Beyond the Silo: Why Your KiwiSaver Strategy Should Reflect Your Entire Financial Picture

Most New Zealanders check their KiwiSaver balance in isolation – celebrating growth or worrying about market dips without considering the bigger picture. But what if this tunnel vision is actually holding back your retirement wealth?

The key to optimising your KiwiSaver isn't just about picking the right fund; it's about understanding how it fits within your complete financial ecosystem.

The Whole-of-Wealth Approach

Your KiwiSaver is just one piece of your financial puzzle. Let’s put that in context:

Consider Sarah, a 35-year-old professional with:

• $45,000 in KiwiSaver

• A $120,000 mortgage on her $580,000 home

• $25,000 in term deposits

• $15,000 in everyday savings

 If Sarah only looks at her KiwiSaver balanced fund (typically 50% growth assets, 50% defensive assets), she's missing the complete story. If we examine the bigger picture, Sarah's defensive assets extend far beyond her KiwiSaver's bond allocation.

Her cash savings and term deposits already provide significant conservative exposure across her total portfolio. This means her KiwiSaver could theoretically afford to be more growth-focused, as the defensive components are already well-represented elsewhere in her wealth structure.

This becomes even more pronounced when considering homeownership. While your family home isn't a liquid investment, it represents a substantial asset that will likely appreciate over time and will eventually be mortgage-free. You then have an additional layer of wealth stability, which should influence how aggressively you can afford to invest your KiwiSaver.

The 30-Year Retirement Challenge

Here's the sobering reality that every KiwiSaver member needs to confront: if you retire at 65, your savings could need to stretch three decades (or more).

According to Statistics New Zealand's mortality data, a 65-year-old today has a significant chance of living into their 90s¹ - much longer than previous generations.

This extended timeframe fundamentally changes the retirement investment equation. Even at retirement age, money that may not be needed for decades can potentially weather market volatility in pursuit of higher long-term returns. Yet many retirees shift to overly conservative approaches, which may struggle to maintain purchasing power across such extended retirement periods.

Consider the numbers. If inflation averages 2.5% annually, the purchasing power of money halves every 28 years². A conservative investment approach barely keeping pace with inflation could leave retirees significantly worse off by their 80s and 90s.

Asset Allocation Across Your Complete Portfolio

The sophisticated investor doesn't ask "What should my KiwiSaver fund allocation be?" but rather "What should my total asset allocation be, and how can I use different investment vehicles to achieve it most effectively?"

This approach might lead to counterintuitive decisions. Someone with substantial cash savings and term deposits might benefit from a growth-focused KiwiSaver strategy. Conversely, someone heavily invested in shares outside KiwiSaver might choose a more balanced KiwiSaver approach to avoid over-concentration in equities.

The tax efficiency of different investment vehicles plays a crucial role too. KiwiSaver's favourable tax treatment on contributions and fund earnings makes it an ideal vehicle for growth investments, particularly for higher-income earners³. Meanwhile, other investment structures might be more suitable for defensive allocations.

The Danger of Set-and-Forget Thinking

KiwiSaver's success in automatically enrolling New Zealanders into retirement savings has created an unintended consequence – the belief that retirement planning is now "sorted."

This set-and-forget mentality ignores the dynamic nature of both personal circumstances and investment markets. Your optimal KiwiSaver strategy should evolve as your life changes:

• Early in your career, with decades until retirement and potentially limited other assets, an aggressive growth approach often makes sense.

• As you accumulate property, build emergency funds, and approach retirement, the optimal allocation across your complete portfolio will shift.

Regular portfolio reviews are essential - not just of your KiwiSaver, but of how all your financial assets work together. This might reveal opportunities to rebalance between different investment vehicles or adjust your KiwiSaver strategy to better complement your evolving financial situation.

Beyond Silos: The Need for Holistic Financial Guidance

This whole-of-wealth approach reveals a critical flaw in how many New Zealanders currently receive financial advice. Too often, advice is delivered in silos: KiwiSaver advice from one provider, mortgage advice from another, investment advice from a third. You end up with a fragmented approach, which may not all fit together into a favourable picture.

Holistic financial advice considers your complete financial ecosystem. A truly comprehensive adviser doesn't just ask "What KiwiSaver fund should you be in?" but rather "How should all your financial assets work together to achieve your goals most efficiently?"

This integrated approach can reveal sound strategies that siloed advice skates past. When the circumstances are right, some might find benefit in:

• Salary sacrificing additional amounts into KiwiSaver whilst reducing term deposit holdings, effectively shifting defensive assets into a more tax-efficient structure

• Paying down your mortgage faster could be more beneficial than increasing other investments, depending on your complete tax and financial situation.

Professional financial advisers who take this holistic view can help model different scenarios across your entire portfolio. They consider not just your KiwiSaver options – but how changes to your mortgage repayments, investment allocations, ownership structures and even insurance strategies could work together to improve your financial position

The complexity of optimising across multiple asset classes, tax structures, and time horizons is where professional expertise becomes invaluable. A qualified adviser can navigate the interplay between KiwiSaver's tax advantages, property investment considerations, portfolio diversification needs, and your evolving life circumstances.

Moreover, this comprehensive approach requires ongoing attention. Your optimal strategy today won't necessarily be optimal in five years. Regular reviews of your complete financial picture ensure your strategy remains aligned with your goals.

Taking Action

Start by conducting a complete financial stocktake. List all your assets, including:

• KiwiSaver balance

• Property equity

• Other investments

• Cash holdings

 Then consider your current overall asset allocation across everything you own. Does this allocation make sense for someone who needs their money to last potentially 30 years in retirement? Or are you being overly conservative, because you're only looking at each investment in isolation?

