Below are questions that are often listed as "questions to ask a potential financial adviser" on various articles on the internet. (Apologies if there any typos/grammatical errors. This was first published on 23 August and will be reviewed soon.)

Are you an RFA/AFA/QFE adviser?

I'm an Authorised Financial Adviser (AFA). I'm authorised to provide financial advice on all New Zealand-domiciled financial products, and provide financial plans tailored to your needs.

What are your qualifications?

I am an AFA. I've met all the educational requirements necessary to be authorised to provide comprehensive financial advice.

I also have a law degree (LLB), a Bachelor of Commerce (BCom) (economics and finance), a Masters of Entrepreneurship degree, and a Diploma in Financial Planning.

As a lawyer I've provided trust and estate planning services to many clients. I've also worked for many years as a financial services lawyer, having worked with banks, insurance companies, managed funds, and many financial advice businesses. I've reviewed thousands of advice files prepared by hundreds of advisers and spoken with dozens of advisers in depth about their business and advice processes.

How do you get paid?

The only form of remuneration I receive is from clients. I charge all clients the same fixed fee of $1,980 for the same essential service.

What will this cost me?

I charge all clients a fixed fee of $1,980 including GST.

What are my on-going costs?

I don't lock you in to any ongoing service arrangements. I provide a service for you, you pay a fee, and then it's up to you as to whether and when and how you want to engage me again. Assuming you engage Fairhaven Wealth for a review within two years of the initial service, the cost of the review will be either $500 or $1,000, depending on the scope of the review. 

(All costs may be subject to change.)

What extra fees should I be aware of?

I charge a fixed fee. There are no extra fees involved with my service. Conceivably, if the scope of the advice ended up being substantially larger than anticipated, it might be necessary to charge more. To date this hasn't happened. If this was the case I would communicate this clearly to you ahead of time and get agreement before proceeding.

There may be some costs associated with the recommendations I make (for example, management fees associated with managed funds, or insurance premiums if I recommend insurance) but these costs relate to the product or service I recommend.

One of my key philosophies is try to help you pay as few unnecessary fees as possible.

What's included vs what's extra?

I provide the same service to everyone. There are no "added extras", unless you can come up with something creative you specifically want to engage me for, over and above my normal service.

How do I know what you’re recommending is the best option for me?

I set up my business so I could follow what I call the "family and friends rule". That is, I provide my clients with the same advice I'd provide to close friends and family members if they were in your position. In fact, I recommend what I would do if I were in your shoes.

I have no incentive to recommend one investment strategy over another. I charge the same fixed fee for an advice-only service, and it's up to you whether or not to go ahead with my advice.

I've done everything I can to ensure there aren't any incentives that will get in the way of me providing investment advice.

It's also up to you as to whether to implement my advice. Once you've gone through my advice process, it's entirely up to you to determine whether my advice is the best option for you. I provide advice that may inform your decisions, but I ultimately work with clients who want to make these decisions themselves.

What services does your firm provide?

I provide all of my clients the same service. I work with you to prepare a financial plan that is tailored to your circumstances, needs, and objectives. The plan is designed to help you achieve your lifestyle and financial goals and manage the risks to which you're exposed. I provide specific investment advice, but also explain how this specific advice fits within a bigger picture relating to my advice to you. Where relevant, I provide strategic, high level personal insurance advice - for example, I might recommend life insurance cover and a certain level of cover.

What don't you do?

I don't provide:

• budgeting services
• mortgage broking services
• insurance product advice (I will recommend certain types of personal insurance and levels of cover, but I won't recommend specific insurers or insurance products)
• legal advice
• accounting and tax advice
• financial advice in relation to products that are not based in New Zealand.

I'm not a magician. Or a lion tamer.

Can I see a sample financial plan?

At the time of writing this FAQ I haven't had the time to prepare a sample financial plan. In any case, every financial plan is unique and tailored to my client. Even the structure of the report can change depending on your circumstances and needs. To the extent I have a "template" it is constantly evolving. So even if I provided a sample plan, it might not accurately reflect what your plan will look like.

