If I set up an investment portfolio with you, am I locked in?

Investments recommended by Saturn Advice are liquid under normal market conditions, meaning you should be able to cash up your investments inside 10 working days. Note there may be occasions where it takes longer to cash up your investments, especially during significant market events such as the Global Financial Crisis.


If you are investing through Saturn’s Portfolio Superannuation Scheme, the scheme rules prevent you from withdrawing money from the Scheme until at least age 55.

How long does it take to withdraw my money?

Cash in your portfolio can typically be paid to your bank account within 1-2 working days. If you need to cash up investments, allow up to 10 working days to receive your money under normal market conditions. If you are closing your portfolio, your investments in Portfolio Investment Entity (PIE) funds will take longer to totally cash up than other investments in your portfolio because the custodian is required to calculate and deduct tax on these investments. This process can take 6 weeks or more. For other investments, we can normally arrange payment much sooner and endeavour to pay out investments as soon as we can.

How can I view my investment balance and account?

We offer you a secure online portal to view your portfolio information, including the value and performance of your investments. On a quarterly basis, we send you a set of portfolio reports accompanied by a market commentary and covering letter. These reports can be sent by post, email or if you are set up as a portal user, they will be sent directly to your portal where you can download and view them.

What are your fees?

If you want financial advice but do not want us to manage a portfolio of investments for you, we charge advice fees at an hourly rate of $250 plus GST.


If you want us to manage a portfolio of investments for you, our fees are based on a percentage of funds under advice, starting at 1.05% per annum plus GST, and reducing for funds in excess of $500,000. Note the custodian also charges fees in a similar way which are in addition to the above fees. For more information, talk to a Saturn Financial Adviser.


The above fees exclude fund manager fees and transactional costs associated with buying and selling listed investments.

How do you charge your fees, and are you paid commission?

Saturn Advice is a fee only business. We will agree fees with you before providing you with financial advice. Fees are either invoiced (for advice only services) or deducted monthly from your investment portfolio when we manage investments on your behalf. We do not accept commissions or any other payments from fund managers, brokers or businesses providing services to us.


We have negotiated significant management fee rebates with a number of the fund managers we recommend to clients. These rebates are applied to client portfolios and not retained by Saturn Advice.

How are investments taxed? Do I need to file a tax return?

All investments we recommend are subject to tax for NZ tax payers, other than those entities who are exempt from paying tax (i.e. registered charities). The method of calculating and paying tax, and the tax rates applying, will depend on what you are investing in and your overall income. The portfolios we recommend typically include local and overseas investments through NZ denominated Portfolio Investment Entity (PIE) funds, Australian Unit Trusts, and UK Investment Trusts. The latter two investment types are generally classified as Foreign Investment Funds (FIF) for tax purposes. If you are invested in FIF investments, you need to file a tax return and pay the required tax (if any). Saturn Advice provides you with tax reporting to assist you or your accountant with the preparation of your tax return. Saturn’s fees can usually be offset against taxable income, but you will need to file a tax return to claim the deduction.

What is the process when I meet a Saturn Financial adviser?

Saturn Advice follows a six-step financial advice process. Firstly, you get to meet with a Saturn Financial Adviser either online or face to face for a free and no obligation discussion about your current situation and objectives. They can provide you with an overview of Saturn Advice and advise if they are able to assist you at this time. If you choose to work with Saturn Advice, your Saturn Financial Adviser will agree with you the scope of advice, collect information about you and your financial goals, analyse the information provided, and provide you with a statement of advice. If you want us to manage investments for you, Saturn Advice will implement an agreed investment strategy for you and monitor and review your investment portfolio. For more information go to https://saturnadvice.co.nz/our-process/

What is a Custodian? How secure are my funds?

A custodian is an entity that holds assets in trust on behalf of others. NZX Wealth Technologies Limited (NZXWT) has been appointed to provide custody services, undertake investment administration and wealth management platform services in respect of investments managed by Saturn Advice on behalf of its clients.


NZXWT has contracted NZXWT Nominees to act as nominee and bare trustee of investments. This means investments will be recorded at Shareholder Registries, at Unit Registries (Fund Manager record keepers), on Bank Accounts and at similar record keepers in the name of the nominee. A separate sub custodian may be appointed to hold international investments. Whilst investments managed by Saturn Advice on your behalf are held in the name of the nominee, you retain beneficial ownership of your investments at all times, and may instruct that you wish to withdraw, transfer, or sell down these investments at any time subject to your client agreement with Saturn Advice, the laws of New Zealand and any other applicable regulations.


