Hiring an adviser may save you cash

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Research from Australia has suggested that those who use a financial adviser save on average A$2650 (NZ$3368) more a year than those who do not.

The study, undertaken by KPMG for the Investment and Financial Services Association in Australia, suggested that those with a financial planner saved more and had greater amounts invested.

They had a total average investment balance of A$42,559, compared to those without an adviser at A$34,346.

Their savings averaged A$6991, compared with A$4341.

Lynn McMorran, president of New Zealand's Institute of Financial Advisers, said the difference was probably due to the positive investment and savings behaviour that financial advice encouraged.

"The fact you have a financial adviser who reviews your position and all those sorts of things encourages people to keep on track."

The KPMG study also suggested Australia would experience a 0.5 per cent gain in gross domestic product by 2014-15 if 5 per cent more Australians sought financial advice today.

"While this was an Australian study, I am confident that a study in New Zealand would come up with a similar result, " Ms McMorran said.

On a different subject, she said a proposed code of conduct for financial advisers does not ban commissions but does call for total transparency about them.

There have been calls for excessive commissions to be banned following the collapse of many finance companies.

The draft code of ethics being proposed by a Securities Commission "code committee" says advisers who are receiving commissions needed to be up front about their lack of impartiality.

But Ms McMorran feared the danger of removing commissions and charging fees instead was that "it makes advice accessible only to the wealthy".

"The real issue is ... very much around absolute transparency ... and making sure that the disclosure is absolutely clear to the client in terms of what they are receiving and how they are being paid and how that potential could provide a conflict of interest."

Meanwhile, Massey University has become one of two New Zealand programme partners with the Chartered Financial Analyst Institute.

Massey said the institute's charter was the highest global qualification for investment professionals.

Professor Lawrence Rose, the college of business pro vice-chancellor, said Massey's Bachelor of Business Studies in Finance conformed with more than 70 per cent of the CFA programme.

It was a graduate-level programme that combined self-study with at least four years of full-time work experience.

- NZPA