Reports are typically 40 to 60 pages long and highly tailored to you. To the extent I have a “typical report” includes:

1. An executive summary, of 1-3 pages
2. A scope of services page, usually 1 page
3. An “About you” section, which usually goes 2-3 pages
4. A section setting out my understanding of your financial situation (ie, a balance sheet and a section discussing income and expenditure) – 2-4 pages
5. A section setting out “What you want to achieve”, which usually goes 1-3 pages (my record has been 6.5 pages)
6. A section discussing your risk profile, which is typically 2-3 pages long
7. An extended section outlining my investment recommendations. Typically this talks about different ways to “invest” (whether that be investing in financial assets, repaying debt, or investing in other ways, such as property, education, or personal ventures). In relation to financial assets, I usually spend 3-4 pages explaining the importance of allocation and providing a worked example of what I think your asset allocation should be. I then set out my specific recommendations (eg what managed funds, KiwiSaver fund(s) to invest in), including the reasons and risks associated with the advice – the length of this section comes down to my specific advice.
8. I typically spend 2-5 pages talking about your financial trajectory, using a tailored “flawcasting” approach (which I illustrate here). (I often also provide a spreadsheet you can play around with yourself.) Where appropriate I’ll also consider other methodologies such as historical back-testing and Monte Carlo analysis.
9. If suitable, I spend 5-10 pages or so talking about personal insurances – such as life, income protection, trauma, TPD – providing high level advice explaining whether these are suitable and what level of cover might be appropriate (but not recommending specific products).
10. I also usually include 1-3 pages of “Other matters” which might come up for consideration – for example, recent comments have related to the need (and reason) for EPAs (enduring power of attorney documents); recommending that some clients seek legal advice in relation to their trust(s); considerations relating to advancing substantial funds to loved ones; and residency considerations for clients intending to spend some time out of NZ and how this might impact eligibility for NZ Super.

How much contact do you have with your clients?

As much as necessary to provide high quality advice. For the most part, once a client decides they want to proceed this involves a 3-4 hour conversation before I prepare a report, and one or more subsequent conversations lasting 30 minutes to 2 hours to discuss the report before finalising the report.

One of the reasons I charge fixed fees rather than hourly rates is so that neither of us have to watch the clock. It takes as long as it takes to ensure I get the information necessary to provide advice that is tailored to you.

How often will we meet?

As many times as necessary in order for me to provide advice that you're satisfied with. For most people, this involves two meetings - a 3-4 hour meeting and a second 30-60 minute meeting. However, the number and length of meetings can vary.

Will I be working only with you or with a team?

If you work with Fairhaven Wealth, you'll be working with me (Sonnie).

What makes you different from other financial advice firms?

Many advice firms are independent. I go further by charging fixed-fees, not locking you in to ongoing service (and fee) arrangements, and providing advice that you can implement.

I also have a unique background, informed by my work as a lawyer (in the financial services area as well as with respect to trusts/estate planning), and having reviewed thousands of advice files prepared by hundreds of advisers.

What makes your client experience unique?

My business model is unique. You can be confident that I'm not trying to sell you anything. My focus will be on getting to know you, and providing you with the same advice I'd give to a loved one.

The clients I've worked with have found me engaging, trustworthy, and able to communicate my advice in a way that is clear and tailored to them. I work with all clients in a spirit of candour, transparency, and good faith.

Do you work with clients who already have advisers?

Yes. A number of my clients already have relationships with advisers and engage me for a "second opinion" in relation to their financial affairs. Because I provide an advice-only service, you can engage me and this won't interrupt your current engagement with your existing adviser at all.

What’s your philosophy when it comes to investing?

My first and foremost philosophy is that an investment strategy needs to be tailored to the clients I work with. Everyone's circumstances, needs, and objectives are different, and what is appropriate for one client may be inappropriate for the next. The starting point is to tailor an investment strategy to my clients.

Another fundamental aspect of my investment philosophy is that asset allocation is central to whether you are invested appropriately. There is never a single "right" way to invest -- there are many "shades of good", especially if you get your asset allocation right. If you get your asset allocation wrong, you're unlikely to be invested in a way that is appropriate for you. 