The Case for Wise Counsel

The path to a comfortable retirement isn't found in any single investment fund. It's constructed through the thoughtful integration of all your financial resources, with KiwiSaver playing its optimal role within your wealth ecosystem. This level of sophisticated planning requires experienced professionals who understand how to orchestrate asset and cash flow integration across your entire financial life.

The cost of this holistic professional advice is often far outweighed by the potential long-term benefits. Even modest improvements in your overall investment efficiency compound dramatically over 30-40 years, potentially adding tens of thousands of dollars to your retirement wealth.

KiwiSaver is a powerful tool, but it's most effective as part of a complete financial strategy. Your 95-year-old self will thank you for taking a thoughtful, comprehensive approach to retirement planning today.

Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 427

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References

¹ Statistics New Zealand. (2024). New Zealand Life Tables 2020-22. Wellington: Statistics New Zealand.

² Reserve Bank of New Zealand. (2024). Inflation Calculator. Available at: rbnz.govt.nz

³ Inland Revenue. (2024). KiwiSaver Tax Treatment Guidelines. Wellington: Inland Revenue Department.

⁴ Financial Markets Authority. (2024). KiwiSaver Annual Report. Wellington: FMA.

Time to Cut the Banking Anchor: New Zealand’s Capital Ratio Handbrake

The Economic Handbrake We Can’t Afford

New Zealand’s economy is caught in a relentless cycle, bouncing between positive and negative GDP growth every three to six months like a yo-yo. The economy contracted by 0.90% in the second quarter of 2025, with GDP falling 0.5% over the year ended December 2024, following a technical recession in the September quarter. In these turbulent times, when economic momentum is more critical than ever, we’re handicapping ourselves with regulatory constraints that act as a handbrake on the very institutions that provide the lubrication our economy desperately needs.

The culprit? The doubling of bank capital ratios, a dramatic policy shift implemented through the collaboration between Adrian Orr at the Reserve Bank of New Zealand (RBNZ) and former Finance Minister Grant Robertson. The December 2019 Capital Review decisions included a significant increase in capital ratios that will fundamentally reshape New Zealand’s banking landscape by 2028 [1].

The “Big Four” banks, ANZ NZ, BNZ, ASB, and Westpac NZ, have been classified as “Domestic-Systemically Important Banks” (D-SIBs), meaning they’re considered so crucial to the economy that their failure would cause widespread damage. These banks will be required to hold a total capital ratio of at least 18% by 2028, compared to the much lower levels they previously held. Other banks, including Kiwibank, TSB, and smaller institutions, face somewhat lower but still substantially increased requirements of 16%.

To put this in perspective: capital is essentially the bank’s own money that acts as a safety buffer. The higher the capital requirement, the less money banks have available to lend to businesses and consumers. This policy response, designed to address what they characterised as a once-in-a-century crisis, has instead gummed up our economy and now represents a historical anchor dragging down our economic potential when we need to be cutting loose and sailing toward brighter days.

Banks: The Lifeblood of Economic Growth

Our banking system isn’t just a collection of financial institutions; it’s the circulatory system of our economy. Banks provide the essential mechanism, the lubrication that allows businesses to expand, entrepreneurs to innovate, and families to invest in their futures. When we constrain their ability to lend through excessive capital requirements, we’re essentially restricting the flow of economic oxygen throughout the entire system.

The Oliver Wyman report commissioned by the RBNZ found that New Zealand’s current Tier 1 capital requirements are relatively high by international standards, creating a competitive disadvantage that ripples through every sector of our economy [2]. This isn’t just a technical regulatory matter; it’s a massive shift that has fundamentally altered the competitive dynamics of our financial system and created a drag on economic growth.

The International Competitiveness Crisis

In a globalised world, economies compete not just on natural resources or innovation, but on the efficiency of their financial infrastructure. New Zealand already faces the challenge of high energy prices that make it difficult to compete with countries that enjoy cheaper power. Now we’re compounding this disadvantage by artificially constraining our banking sector with capital requirements that our competitors haven’t imposed on themselves.

International comparisons show that New Zealand banks are “in the pack” in terms of capital ratios relative to international peers, but our four largest banks reported a weighted average CET1 ratio of 10.5%, putting them in the bottom quartile on an unadjusted basis. However, the Reserve Bank has made amendments to better reflect New Zealand risks, with farm lending adjustments raising the average risk weight on banks’ exposures by around 20-30 percentage points compared to a usual implementation of the IRB framework [3].

This creates a double burden: higher costs of capital for businesses seeking to grow, and reduced lending capacity from institutions that could otherwise fuel economic expansion. It’s like running a marathon with weights strapped to our ankles while our competitors run unencumbered.

The Yo-Yo Economy Needs Stability, Not Constraints

New Zealand’s recent economic performance tells a troubling story. The New Zealand economy has contracted, on a per capita basis, for nine of the last 12 quarters, making for a deep and lengthy recession [4][5][6][7][8]. This represents a dire financial path that has been painful for all New Zealanders.

We’re caught in a pattern of brief growth spurts followed by contractions, creating uncertainty for businesses and discouraging long-term investment. In this environment, what we need is financial system flexibility, the ability for banks to respond quickly to lending opportunities that could break us out of this cycle.

Instead, we’ve imposed rigid capital constraints that reduce banks’ ability to capitalise on growth opportunities when they arise. It’s economic policy working against economic recovery.

A Political Lifeline in Economic Policy

The current context makes this review even more critical. The Reserve Bank has endured a difficult and disruptive period of late, culminating in Adrian Orr’s resignation in March 2025, three years before his contract was due to terminate [9][10]. Finance Minister Nicola Willis’s handling of Orr’s departure has not helped the situation, creating additional uncertainty around monetary policy leadership at a time when the economy desperately needs stability. Dr Anna Breman, formerly First Deputy Governor of Sweden’s Riksbank, has now been appointed as the new RBNZ Governor, beginning her five-year term on 1 December 2025 [14].