Note that Saturn Advice and NZXWT will only pay funds to a bank account that is in the name of the portfolio owner and where proof of the bank account has been provided. NZXWT is a wholly owned subsidiary of the NZ Exchange (NZX).

Why should I choose Saturn Advice over other providers?

Saturn Advice is a highly experienced boutique financial advisory business with collectively more than 300 years of financial services experience. We are committed to an impartial business model where we strive to eliminate all conflicts of interest in the advice we provide.


What does this mean in practice? It means having a fee only business model where the people paying us are our clients. We don’t accept payments or commissions from fund managers, brokers or any other 3rd party service providers associated with our clients’ investment portfolios. We have negotiated fee rebates from a number of fund managers we recommend to clients and in all cases, these rebates are applied to clients’ investment portfolios. Impartiality also means not having any financial interest in the investments we recommend.*


While neither of these factors are unique to Saturn Advice, what is much less common and sets us apart from others is we pay all our employees, including financial advisers, a fixed salary. There a no financial incentives for the business or revenue generated or the advice given. That way the team at Saturn Advice is focused on helping people make the right financial decisions. For more information visit https://saturnadvice.co.nz/impartial-financial-advice/


*Saturn Advice’s parent company owns and operates a Managed Investment Scheme specifically designed for UK Pension transfers. This scheme follows our impartial model having no financial interest in the investments available through the scheme. A portion of the scheme fees are shared with Saturn Advice for the advisory services it provides to investors.

What is in my investment portfolio?

The investments in your portfolio will depend on the service you choose with Saturn Advice and your investment strategy. Your Saturn Financial Adviser will help you determine your investment strategy and depending on the service you choose, may make investment recommendations from an approved list of investments researched and monitored by Saturn’s Investment Committee. These include domestic and global fixed interest, property and share investments through NZ domiciled Managed Funds (Portfolio Investment Entities (PIEs)), Australian Unit Trusts, UK Investment Trusts and some NZ listed investments.


If you invest through Saturn’s Discretionary Investment Management Service (DIMS), your Saturn Financial Adviser will help you determine your investment strategy and once agreed, Saturn Advice will select the investments making up your investment strategy which may change from time to time.

Can I lose everything?

No investments are guaranteed and may go down in value as well as up in value during the time you are invested. Having a well-diversified portfolio comprising of both New Zealand and global investments and with exposure to a range of asset classes (e.g. fixed interest, property and shares) is in our view the best way to guard against a total loss of your investments. Whilst individual investments can fail from time to time, it is extremely unlikely that all investments in a well-diversified portfolio will fail. At Saturn Advice, we usually recommend investing in between 15 and 25 funds, which typically means investing in 1,000 or more underlying investments.


It is very important your investment strategy takes into account your tolerance and capacity to take investment risk. Generally speaking, the longer your investment timeframe, the greater your capacity is to take investment risk by investing more of your portfolio in growth assets such as shares and property. These investments are more likely to reward you with better long-term returns compared with fixed interest investments, but in the short term, are also likely to experience greater volatility (ups and downs) compared with portfolios that have a greater exposure to more defensive assets such as fixed interest. Your Saturn Financial Adviser will help you determine the right investment strategy and investment portfolio for you and can provide you with historical returns of Saturn’s investment strategies.

Is there a minimum amount that I need to set up an investment portfolio with you?

No, we don’t require a minimum amount to invest as we recognise some investors are accumulating their wealth through regular savings and may not have a lump sum to invest. That said, there is a point below which it becomes impractical for Saturn to manage investments for you. As a general guide, if you have a lump sum of $100,000 or more to invest or are intending to invest $12,000 or more per annum, we can help you.

How do you manage conflicts of interest?

Refer to the FAQ titled “Why should I choose Saturn Advice over other providers?”

Will you pay me a regular income from my investments?

Some funds distribute income in cash which would be added to the cash holding of your portfolio. Other funds distribute income by issuing additional units of investments which would be added to your portfolio. There are a number of funds that retain income in the fund which is reflected in the unit price and value of the fund. Regardless of the approach fund managers take to distributing income, we can ensure you receive a regular income from your investments through a combination of paying you a portion of the cash in your portfolio, and if necessary, selling down some of your investments. The funds we recommend are liquid under normal market conditions, meaning we can usually cash up funds for you within 10 working days. If you draw income from your portfolio on a regular basis, we can ensure there is sufficient cash available to pay into your bank account on the agreed dates.

