Insights
Adviser News - December 24
Future proofing your business, research into ethical motivation + an interesting stock.
Welcome to our Adviser update for December
In this issue we'll cover:
Future proofing your business: The 'Great Wealth Transfer'
Market research: Kiwi investors and their motivations
Stocktake: Danaher - a company on our exceptions register
I’m sure, as you are eagle eyed and data driven, that you have already noticed that the latest Morningstar KiwiSaver Survey has been published, showing all three of our funds ranked #1 for 5-year returns in their category. I know I have mentioned these results before, but being able to show 3rd party proof is the icing on the cake. And any time we mention returns, I need to reiterate that we got these from investing ethically. It shows our investment thesis, over the long term, is delivering. The engine behind these returns, our investment team, having lost a colleague and friend Hamesh Sharma, is now looking towards resourcing for future growth. We’ve recently brought on two temporary analysts to assist the CIO/ Portfolio Managers with our portfolio maintenance as we go to market in a more formal capacity in the coming weeks. As always, if you have any questions, please get in touch. And if I don't talk to you before, enjoy your summer break.
Ngā mihi
Simon Leach
Relationship Manager
Future proofing your business: The 'Great Wealth Transfer'
Investment strategies to appeal to benefactors including women and Millennials
We're on the brink of the ‘Great Wealth Transfer’, where trillions of dollars will be transferred from Baby Boomers to younger generations over the next two decades. In New Zealand, the transfer is expected to involve around $1.2 trillion—an amount that eclipses the total value of all companies on the NZX, dwarfs current KiwiSaver funds, and represents over 80% of the total value of residential property and the land it sits on.
The implications of this transfer are important. Firstly, for the first time in generations - due to changes in succession planning norms and gender equity - wealth is more likely to be evenly distributed between male and female siblings. Secondly, because women live longer than men, more of them will become responsible for distributing assets. And lastly, the Gen X and Millennials, who are lucky enough to be benefactors of this wealth, will have different ideas regarding what they do with this money.
In this article we talk about:
The changing financial landscape of younger generations.
Investment priorities & financial literacy to empower women.
Future-proofing your advisory practice: Key takeaways
Market research: Kiwi investors and their motivations
Our recent market research, conducted by Clarity Insight, showed there is a whole segment of investors that know that doing ‘good’ can be rewarding – for society and themselves financially. And it’s interesting to note, that this segment is only after returns ‘as good as’ their existing provider, if they understand they are making a difference. We also found a clear skew towards ethical attitudes to investing compared to those that are simply after maximising returns.
This research indicates a promising future for ethical brands, including investment funds. This is reinforced by younger people being more likely to be aligned with the principles of ethical investing, suggesting a generational shift in attitudes that can organically grow demand for ethical funds in the future.
Global life sciences company Danaher saves countless animal lives thanks to "organoid" research and development.
Animal testing is a hot topic for investors, and we recently ran a story to provide clarity on our approach towards animal testing.
It's a difficult subject - from the outside it might sound easy but navigating it from an investment perspective, while balancing ethics and returns, is complicated. So, we thought it was best to give an example of how it actually works in reality and Danaher is a great example. This fascinating company is leading the charge when it comes to finding alternatives to using animals. Their scientific outcomes result in, not only less testing on animals, but also more accurate testing on diseases that could affect us all.
If you have a client that is big on 'no animal testing', this is good company story to share.
First for 5-year KiwiSaver returns*
The Pathfinder KiwiSaver Plan ranked first for 5-year returns in the multisector growth, balanced and conservative categories in the latest Morningstar KiwiSaver Survey as at September Quarter End 2024*.
Major bank faces mass KiwiSaver defection over Gaza war, but investors’ sympathies are split.
About 2000 people have pledged to switch their money out of a major KiwiSaver scheme on Friday, if they do not pledge to sell its stake in technology company Motorola.
Quick Links
Simon heads up the distribution team at Pathfinder, setting strategy and managing third party relationships. This portfolio includes independent financial advisers, investment platforms and referrers, and corporate & community programmes. Simon is a purpose driven collaborator, holds an Executive MBA through Massey University, and lends his expertise to multiple charities on a board/committee level.