For the current government, recognising and correcting this policy overreach represents more than just good economics; it’s a potential political lifeline. Adrian Orr was appointed by Finance Minister Grant Robertson to be Governor in December 2017, with Robertson supporting Orr’s reappointment on the grounds of continuity and stability, while opposition National Party finance spokesperson Nicola Willis called for an independent review of the Reserve Bank’s performance.

Nicola Willis and Christopher Luxon have inherited an economy constrained by their predecessors’ regulatory overcorrection. Since 2019, concerns have been raised that the Reserve Bank’s capital settings may be undermining competition and efficiency in the banking industry, increasing the cost of lending to New Zealanders, and creating headwinds for economic growth [12][13].

By advocating for a return to more appropriate capital ratios, they could demonstrate decisive economic leadership and provide immediate relief to businesses and consumers struggling under current conditions. This isn’t about abandoning prudent regulation; it’s about acknowledging that the increased capital ratios were a crisis response that has outlived its usefulness.

The Path Forward

The RBNZ has opened consultation on New Zealand’s capital settings for deposit takers, with the consultation paper setting out two options for overall capital ratios, both materially reducing requirements compared with 2019 decisions [1][2]. Professor Quigley noted that the options are calibrated to a higher risk appetite than in the 2019 review, stating that “Under the Deposit Takers Act, we will have stronger tools for supervision and crisis management, as well as additional capacity and capability as a regulator. That means we can responsibly ease capital requirements, while still protecting financial stability”.

Dr Anna Breman and the RBNZ have the opportunity to demonstrate economic leadership by acknowledging that the crisis-era increases in capital ratios were appropriate for their time but inappropriate for our current needs. Returning to more appropriate levels would send a clear signal that New Zealand is serious about breaking free from its economic doldrums and positioning itself for sustainable growth.

The Robertson-Orr policy legacy has served its purpose. Now it’s time for new leadership to chart a different course, one that recognises the difference between crisis management and growth facilitation.

The Path to a Brighter Day

The handbrake has been on long enough. It’s time to release it and let our economy run at the speed it needs to compete and thrive in the modern global marketplace. The yo-yo economy can become a thing of the past, but only if we have the courage to cut the anchor and sail toward that brighter day that awaits.

Our banks are ready to power economic growth. Our businesses are ready to expand. Our entrepreneurs are ready to innovate. The only question is whether our regulators are ready to let them.

Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 426

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References

[1] Reserve Bank of New Zealand. (2025). Capital requirements for banks in New Zealand. https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-banks/standards-and-requirements-for-banks/capital-requirements-for-banks-in-new-zealand

[2] Reserve Bank of New Zealand. (2025). RBNZ invites feedback on review of capital requirements for deposit takers. https://www.rbnz.govt.nz/hub/news/2025/08/rbnz-invites-feedback-on-review-of-capital-requirements-for-deposit-takers

[3] Reserve Bank of New Zealand. (2025). 2017-2019 Capital Review. https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-banks/how-we-regulate-and-supervise-banks/our-policy-work-for-bank-oversight/capital-review

[4] Trading Economics. (2025). New Zealand GDP Growth Rate. https://tradingeconomics.com/new-zealand/gdp-growth

[5] New Zealand Herald. (2025, March 19). Out of recession: New Zealand’s GDP rises 0.7%. https://www.nzherald.co.nz/business/gdp-will-todays-data-show-the-end-of-the-recession/MTNBTKWXCNATTMH5DW4U7KJLNI/

[6] Wikipedia. (2025). Economy of New Zealand. https://en.wikipedia.org/wiki/Economy_of_New_Zealand

[7] International Monetary Fund. (2024). New Zealand: Staff Concluding Statement of the 2024 Article IV Mission. https://www.imf.org/en/News/Articles/2024/03/19/mcs-new-zealand-staff-concluding-statement-of-the-2024-article-iv-mission

[8] CNBC. (2025, March 19). New Zealand exits recession as fourth-quarter growth beats forecasts. https://www.cnbc.com/2025/03/20/new-zealand-exits-recession-as-fourth-quarter-growth-beats-forecasts.html

[9] Reserve Bank of New Zealand. (2017). Review of bank capital requirements [Speech]. https://www.rbnz.govt.nz/research-and-publications/speeches/2017/speech-2017-03-07

[10] Wikipedia. (2025). Adrian Orr. https://en.wikipedia.org/wiki/Adrian_Orr

[11] Oliver Wyman. (2025). Comparing New Zealand Bank Capital Ratios to International Peers. Report commissioned by Reserve Bank of New Zealand.

[12] NZ Adviser. (2025). RBNZ reviews bank capital rules amid competition concerns. https://www.mpamag.com/nz/news/general/rbnz-reviews-bank-capital-rules-amid-competition-concerns/547311

[13] Lister, M. (2025, September 23). On Point: ep 304 | Has your home bias left money on the table? [Audio podcast]. Craigs Investment Partners. https://podcasts.apple.com/nz/podcast/on-point/id1667364727?i=1000728078149&r=84

[14] New Zealand Herald. (2025, September 24). New Reserve Bank Governor announced: Swedish economist Dr Anna Breman gets top job. https://www.nzherald.co.nz/business/new-reserve-bank-governor-announced-dr-anna-breman-gets-top-job/JRJYGHVFJZABRKDFZTJJ2UKQVE/

Days of Auld are Long Gone: New Zealand's Housing Reality Check

Politicians are entitled to their opinions, but not their own numbers

The romantic notion of the great Kiwi dream – buying your first home for three times your annual wage – has gone the way of the moa. The harsh mathematics of New Zealand's housing market in 2025 tell a story that no amount of political spin can soften, especially after the spectacular crash that followed the pandemic bubble.