Regarding underlying investments, my personal bias is that it's not worth trying to outperform the market. When it comes to investing in growth-oriented financial assets, you often can't get much better than widely diversified, low-fee, index-based managed funds.

Related to the first part of my philosophy, I also believe that an investment strategy shouldn't change according to the short-term whims of the market. If an investment strategy is appropriate for you, it should be appropriate for you in six months' time, regardless of what has happened in the market -- the only reason it may no longer be appropriate is if your personal circumstances, needs, or objectives have changed.

I believe you should keep your financial affairs boring so you can make the rest of your life interesting.

What asset allocation will you use?

This depends on your unique circumstances, needs, and objectives. It is based on many factors, including your cash flow needs and your tolerance for risk, which in turn is influenced by many factors, including your experience with investing in financial assets and your ability to sleep at night in the face of investment volatility.

What investment benchmarks do you use?

My benchmark doesn't relate to investments so much as whether my plan helps you live your life according to your values and priorities.

For the most part, I recommend investing in index-based managed funds. As such, my goal is to match "the market" as closely as possible (with as little adjustment for fees as possible).

What benefit can you give me above and beyond an index or market tracking fund?

For most of my clients I recommend an index or market tracking fund. These are great products. But I provide advice, and these products aren't advice.

An index or market-tracking fund doesn't tailor a plan to your personal circumstances, needs, and objectives. An index or market-tracking fund doesn't provide you with comfort and confidence that you're on track in terms of achieving your long-term financial outcomes (or otherwise). An index or market-tracking fund doesn't care or consider your broader circumstances, needs, and objectives.

My advice relates to whether an index or market tracking fund is suitable for you in the first place, and if so, which of the many index or market tracking funds available are suitable for you.

Who holds my money?

Not me. I provide advice, and this often involves recommending investment funds that aren't associated with me whatsoever. Invariably, the funds I recommend have an independent trustee which holds your money, which means the investment manager can't run away with you.

Are you a fiduciary?

If by asking whether I'm a fiduciary, you're really asking whether my interests are aligned with yours, and that I don't let any conflicts of interest stop me from providing the advice that I think is in your best interests, then yes, I'm a fiduciary.

If you want a more technical answer, fiduciary relationships only exist in relationships of reliance and trust and potential vulnerability, and for many clients I'd question whether you actually need to enter into a relationship of such reliance and trust to necessitate fiduciary duties to exist in the first place. I don't, for example, hold your money.

If you want to read a 3,000 word article I wrote on this topic, read it here.

Do you have any disclosures?

Yes. I have a primary disclosure statement and a secondary disclosure statement. Before you engage me I prepare a tailored proposal letter which sets of the general scope of service.

Do you have a set account minimum?

No.

How many clients do you work with?

Since establishing Fairhaven Wealth in 2016 I've worked with over one hundred clients. However, as I provided clients on an as-needed basis, I wouldn't consider any of these to be ongoing clients. At any one time I'm usually working with somewhere between 5 and 10 clients.

What types of clients do you specialise in? What does your ideal client look like?

Almost all of my clients to date have been "ideal" clients. They don't fit within a particular demographic. However, they seem to have three things in common:

• They're switched on
• They're engaged in their financial futures
• They're nice.

Are there clients who aren't suitable for you?

Absolutely! I'm not suitable for for you if:

• you're not engaged with your finances;
• you want to outsource your financial life to a third party;
• you're having issues dealing with debt and making ends meet (addressing those issues involve distinct skill sets of which I'm not especially strong);
• you want an adviser who wears expensive suits and ties and/or has his business name on the side of a CBD building;
• you think it's possible to "beat the market" and want someone who thinks they can do this for you;
• you think it's possible to "time the market" and want someone who thinks they can do this for you;
• you think it's possible to pick stocks that will outperform the market and want someone who thinks they can do this for you (... you probably get the idea);
• you want someone who will give you certainty about the future (the best I can give you is comfort and confidence in the face of an uncertain future); 
• you want someone who uses technical terminology (aka "jargon") at any opportunity; or
• you want sympathy for supporting Donald Trump. I don't like that guy.

How do you communicate with clients?