How do I know which fund I should select?

Your Saturn Financial Adviser will help you determine an investment strategy appropriate for your circumstances and recommend funds that are suitable for this. They may recommend changes to your portfolio from time to time. Your consent is required before changes are made to your portfolio.


If you are investing through Saturn’s Discretionary Investment Management Service (DIMS), once your Saturn Financial Adviser has helped you determine your investment strategy, Saturn Advice will manage a portfolio of investments for you in line with the investment strategy. Under DIMS, you are not required to approve any changes to investments. Your Saturn Financial Advisor will review your investment strategy with you from time to time to ensure it is still appropriate for your circumstances. As a result, they may recommend changes to your investment strategy.

Can I get negative returns?

It is quite normal for the value of investments to go down as well as up based on a number of factors including prevailing market conditions, the performance of economies, and specific industry or company financial performance. Generally, riskier investments such as shares can reward investors with higher long term returns, but at the risk of negative short term returns. Even investments that are considered to be lower risk (such as fixed interest investments) can experience negative returns. We’ve witnessed this in 2021 with several fixed interest funds having negative returns due to rising interest rates. This is because when interest rates rise, the market value of existing fixed interest investments falls.


Having a well-diversified portfolio can significantly mitigate the risks of negative returns, although even with a diversified portfolio, you can expect periods of negative returns. It is important that your investment strategy and portfolio are aligned with your financial goals. If you are investing for the long term, you have the capacity to withstand short periods of negative returns.

What are crypto currencies and does Saturn Advice offer them?

Cryptocurrencies, often referred to as digital or virtual currencies, are a means of exchanging value and to that extent, serve the same purpose as traditional currencies. However, unlike traditional currencies, crypto currencies are not controlled by governments or central banks and rely on blockchains to protect the integrity of transactions. The cryptocurrency that is top of mind for most people is Bitcoin although there are many other crypto currencies in circulation.


They are often critisized for being the currency of choice for illegal activities, have experienced significant volatility in value and there have been reported cases of vulnerabilities of the underlying systems supporting them. There is ongoing debate as to whether crypto currencies have a place in a diversified investment portfolio. Saturn Advice it not looking to add cyptro currencies to any of its investment strategies at this time, although this does not prevent the fund managers we recommend from including cryptocurrencies in their funds.

What is the difference between Passive and Active Investing?

Passive investing is a long term buy and hold approach to investing. In practice, passive investing is often associated with the purchase of funds aimed to mirror market indices. The argument for passive investing is its difficult to beat the market return over the long run and management fees for passively managed funds are generally lower than fees for actively managed funds.


As you might expect, active investing is the opposite of passive investing. Active investing involves the ongoing selection and monitoring of specific investments in a given market on the basis they are expected to perform better than the market. Active fund managers deploy a variety of strategies to pick investments to buy and when to sell them. The performance of active managers is ultimately measured against a market index relevant to the area they are investing. Management fees for active investing are generally higher than fees for passive investing.


Whilst it can be challenging to find active managers with long track records of outperforming market indices, there are notable examples that have added considerable value to investors over time. The approach of Saturn’s Investment Committee is to appoint active managers with the capability of out-performing market indices over the market cycle, but the committee will also consider passive manager options (if available) for sectors of the market where there is little evidence active managers can add value.

Where can I get advice on KiwiSaver?

Saturn Advice’s sister company, National Capital, is a digital financial advice business specialising in advice on KiwiSaver. It is an online service for KiwiSaver investors. To learn more, go to www.nationalcapital.co.nz. A Saturn Financial Adviser can also help you decide which KiwiSaver fund is right for you.

How does inflation affect my investments?

Inflation is the increase in the price of goods and services over time. It erodes the purchasing power of money as you need to spend more money to buy the same goods and services. How it affects your investments is largely dependent on the rate of inflation and what you are investing in. Some investments are resilient to inflation whereas others are more sensitive to it. Businesses that can pass on cost increases to consumers are likely to fair better in inflationary times than those business that can’t.


Central banks respond to higher than desirable inflation by increasing interest rates. This is negative for existing fixed interest investments because when interest rates rise, the market value of existing fixed interest investments falls. On the other hand, new issues of fixed interest investments will be at higher interest rates. The value of companies that are reliant on very strong future earnings growth to support their share prices (i.e. companies with very high price earnings ratios) are more vulnerable to interest rate rises because a higher discount rate is required to value future earnings.