Consider this sobering reality: with 2.125 million private houses serving 2.042 million households, we're walking a tightrope. When Auckland's median weekly rent hits $650 and the average New Zealand house costs $881,508, we're not just talking about expensive property – we're witnessing the fundamental reshaping of how New Zealanders live.

The Crash That Changed Everything

The numbers from the recent crash are staggering. House prices peaked in November 2021, then fell 17.80% nationally, bottoming out in May 2023. Wellington was hit hardest, with prices plummeting 25.92% from their October 2021 peak. Auckland wasn't far behind, down 23.64% from its November 2021 high. Values are still down 22.5% from the peak in Auckland, 25% in Wellington, and the country as a whole has prices 17.2% lower than the post-Covid records.

Property sales tell an equally dramatic story. Sales peaked at 100,108 in June 2021, then collapsed to just 58,763 in May 2023 – a 41.30% drop in annual property transactions. This wasn't just a market correction; it was a complete unwinding of the pandemic property frenzy.

The crash was so severe that New Zealand's median multiple – the ratio of house prices to household income – fell from a peak of 11.2 in 2021 to 7.7 in 2024, according to Demographia's housing affordability survey. While still severely unaffordable by international standards, this represented the most significant improvement in housing affordability in decades.

The New Arithmetic of Home Ownership

The numbers don't lie, even when politicians might prefer they did. A typical first-home mortgage of $570,000 at 4.75% interest translates to $686 per week, or nearly $36,000 annually for three decades. That's not just a mortgage payment – it's a generational commitment that would make our grandparents' heads spin.

Back when houses cost three times your annual wages, families made do with second-hand everything, camping holidays, and no restaurant meals. Today's buyers face a vastly different equation: house prices have increased at 5.445% annually over the past 20 years, while wages have lagged behind at 4.2%. This isn't just about lifestyle expectations – it's basic mathematics working against ordinary New Zealanders.

Even after the crash, Reuters estimates suggest that nationwide home prices are approximately six times the average household income, leaving homeownership out of reach for many first-time buyers. The crash helped, but not nearly enough to restore the old social contract of affordable homeownership.

The Landlord's Dilemma

Even property investment, once considered a reliable path to wealth, tells a cautionary tale. Take a real example from the current market: a $794,000 four-bedroom house with a $400,000 mortgage, renting for $624 weekly. After rates, insurance, interest, maintenance, and management fees, the net return is a measly $1,609 annually – just 0.408% on the owner's $394,000 equity.

This isn't sustainable economics; it's financial masochism. Without underlying asset inflation of at least 2% annually, property investment becomes a fool's game. The magic isn't in rental returns – it's in the government's implicit commitment to maintaining inflation levels that protect asset values.

Construction activity has also remained depressed. Residential construction plunged by 4.9% in Q4 2024, to be 25% down from its previous peak in Q3 2022. The pipeline of new supply continues to shrink, setting up future supply shortages even as current oversupply keeps prices subdued.

The International Context

When we compare New Zealand house prices to similar economies, the picture becomes clearer. In New Zealand dollars, median house prices sit at $682,963 in the UK, $698,190 in the USA, $859,692 in Canada, and $1,001,619 in Australia. We're not alone in this crisis, but that's cold comfort for young Kiwis watching homeownership slip away.

In real inflation-adjusted terms, New Zealand's median house price has returned to pre-pandemic levels – meaning the entire pandemic boom has been erased, at least in purchasing power terms.

The Rental Reality

With approximately 625,000 households now renting – about 29% of all private dwellings – we've created a nation of reluctant tenants. These aren't people choosing flexibility; they're families priced out of ownership, paying someone else's mortgage while accumulating no equity of their own.

The mean weekly rent in New Zealand for the year to April 2025 reached $574, with Auckland commanding $631 weekly. However, there are signs of relief: average rent across the country dropped $27 a week in May compared to last year as oversupply finally benefits tenants.

The generational impact is staggering. Children growing up in rental properties today might inherit $250,000 from their parents, but not until they’re 70 years old - wealth that comes too late to influence their own housing trajectory.

Beyond Political Promises

Politicians love to promise housing solutions, but the mathematics of supply and demand operate independently of electoral cycles. Remember then-Prime Minister Jacinda Ardern's grand promise of 100,000 new homes? Pure unicorns and fairy dust – mere theatre and hokum for the masses. The promise evaporated faster than Heretaunga Plains morning mist, leaving behind nothing but disappointed.

With population growing at 1.252% annually and housing construction struggling to keep pace, the pressure cooker of demand continues building. Political promises can't magic houses into existence any more than they can repeal the laws of economics.

The solution isn't in clever policy tweaks, grandiose announcements, or first-home buyer subsidies that merely inflate demand further. It requires acknowledging that our housing market has fundamentally disconnected from local incomes and productivity – and that political theatre won't bridge that gap.

What's Changed, What Hasn't

The fundamental difference between then and now isn't just price – it's expectation versus reality. Previous generations bought homes with low expectations but even lower prices. Today's buyers face high expectations with even higher prices, even after the crash.

Property commentators note that while "a lot of those falls happened over 2022 and 2023," in recent times "it's been a lot flatter. They go up a bit, they go down a bit." The market has stabilised at these lower levels, but they're still far above what most young families can afford.

The old social contract is broken. Where once a single income could secure family housing, today's dual-income households struggle to service mortgages that consume their entire financial capacity for three decades, even at these "crashed" prices.

