solid and is expected to hold at around the 3.5% level over the next few quarters. The positives of stronger commodity (ex-dairy) prices, population growth, tourism inflows and record low interest rates have underpinned solid activity and more than offset the headwinds of weak dairy prices and a strong exchange rate.

Household consumption continues to be the biggest contributor to growth as low interest rates, strong gains in labour income, rising house prices and strong population gains all serve to boost consumer spending. Strong and rising tourism inflows are also supporting the retail sector.
 
Read the latest Investment Insights from AMP Capital's Investment Strategy team.

How we’ve helped our clients

Don't underestimate the need to survive both cancer, and the stress it causes

Kiwi's are 2.6 times more likely to suffer serious illness putting a person off work for six months or more, than we are an accident1.

A casual conversation with a long-term client Olivia* alerted AdviceFirst adviser Murray Pierce to the fact that she'd had breast cancer surgery six months earlier. Olivia has since made a full recovery, but she was still paid out more than $60,000 by her insurer, thanks to Murray.

"I knew that Olivia had a trauma policy, but it didn't occur to her that she could claim on that trauma policy even though she had recovered. Once she told me about it, I could get it sorted for her. Trauma insurance is there to help see you through the disruption these events cause," says Murray.

The number of people in New Zealand who have survived for five years after initial cancer diagnosis rose from 57.7% to 63.3%in 2015, but a lot of ongoing damage can be caused by the stress, the disruption to family life, time off work and sometimes even job loss.

"The collateral damage that a trauma event does to family and friends is significant. Money from an insurer can be used in many ways, including paying for extra support, buying time to recover or flying family back from overseas. Traumatic events cause physical stress and financial stress, but at least we can help with the latter," says Murray.

To find out how trauma insurance can help you get through unexpected events like cancer or serious accidents, talk to an adviser today about what policy is best for you.

1The Financial Services Council (FSC) Income Study 2013
2Ministry of Health, Cancer Patient Survival 1994-2011. Published online 14 April 2015.

Insurance company steps in after ACC stops payments

At least a quarter of Kiwis mistakenly believe that we are more likely to suffer an accident (and get support from ACC) than we are a serious illness.3

When Simon* had a serious car accident which meant he couldn’t work, ACC stepped in to cover him for 80% of his earnings. At first all went fine, until ACC made the decision that he was fit to return to work, and stopped payment.

AdviceFirst adviser James Polson says the overall journey for Simon was harrowing because he had been on and off ACC for more than two-and-a-half years, after finding and starting two different jobs. In both jobs, he was unable to complete the trial period due to ongoing and reoccurring health reasons related to his accident.

Fortunately, Simon had been part of an employee benefit insurance scheme before his accident, which undertook to provide 75% of his income for a maximum period of five years, should he be unable to work for medical reasons, due to illness or injury. This meant Simon’s income protection insurance stepped in after ACC payments stopped.

"We approached his insurer and they put Simon through an intensive medical, psychiatric and physiological evaluation before their medical experts concluded that he was indeed unable to work in his usual occupation for medical reasons. The insurer is now paying Simon 75% of his previous earnings, and will do so for up to five years or until he is able to return to a job based on his usual occupation (whichever comes first). The insurance company is also talking to ACC about resuming its support for Simon," says James.

Don't have personal insurance? Still relying on ACC? For a personal evaluation for income protection, contact one of our advisers for an obligation free chat.

3 The Financial Services Council (FSC) Insurance Gap investigation surveyed 2,000 New Zealand households in 2011

*Please note we have changed the names of clients in these stories to protect identities.
The policy document sets out the terms and conditions of cover, including prescribed waiting or survival periods, definitions and exclusions. 

*Please note we have changed the names of clients in the stories below to protect identities.
The policy document sets out the terms and conditions of cover, including prescribed waiting or survival periods, definitions and exclusions.

Trump, Brexit and earthquakes – what next?

In a few weeks, on January 20, Donald Trump will become the 45th President of the United States of America, and in March the Prime Minister of Britain, Theresa May, may – or may not – trigger Article 50 to signal the withdrawal of the UK from the European Union. The future it seems is uncertain, but this is nothing new.

Media and various experts predicted Britain would not vote to exit Europe and that Donald Trump wouldn't win and, if he did, major disruption would result. 

Britain did vote to exit, and Trump did win. And yet global shares are up overall this year.

Meanwhile, in the UK some media are predicting a food crisis, the abandonment of Britain by corporate companies and that tougher immigration will harm the economy in 2017 – dire warnings that have a similar tone to those that worried about a Trump victory. 

Trump's policies are expected to introduce infrastructure spending, tax cuts and reduced regulation, while some financial experts argue that Brexit is New Zealand's big opportunity to offset any negatives from Trump abandoning the TPP. But this is far from certain, just as a rise in bond rates is tipped to contribute to higher inflation. Nobody knows until it happens.

Here in New Zealand we've been hit by a series of earthquakes which, as terrible, disruptive and tragic as they are, will stimulate the economy through infrastructure spending. Is that the end of it? Again, we simply don't know.

Ignore the hype and plan in 2017


Hype is a very real issue in today's markets, but recent examples of how the polls and the media can get the big questions wrong in their pursuit of headlines demonstrates that much of the hype needs to be taken with a pinch of salt. 

Despite all the experts, nobody knows what the future holds and therefore it is prudent to stick to a plan that works for you and your risk tolerance - one that is based on your dreams, needs and goals. 

What you need and aspire to is not as fickle as the financial markets. A good financial plan is like a well-built boat designed to navigate all kinds of seas enabling you to stay on course to achieve your financial goals.

General Insurance embargo across central New Zealand still in place

An embargo by most insurers on new insurance policies for property such as commercial buildings, houses and motor vehicles – which extends from lower North Island to just north of Christchurch – is not expected to be lifted anytime soon.

However, General Insurance Specialist, Jane Seed, said that existing domestic insurance policies are transferable. 

"Sellers who have existing insurance on a property or motor vehicle can offer that policy to the new owners. However, without an existing policy, buyers of new properties will struggle to get insurance."

"One of the problems this creates is that buyers can't draw-down funds if they don't have insurance. Another issue is that if a buyer believes that the seller's sum insured falls short of the replacement value of the property, they may decline the property deal," she said.

Jane said she did not expect the embargo to be lifted while the aftershocks continue, especially amidst warning that the area is at risk from another earthquake.

"I don't expect too much of an impact in the property market. Buying and selling may slow down a bit, but so long as people can transfer insurance policies, they should be alright."

"When the embargo is lifted, insurance may become more expensive, and I think insurers will take a closer look – particularly in a commercial context – at the age and construction of buildings before deciding whether to insure.”


If you would like to talk to a commercial or personal general insurance expert, whether you are in the affected quake zone or not, call 0800 438 238 or click here to email.

With KiwiSaver, age matters

KiwiSaver members who don’t actively choose an age-appropriate fund could miss out on as much as $341,000 by the time they turn 651!

KiwiSaver is like a time capsule. The decisions people make now about fund choice will be judged by their 65-year-old selves in the future. So if you belong to a KiwiSaver scheme you might want to think about your investment strategy.

We’d like to help you plan for the lifestyle you want at retirement.

Prioritise your future! Contact us to be better prepared for your retirement.

1 Average figures based on AMP KiwiSaver Scheme date for a 25-year-old earning an average wage who stayed in a conservative fund for 40 years compared to someone investing according to their age. not taking into account fees, tax or inflation.
*You should make your own assessment of whether the AMP KiwiSaver Scheme is likely to deliver a better outcome for you. Transferring out of an existing KiwiSaver scheme may have negative consequences for you.

 

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