1. Investors
  2. Getting financial advice
  3. Working with an investment adviser

Working with an investment adviser

Once you’re happy with the strategy your adviser has recommended, the next step is to carefully choose the investments that best suit your plan. You can implement the plan yourself, with your adviser’s support, or you can get your adviser to buy and sell for you, broadly in line with your plan.

The hands-on approach

If you understand enough about investing and you’re confident making your own decisions, you may decide to implement your own investment plan.

You can either do this by buying and selling investment products independently, or you may choose to use a platform (also known as a ‘nominee service’ or ‘wrap’) that allows you to have all your investments in one place. These types of platforms provide access to a wide range of managed funds, fixed interest investments and NZX listed shares.

To find out more about platforms, see Investing through a platform.

The hands-off approach

If you’re not confident making your own investment decisions, your adviser can make them for you. They can do this by recommending any change to your portfolio themselves and getting you to sign off each time, or by providing a discretionary investment management service, called a DIMS. With a DIMS, your adviser manages the day-to-day management of your investments on your behalf. Your adviser needs to be acting under a licence or have authorisation to provide a DIMS.

Your adviser will take you through the relevant paperwork needed to sign up to a DIMS but before you sign anything, it’s important to ask the following questions:

  • Will my investments be held in my name or someone else’s?
  • Who will hold my investments and ensure they are where they should be? 
  • What information will I receive about my investments and how often?
  • What are the charges for this service?

Investing through a platform

Whether you make your own investment decisions or ask your adviser to make decisions for you, you may end up using an investment platform.

Investment platforms are online services that can be used by you directly or by your financial adviser.

Platforms may provide the opportunity for all your investment information to be in one place. You are likely to receive consolidated reporting and it’s an easier way to track the performance of your investments. They may also offer you access to some funds not available individually.

Be aware that platforms can cost more than holding individual investments, so may not be suitable if you’re only likely to invest in one or two funds. They may also only be available to clients of a particular advice firm. This means if you decide to change financial advisers, you may have to exit the platform and pay fees and taxes. If you’re thinking of using a platform, ask your financial adviser how many other advisers use that platform. A ‘unique’ offering could be a disadvantage.

Keeping a close eye on your money

Deciding to let someone else take control of your investments doesn’t mean losing control of your money. Most advisers behave professionally and are legally obliged to do the best for their clients, but it’s still important to keep informed about your investments.

You can help protect yourself by:

  • asking as many questions you like until you’re confident you understand what you’re investing in
  • never writing a cheque payable to your adviser, unless you’re paying their advice fee
  • never signing a blank document given to you by an adviser, or a blank cheque keeping all your correspondence, statements and reports in one place – track your money and always check for anything unexpected
  • making sure any statements and reports about your investments are sent to you and not just to your financial adviser
  • reviewing your investments frequently - see Track your investments page
  • finding out how you can cash in your investments. Check if there are any conditions that apply if you want to withdraw money, such as reaching a certain age (for all KiwiSaver schemes) or if you need to wait for a set period of time (for some managed funds).

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Problems with your adviser