Current Market Signals

Recent data shows conflicting forces at play. Property values fell 0.2% in December 2024, marking the ninth drop in 10 months. Yet mortgage rates have declined dramatically, with debt-to-income ratio rules now adding new complexity to lending decisions.

National house prices have dropped by more than $137,000 since late 2021, yet some locations are showing signs of recovery. Property sales have started to recover, with 77,445 properties sold in the 12 months to July 2025, up from the trough but still well below peak levels.

The Hard Truth

New Zealand's housing crisis isn't a temporary blip or a problem that can be solved with good intentions and political rhetoric. It's a structural transformation that demands we reconsider everything from urban planning to taxation policy.

The days when hard work and modest expectations guaranteed homeownership are indeed long gone. Even after the most significant housing crash in a generation, the mathematics of homeownership remain stacked against ordinary families. What emerges next will define whether New Zealand remains a place where ordinary families can build generational wealth or becomes a playground for the already-wealthy while everyone else pays rent forever.

For those navigating this challenging landscape: have a plan. Make it one that's tested with evidence, tracked and measured against real outcomes – not political promises or wishful thinking. Consider seeking financial advice from a fee-only fiduciary who has no vested interest in selling you products or properties. The mathematics don't care about our hopes; they respond only to careful preparation and realistic expectations.

The numbers tell the story. The question is whether we're prepared to listen.

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Special thanks to Pita Alexander. Statistics sourced from Newsletter, 11 September 2025: "An Update on New Zealand Housing as at 31 August 2025"

Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 425

The Paradox of Wealth Without Peace

Time: The One Thing No One Can Buy

God gives everyone 168 hours each week - 24 hours a day for 7 days. This time is a gift to be used wisely.

You can have $3 million in the bank and still feel poor.

I've seen it more times than I can count. Successful professionals sitting across from me, their financial statements telling one story whilst their faces tell another. On paper, everything looks perfect: high income streams, diversified portfolios, prestigious career trajectories, and assets that would make most Kiwis envious.

But beneath the surface? A different reality entirely.

Stress that follows them home every evening. Uncertainty that keeps them awake at 3 AM, staring at the ceiling. A quietly pervasive sense that, despite all their achievements, it's never quite enough.

The goalposts keep moving, the finish line keeps shifting, and the peace of mind they thought money would bring remains frustratingly elusive.

After working with hundreds of high-achievers, I've discovered this phenomenon rarely stems from what's visible on their balance sheets. Instead, it comes down to three invisible relationships that most people never examine. Yet these relationships shape everything: how they spend, save, think, and ultimately, how they feel about their financial lives.

These relationships don't just influence money decisions. They ripple through career choices, health habits, sleep quality, personal relationships, and long-term planning. Research consistently shows that financial well-being is more strongly correlated with psychological factors than absolute wealth levels¹. Understanding these relationships isn't just about financial wellness—it's about life wellness.

Relationship #1: Your Relationship with Money

Most people obsess over the numbers: net worth, income growth, investment returns, KiwiSaver balances. These metrics matter, but they're only part of the equation. The fundamental question few ever ask is, “What do I actually believe about money?”

Is money something you control, or something that controls you? Do you see it as a tool for freedom, or a source of anxiety? A measure of success… or a threat to your values?

Studies in behavioural economics demonstrate that our financial decisions are driven more by psychological factors than rational calculations². If your core beliefs about money were formed during times of scarcity, uncertainty, or financial stress, they may no longer serve the life you're building today. Many successful people still operate from the same financial fears they carried in their twenties and thirties, even after their circumstances have dramatically changed.

Your financial plan must reflect the life you want now, not the fears you carried decades ago. This means regularly examining and updating your money beliefs as you evolve. What felt prudent at 35 might feel restrictive at 55. What seemed risky in your early career might now represent exactly the kind of calculated risk that aligns with your values and goals.

Understanding your money personality provides crucial insight into why certain strategies feel right whilst others create internal conflict, regardless of their theoretical benefits.

Relationship #2: Your Relationship with Time

Time is the most underpriced asset in any portfolio, and it's the one asset people consistently undervalue in their decision-making.

You can recover money, but you cannot recover time.

Market downturns are temporary. Career setbacks can be overcome. Investment losses can be recouped. But the hours, days, and years you spend? They're gone forever.

Despite knowing this on an intellectual level, many high achievers continue to spend time like it’s unlimited. They optimise for financial returns whilst ignoring time returns.

“Money can’t buy happiness” – but time might

Research from Harvard Business School shows that people who prioritise time over money report higher levels of happiness and life satisfaction³. They'll spend hours researching a minor investment decision whilst giving little thought to how they're investing this most precious resource.

If your time isn't aligned with what truly matters to you, no amount of money will create the sense of freedom you're seeking. This is why some people with modest incomes feel genuinely wealthy whilst others with substantial assets feel trapped.

Real wealth isn't just about having money, it's about having choices. And choice is fundamentally powered by time:

• The freedom to say no to opportunities that don't align with your values.

• The ability to spend unhurried time with people you care about.

• The luxury of pursuing interests that fulfil you, regardless of their financial return.

Think on how you spend your hours and ask, “does this reflect what I say matters most to me?” If there's a disconnect, all the financial success in the world won't create the life satisfaction you're seeking.

Relationship #3: Your Relationship with Yourself

This relationship is the most neglected yet the most powerful of the three.

Many successful people can articulate what success looks like in concrete terms. They can talk income level, asset targets, career milestones, even lifestyle markers – but they don’t know what success feels like on a personal level.

If you've never paused to define success for yourself—really define it, beyond external measures—you'll spend your life chasing someone else's version of it. You'll hit financial targets, career goals, and accumulate assets… but they won't create the security you thought they would.

