This article was first published in BusinessDesk on 5 Jan 2024

Good financial advice goes further than just wealth – Milford.

There are some very persuasive mathematical and equally strong emotional reasons why anyone wanting to grow their wealth should take financial advice. Yet many don’t.

It’s a strange phenomenon. When there’s a leak in the bathroom, we call a plumber. An electrical fault means we call an electrician; we go to a personal trainer for fitness expertise. But financial advice…?

Let’s look at the mathematical advantages first. In 2020, a Financial Services Council survey found that New Zealanders who get financial advice, on average, have about 50 per cent more in their KiwiSaver fund than those who do not take advice.

Those receiving investment advice earn, on average, four per cent more than the unadvised from their investments and, in addition, save three per cent more of their income than those without advice. And emotionally? According to Philip Morgan Rees, Head of Private Wealth at Milford, financial advisers have the training and the ability to understand and predict investor behaviour – invaluable when investors, often reacting to market volatility, are about to make, costly mistakes.

“Warren Buffet, perhaps the greatest investor the world has ever seen, has a saying for just about everything,” says Morgan Rees, “and he said, ‘If you can’t control your emotions, you can’t control your money’.”

The proof in that particular pudding was seen when share markets began their dive at Covid’s first appearance. Many people pulled investments out of play or plumped for lower-risk investments. People in KiwiSaver hastily began withdrawing from higher risk funds, electing to patronise lower-risk ones.

All were caught out by the rebound – costing many investors many thousands of dollars as they were unprepared to surf that wave and missed it. “If you were invested when Covid struck and withdrew after the first market reaction, which people did when markets dropped by over ten per cent, and then if you reinvested a month, three months or six months later you’d be well behind someone who stayed the course. If you didn’t reinvest at all you’d probably be in the worst place as rampant inflation has been eating away at your cash.,” says Morgan Rees.

“That’s one of the biggest advantages of financial advisers. We understand investor behaviour and biases and it’s important to know how people are likely to react, so you can often stop them before they do.

“One of the most important points to note is that while historic graphs of market performance may show an upward sloping line, in reality that line is not straight and not smooth – and even investors who know that need reminding of it sometimes.”

There is empirical evidence that having advice to curb emotions makes investors happier people too. Research out of Australia shows those who receive ongoing financial advice experience 13 per cent greater levels of overall happiness and a 21 per cent increase in peace of mind. They are also 19 per cent less likely to have arguments with loved ones (True Value of Advice survey, IOOF, 2015).

So Morgan Rees says partnering with a good financial adviser can deliver more than just a plan and strategy to deliver good long-term financial returns. That is also true in what he calls the beginning of “The Great Wealth Transfer” – the shift of assets and wealth from the Baby Boomer generation to the next (and the one after that).

It incorporates a staggering set of numbers, with $1 trillion of assets involved in New Zealand alone. Charting a course through all that can be complicated and difficult. “Many people find it difficult to talk about money and families don’t find it easy to think and plan the transfer of money through the generations”.

“The advantage of a good financial adviser in that context is their neutrality. They can help conceive a plan, show the family what it means – help educate the next generation – and family members are reassured when they are all involved, all agree on a plan and understand where it is heading.”

Morgan Rees also says one of the stumbling blocks to getting financial advice is many people feel they do not have enough to invest and/or the cost of advice is too high. However, free advice for all investors is now commonplace, he says, either through digital advisers online or physical advisers who belong to an investment provider.

“The one thing to say about free advice is that it’s usually straightforward and means investing in that provider’s investment products. There’s nothing wrong with that, you just need to recognise that.”

Good financial advice being out of reach for many has changed, he says. “It’s not about how much money you have, it’s about making the most of what you do have.”

For those with a little more money and prepared to take a long-term outlook, the fees paid for financial advice and guidance can be insignificant compared to the rewards that can accrue to investors long-term – not to mention the comfort and wellness side of things.

“It’s essential to have a good long-term plan” says Morgan Rees, “and it is also important to understand how markets operate and stay the course.”

This article does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment or financial advice. Past performance is not a reliable indicator of future performance. Investment involves risk and returns can be negative as well as positive. Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at Before investing you may wish to seek financial advice. The Disclosure Statements for all Milford Financial Advisers contain more information and are available on request, free of charge. For more information about our financial advice services please visit