We don’t want Volkswagen who clearly put profit ahead of the environment.
We don’t want the Peanut Corporation of America who knowingly sold peanut products that were contaminated, killing 9 people.
marketing and distribution.
We don’t want banks like JPMorgan, Barclays, Citigroup, RBS, UBS, or Deutsche Bank. All of them pleaded guilty to criminal charges and were fined billions for interest rate rigging.
Clearly investors need to distinguish between those corporations are who ruthlessly profit driven, and those that who seem to take pride in what they offer, and how it might benefit their investors.
Google is your best tool
Simply google the company or their chief executive's name alongside others words such as:
FMA or ASIC
Use Australia too as many investments offered in NZ originate from there
And even if their transgression was quite a few years ago, leopards rarely change their spots. Without doubt there is good, greedy, and doubtful in financial companies, banks, and corporations, large and small.
Investors just must do their due diligence. They just must.
Find an independent financial services professional, since no one can call themselves independent if they take commissions or other incentives. You need to find someone who does not want to sell you anything.
Make absolutely sure whoever you talk to is really “au fait” with investments and know their stuff.
Accountants and solicitors
Accountants and solicitors are not allowed to give personalised investment advice unless they are AFA’s (very few are), or it is incidental to their work.
Some will be able to help you find investments you can trust, but not many. Indeed some have even been caught out investing large sums in Ponzi schemes, and some have links to investment firms whereas you are looking for unbiased advice.
Not that long ago, it was quite common for investment firms to give huge Christmas baskets to accountants and lawyers. I suspect that practice has stopped since the introduction of new financial laws in 2011. One hopes so!
Our growing checklist
Tip No 12 - what is the background of the company? What were they “born” out of? Do you feel comfortable dealing with this sort of organisation?
Tip No 13 - if your gut feeling says “not sure”, listen to it. If in doubt, don’t. Or at the very least use the old adage, “if in doubt, do half”.
Tip no 14 - look past the charming person or presenter – way past. What matters are the values of the organisation behind them? Look them up on Google.
Tip No 15 – don’t be cynical, but enquire, enquire, enquire. Being cynical will take none of us anywhere, but being of an enquiring mind never does any harm.
Tip No 16 - there is never any hurry to invest. Do your due diligence first.
Tip No 17 – seek out and only invest with principled companies and corporates, it will pay off in spades.
Tip No 19 - use google, it is a great tool. Make sure you use the key words I gave you (as above) and put in the country that you are looking at. Include Australia a lot as many of the offerings in NZ have parent companies in Australia.
Tip No 20 - seek independent advice from people who know their stuff. Make sure the advice is truly independent.
Supplied by Alan Clarke, financial & retirement adviser, & author.
His 2nd book “The Great NZ Work, Money & Retirement Puzzle” is now available.
Alan is an independent authorised financial adviser (AFA) FSP26532.
His disclosure statement is available on request and free of charge.