Positive psychology research confirms that intrinsic motivations (personal growth, relationships, contribution) lead to greater well-being than extrinsic motivations (wealth, fame, status)⁴. This is why you can have a portfolio that's growing steadily and still feel fundamentally stuck. Your external wins are not as directly connected to your internal sense of progress and fulfilment as you might think.

Your relationship with yourself determines what is "enough." It shapes what risks feel worth taking and which ones feel reckless, and influences whether you see money as a tool for creating the life you want – or as a scorecard for proving your worth.

The Integration Point

These three relationships don't exist in isolation. Your beliefs about money affect how you value time, while your relationship with yourself shapes both your money beliefs and time choices.

When these relationships are aligned, financial decisions feel natural and sustainable. When they're in conflict, even objectively good strategies can create stress and resistance.

True financial wellness isn't just about having enough money. It's about ensuring your financial life reflects your actual values, supports your real priorities, and creates space for what genuinely matters to you.

Why Professional Guidance Matters

Understanding these three relationships intellectually is one thing. Developing them is quite another.

Most people recognise that something isn't working in their financial life, but they struggle to identify exactly what that is. Making matters more complex, our relationships with money, time, and self are deeply personal and often unconscious. They’re shaped by decades of experiences, family patterns, cultural messages, and past decisions.

This is where working with a fee-based holistic adviser becomes invaluable. Unlike commission-driven advisers who profit from selling products, fee-based advisers are compensated directly by you for their expertise and guidance. This alignment means their recommendations are driven by what's best for your situation, not what generates the highest commission.

A truly holistic approach recognises that your financial life doesn't exist in isolation from the rest of your life. Your money decisions affect your relationships, career choices, health, and overall life satisfaction. Similarly, changes in these other areas ripple back into your financial planning needs.

A skilled holistic adviser serves as both strategist and accountability partner. They help you identify any blind spots, challenge the assumptions limiting your progress, and keep you focused on what truly matters to you – rather than getting distracted by market noise or society's definition of success.

Perhaps most critically, they help you stay aligned with your true mission over time. Life evolves, priorities shift, and what felt right five years ago may no longer serve you today. Regular check-ins with an objective professional ensure your financial strategies continue reflecting your current values and goals, not outdated versions of yourself.

Professional Financial Advice Provides Value Beyond Returns

The investment in professional guidance pays dividends not just in financial returns, but in the peace of mind that comes from knowing your money, time, and life choices are all working in harmony towards what matters most to you.

There is no set-and-forget strategy when it comes to true financial wellness. Every day, week, month, quarter, and year, your plan must evolve and be reshaped to reflect the reality of your changing life. Just as your life is not set-and-forget—constantly growing, adapting, and responding to new circumstances—your financial strategy must be equally dynamic and responsive to serve you effectively.

---

Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 424

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References

¹ Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences, 107(38), 16489-16493.

² Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. Yale University Press.

³ Whillans, A. V., Dunn, E. W., Smeets, P., Bekkers, R., & Norton, M. I. (2017). Buying time promotes happiness. Proceedings of the National Academy of Sciences, 114(32), 8523-8527.

⁴ Kasser, T., & Ryan, R. M. (1996). Further examining the American dream: Differential correlates of intrinsic and extrinsic goals. Personality and Social Psychology Bulletin, 22(3), 280-287.

Why Holding Cash Feels Safe - But Isn't Always Wise

The ‘security’ of cash today often comes at the expense of tomorrow's purchasing power.

New Zealanders tend to hold cash reserves despite changing interest rate conditions. The RBNZ has cut the Official Cash Rate to 3.0% in August 2025 from its peak of 5.5% in early 2024, with term deposits following suit. While declining in line with the OCR, term deposit rates remain attractive; the highest rates on Canstar's database sit at 4.50%.

Yet, NZ’s economy contracted in the second quarter of 2025. Inflation increased to 2.70% in the same period[1] – well within the RBNZ's 1-3% target band but adding pressure to real returns.

The Money Illusion Trap

Many investors fall victim to what economists call "the money illusion": thinking about money in nominal rather than real terms[2].

A $100,000 term deposit earning 4.5% generates $4,500 annually, which feels like growth. But for someone paying 33% tax, the after-tax return is just $3,015 (3.015%). With inflation at 2.7%, this creates a real return of just 0.315%. For those in the top tax bracket (39%), this return becomes 2.745% - providing a microscopic real return of $45. That’s barely enough to buy a decent bottle of wine to drown your wealth preservation strategy sorrows.

Major bank economists forecast the OCR will fall to 2.5% by the end of 2025 or early 2026[3]. If term deposits drop to around 3%, a 33% taxpayer will earn an even measlier 2.01%.

Hidden Costs of Cash Comfort

Opportunity Cost: While current term deposits offer reasonable returns, historical equity market returns in New Zealand averaged 7-10% annually over longer periods. That 2-5% difference compounds substantially over decades.[4]

Rate Dependency Risk: With the two-year swap rate expected to drop to 2.8% as the OCR reaches 2.5%, retail deposit rates will follow. Unlike growth assets that can benefit from economic recovery, cash offers no upside participation.

Inflation Protection: Cash provides no hedge against rising costs. With administered prices driving near-term inflation pressures, purchasing power erosion remains a persistent threat.

The Economic Reality Check

New Zealand's economic recovery stalled in the second quarter. Spending is constrained by global economic policy uncertainty, falling employment, higher goods prices, and declining house prices. RBNZ notes there is scope to lower the OCR further if medium-term inflation pressures continue to ease as expected[5].

This makes holding large cash positions riskier; cash-savers face declining returns and miss potential recovery gains in other asset classes.[6]

Cash has its place – as part of a strategic, sophisticated portfolio, where professional advisers can implement a bond laddering strategy (providing income stability with superior yields to deposits), liquidity management to provide regular cash flow and reduce the need for large cash reserves and can recommend PIE funds and other tax-efficient structures that minimise the tax drag.