I communicate with clients in whatever way suits them. If you're in the Christchurch area, I'm usually happy to meet you at your home or at my home office. The majority of my clients are outside of Christchurch. Some clients fly in to meet me. However, the majority of clients speak with me via telephone or Skype/Zoom. I also email.

How will you make sure I understand and follow through on your advice?

By making it very clear why and how my advice is aligned with your life and what you want to achieve, and providing advice that is easy to implement.

(I'd also say that my role is to provide advice. I only want to work with clients who want to be in control of their financial futures. It's entirely your decision whether and to what extent to implement my advice. My business model is such that I don't have any incentive to pressure you to implement my advice.)

What is your practice size?

I am a sole operator. If you deal with Fairhaven Wealth, you're dealing with me.

What's your succession plan?

I provide one-off engagements. If you want to re-engage me but something has happened to me in the meantime, you'll need to find another adviser. If something happens to me in the middle of the engagement I won't be able to complete the engagement. You won't be invoiced for the service. The only cost to you will be the time you have put into our discussions and the inconvenience of having to find another adviser. If any of these things happen, it's possible that based on conversations with my wife she will be able to refer you to one or more suitable advisers to assist you.

Can you tell me why the last two clients you lost stopped working with you?

I don't consider myself to have "lost" any of my clients. All clients have been happy with the service I've provided. However, I will also add that I work with clients on a one-off basis. For many of my clients my goal is to make myself "redundant" -- so they don't need to engage me again.

What are your conflicts of interest?

I charge fixed fees. Arguably, this creates an incentive for me to spend as little time as possible on the service I provide to you (as opposed to if I charged hourly rates, which might create an incentive to spend longer).

I don't believe I have any conflicts of interest which might influence the actual advice I provide.

What are your biases?

In general, I believe that the simpler you can keep your financial affairs, the better.

I have a bias towards investing in "passive" index-based funds, because I am sceptical that anyone can predict the future (which is what you need to be able to do if you want to "beat" the market). My bias is that instead of trying to beat the market, you should make sure that you don't get beaten by the market.

My bias is to be distrustful of advice, especially where there are conflicts of interest. It's also why I encourage my clients to push back and challenge me wherever possible.

Do you have professional indemnity insurance?

Yes. I have professional indemnity insurance issued by IAG New Zealand Limited arranged via Financial Advice NZ.

If you've got this far, congratulations! In the interest of full transparency, I recommend that you don't just contact me - I encourage you to contact other advisers to ensure that whoever you engage, they are a good fit for you - in terms of the services they offer and also in terms of finding someone who is on your wavelength.

How is your own money invested?

I have money invested in Australian superannuation in a low-fee, widely diversified, growth-oriented fund. My KiwiSaver is invested in Simplicity's Growth fund. I have funds invested in SuperLife's high growth fund. The majority of my surplus income is directed towards repaying my mortgage, plus I make regular contributions to SuperLife's high growth fund. Investing time and money into this business is also a significant investment.

I also have a number of insurances in place, including home, contents, car, professional indemnity, life, trauma/critical illness, income protection, and total and permanent disability (TPD) insurance.

How do you measure success?

I track success by the satisfaction of my clients. I ask clients whether my service covered everything they wanted it to cover. I encourage clients to push back and challenge anything that they don't agree with or that doesn't resonate with them. From my perspective, I'm successful if I've prepared a financial plan and made recommendations that are tailored to my clients, and that aligns with their values and priorities. I'm successful if, after working with me, they feel more comfortable and confident about their financial futures.

At a personal level, I track the success of this business by whether it allows me to provide services that give me a sense that I'm adding value, contributing, and adding value to people's lives. Although it's important that I generate an income, I've also created this business so I can have more flexibility with my time to spend with my family and on other projects. For me, success is also about being able to speak without fear or favour and living with integrity in line with my values and beliefs. And ultimately, success (and true wealth) for me is more about maintaining good health and good relationships than maximising the size of my balance sheet.

What do you love about your job?

I love getting to know my clients. It is a pleasure and a privilege to have candid conversations and be worthy of the trust that people place in me. I love helping to develop plans with clients to help them live a life that's in line with their values and priorities. I love giving clients a sense of comfort and confidence about their financial futures.