Simplicity Key In Savings/Investments Provision
Simplicity and Transparency Key in Provision of Savings and Investments
Public debate following the release of the New Zealand Institute’s plan for individual lifetime savings accounts has once again highlighted the critical point New Zealand is reaching with regards to savings and investments, according to Sovereign.
In March 2004 Sovereign’s SaverPulse survey into New Zealanders attitudes towards savings and investments showed that only 52% of respondents had started saving for retirement and only 36% were contributing to a regular savings plan. While respondents felt guilty about failing to make plans and didn’t expect Government assistance, that wasn’t enough to motivate them to start.
Vena Crawley, Head of Marketing and Product Management at Sovereign, says Sovereign has been working with financial advisers and consumers to develop a solution that makes planning savings and investments simple and transparent.
“Average New Zealanders view the savings and investments market as a complex beast, cluttered with an array of confusing products. Research we have commissioned along with other third party studies, such as that by the New Zealand Institute, indicates that apathy has set in and the issue continues to worsen.”
“At the same time that consumers are resisting planning for their financial future, advisers are faced with difficulties that make recommending financial solutions unviable for many. In a move to change this, Sovereign has developed a new product range called AssetArchitect to provide consumers and advisers with a simple and transparent method to tailor financial strategies.”
AssetArchitect consolidates most of Sovereign’s range of savings and investment products into a clear and structured portfolio. AssetArchitect is aimed at consumers with the following savings and investment needs: Financial planning for retirement Building up a reserve fund for emergencies Lump sum investments Saving for a specific goal
Johanna Pansier of Johanna Pansier Insurance believes that there is a lack of understanding of the consequences of failing to plan for the future.
“I continue to be surprised at how many New Zealanders across the board have little or no savings and investment strategies in place. My focus has been on selling risk products, but with products such as AssetArchitect I’ve been talking with clients about their savings and investment plans. It is clear that most people are either waiting for Government action or ignoring the issue, and that is where a simple and transparent solution will prove invaluable.”
A key element of AssetArchitect is the Personal Investment Planner (PIP) tool. PIP follows a needs analysis process that includes risk profiling and the development of a personalised financial plan, and was constructed in consultation with advisers. By completing the step-by-step process in conjunction with their clients, advisers can make recommendations appropriate to their client’s needs. In addition, PIP assists advisers in complying with current best practice in regards to providing financial advice to clients.
Sovereign has chosen to utilise a multi-manager, multi-style selection of investment products in the AssetArchitect range that aim to provide competitive and consistent returns. A number of innovative pieces of collateral have been developed to support AssetArchitect including: Information about financial aspects of planning for retirement A retirement calculator that illustrates in a simple manner how much consumers would typically need to save each month to fund their retirement A long range calendar to assist consumers with identifying savings goals An explanation of the power of compound interest