The Value of Professional Advice

History has shown many investors start panic selling during downturns, chasing performance at market peaks, or hoarding cash.

When cash returns are low, investors venture into adventurous territory: junk bonds, private credit, mezzanine debt arrangements, and other high-yield instruments that carry higher risks.

Working with a fee-only, fiduciary adviser is invaluable. Look for advisers who:

• Conduct thorough discovery of your financial situation

• Explain their investment philosophy and process clearly

• Provide transparent fee disclosure with no hidden commissions

• Demonstrate relevant credentials (CFP, AIF, CEFEX)

• Show measurable progress tracking methods

 The Bottom Line

With NZ’s economic headwinds, sitting in cash isn't the safe option - it's the wealth erosion option.

"She'll be right" doesn't cut the mustard when your money's losing value faster than a leaky boat. After tax and inflation, that "safe" term deposit is barely keeping you afloat. Your future wealth depends on making this distinction now, not when it's convenient.

---

Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 423

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References

1. Trading Economics. (2025). New Zealand Inflation Rate - Q2 2025. Available at: https://tradingeconomics.com/new-zealand/inflation-cpi

2. Shafir, E., Diamond, P., & Tversky, A. (1997). Money Illusion. Quarterly Journal of Economics, 112(2), 341-374.

3. ANZ Bank New Zealand. (2025). Weekly Data Wrap: Economic Forecasts and OCR Projections. Available at: https://www.anz.co.nz/about-us/economic-markets-research/data-wrap/

4. NZX Limited. (2024). Historical Returns Analysis: New Zealand Equity Market Performance 1987-2024. Wellington: NZX.

5. Reserve Bank of New Zealand. (2025). Monetary Policy Statement August 2025. Wellington: RBNZ. Available at: https://www.rbnz.govt.nz/hub/publications/monetary-policy-statement/2025/08/monetary-policy-statement-august-2025

6. DALBAR Inc. (2024). Quantitative Analysis of Investor Behavior: New Zealand Market Study. Boston: DALBAR Research.

Our Broken Energy Market: When Bigger isn’t Better

There are three things on people's minds currently - rates invoices, insurance premiums, and power prices. They’re essential services where consumers have little choice, and providers face little competitive pressure. (1)

In the game of New Zealand’s energy market, the house always wins – furthermore, the house is government-owned, and participation isn't optional. Our state-controlled gentailers (the companies generating electricity AND selling it to consumers) have created an oligopoly, undermining business certainty and leaving regions vulnerable to catastrophic power failures.

The Centralisation Trap

When Cyclone Gabrielle devastated Hawke's Bay in February 2023, communities were plunged into darkness for weeks. The centralised grid proved helpless against nature's fury while gentailers counted profits from undamaged regions.

This isn't isolated failure - it's the predictable consequence of centralisation designed for corporate convenience rather than resilience.

New Zealand's gentailers - Genesis Energy, Mercury Energy, Meridian Energy, and Contact Energy - control approximately 85% of generation and retail markets (2). The government owns 51% stakes in three companies (3), creating a major conflict of interest where the referee owns most teams in the league.

It’s a state-protected illusion of choice. As power bills rise $10 monthly from April 2025 due to regulated increases (4), customers can supposedly switch providers. But when all major providers coordinate similar increases, what “choice” do we have?

The Hidden Tax

These companies reported record profits in 2024:

• Contact Energy $235 million (up 85%)

• Mercury NZ $290 million (up 159%)

• Meridian Energy $429 million (up 300%)

• Genesis Energy $131.1 million (up 29%)

Combined, they posted over $1.08 billion (5) whilst manufacturers close plants due to unaffordability.

NZ was built on low-cost energy to attract global businesses. Now, with PM Christopher Luxon acknowledging our power prices are "among the highest in the western world" (6), manufacturers are departing. Energy costs rose a widely cited 600% since 2021 (7), the cause sited for major closures.

The gentailer oligopoly represents an indirect tax disguised as market returns. When state-owned enterprises deliver billions to government coffers (8), politicians avoid raising tax rates whilst extracting revenue from every household through inflated electricity prices.

The Single ICP Stranglehold

Here's the regulatory elephant in the room: the "one ICP (Installation Control Point) or provider" rule that locks consumers into single-provider dependency. This artificially prevents households and businesses buying electricity from multiple sources, eliminating true competition at the consumer level.

Kāinga Ora received an exemption from this rule in 2023-24 (9), proving competitive choice is possible when bureaucratic barriers are removed. If state housing can access competitive electricity markets, why can't everyone?

The Distributed Solution

The Electricity Authority recently announced new rules requiring gentailers to offer "non-discrimination" in hedge contracts - fixing the symptom whilst ignoring the disease. Critics warn these measures could backfire, pushing up electricity prices as gentailers raise internal costs rather than lowering external ones (10).

Regulatory tinkering sidesteps the fundamental problem: vertical integration allows gentailers to manipulate both sides of the market.

Real reform requires abandoning the failed "bigger is better" approach. With the stroke of the legislative pen, the current "one ICP or provider" rule could be swept away, allowing consumers to decouple from single-provider dependency.

True energy democracy means communities generating power through local renewable resources and selling excess back to competitive retailers who don't control generation.

Thinking ahead (and learning from the past)

The Commerce Commission's approval for Contact Energy's acquisition of Manawa Energy (formerly Trustpower) represents another step towards market concentration. This feels eerily reminiscent of Progressive Enterprises' acquisition of Woolworths (NZ) Ltd in 2002 - where promised efficiencies never materialised for consumers (11). Instead, we got a duopoly making $430 million per year in excess profits - $1 million per day at consumers' expense (12). This grocery duopoly now ranks among the world's most expensive markets, with prices 3% above the OECD average (13).

Despite the Government's latest announcements about "levelling the playing field" (14), industry critics worry these measures won't crack down hard enough on the big four. The proposed changes preserve the fundamental structure that creates the problem.

New Zealand faces a choice: continue protecting state-owned energy giants that extract maximum profits from captive consumers… or embrace distributed energy systems with clear separation between generation and retail.

When communities control their energy future, the gentailers lose their power over New Zealand's economy. It's time to choose freedom over monopoly, resilience over vulnerability, and competition over state-protected oligopolies.

References

1. RNZ. “The essential item that's 900% more expensive than in 2000.” 27 August 2025. https://www.rnz.co.nz/news/business/571151/the-essential-item-that-s-900-percent-more-expensive-than-in-2000

2. Consumer NZ. "Profits surge for New Zealand's gentailers." 31 August 2023. https://www.consumer.org.nz/articles/profits-surge-for-new-zealand-s-gentailers ; North & South Magazine. "Power Play." September 2024.

3. Wikipedia. “New Zealand Electricity Market.” Accessed 27 August 2025.
   https://en.wikipedia.org/wiki/New_Zealand_electricity_market

4. Commerce Commission. "Electricity Lines and Transmission Charges: What are they, why are they changing and what does this mean for your electricity bill?" 2025. https://comcom.govt.nz/regulated-industries/electricity-lines/electricity-lines-and-transmission-charges-what-are-they,-why-are-they-changing-and-what-does-this-mean-for-your-electricity-bill

5. Electric Kiwi Times. "Big Four Gentailers Profiting at the Expense of Kiwi Households." 31 July 2024.

6. Energy Connects. "NZ Takes Urgent Action as Energy Price Rises Hurt Businesses." 26 August 2024. https://www.energyconnects.com/news/utilities/2024/august/nz-takes-urgent-action-as-energy-price-rises-hurt-businesses/

7. Industry Edge. “How is NZ’s Energy Crisis Impacting the Pulp, Paper and Packaging Industry?” 1 September 2024. https://industryedge.com.au/how-is-nzs-energy-crisis-impacting-the-pulp-paper-and-packaging-industry/

8. New Zealand Herald. "Mercury sees average 9.7% power price rise from April." 25 February 2025.

9. Electricity Authority. "Exemptions granted for innovation trial." 1 April 2024. https://www.ea.govt.nz/news/general-news/exemptions-granted-for-innovation-trial/

10. Stuff. "Will new rule big four electricity companies really bring down power bills?" https://www.stuff.co.nz/politics/360795971/will-new-rule-big-four-electricity-companies-really-bring-down-power-bills

11. Commerce Commission. "Progressive applies for clearance to acquire Woolworths." 16 May 2001. https://comcom.govt.nz/news-and-media/media-releases/archive/progressive-applies-for-clearance-to-acquire-woolworths ; Commerce Commission. "Commission releases Progressive/Woolworths decision." 26 July 2001. Commerce Commission. "Market study into the grocery sector: final report." 8 March 2022. https://comcom.govt.nz/news-and-media/news-and-events/2022/grocery-market-study-recommends-changes-to-improve-competition-and-benefit-consumers ; Consumer NZ. "Petition: stop misleading supermarket pricing." Accessed 12 August 2025. https://campaigns.consumer.org.nz/supermarkets

12. Commerce Commission. "Market study into the grocery sector: final report." 8 March 2022. https://comcom.govt.nz/news-and-media/news-and-events/2022/grocery-market-study-recommends-changes-to-improve-competition-and-benefit-consumers ; Consumer NZ. "Petition: stop misleading supermarket pricing." Accessed 12 August 2025. https://campaigns.consumer.org.nz/supermarkets

13. RNZ. "NZ grocery prices higher than OECD average, Commerce Commission says." 4 August 2025. https://www.rnz.co.nz/news/business/569172/nz-grocery-prices-higher-than-oecd-average-commerce-commission-says ; NZ Herald. "Grocery Action Group hits out at supermarkets as Kiwis keep paying high prices for groceries." 7 August 2025.

14. Electricity Authority. "Energy Competition Task Force looks to level the playing field between the gentailers and independent generators and retailers." August 2025. https://www.ea.govt.nz/news/press-release/energy-competition-task-force-looks-to-level-the-playing-field-between-the-gentailers-and-independent-generators-and-retailers/

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Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 422

Value vs Values: The True Cost of Short-Term Thinking

The weekly budget trap cuts across all wealth demographics. It makes you think, “I can’t afford those $200 boots that will last ten years. I’ll just buy the $40 ones that last eight months, because they cost less now.”

But this isn’t financial logic; it’s a fallacy. You spend more and get less value. The mathematics are brutal: those $40 boots become $600 over a decade, whilst the quality pair would have saved $400.

It’s easy to just blame pay cheques or tax brackets, but this is typically more about human psychology and cash flow management than poverty. Even high earners often live month to month as lifestyle creep sets in, optimising for immediate affordability rather than lifetime value (i).

Are you buying what you need, or filling the void?

Somewhere along the way, we transformed shopping from necessity into recreation. Buying essentials became buying feelings—the momentary rush of acquisition, the brief satisfaction of choice, the fleeting sense of control. We end up with wardrobes full of clothes we don't wear, garages packed with gadgets we don't use, and credit card bills that remind us monthly of our attempts to purchase happiness.

The cruel irony is that this consumption-driven approach to fulfilment often leaves us feeling more empty, not less. Each purchase promises to be the one that finally satisfies, yet the satisfaction fades faster than the credit card bill arrives (ii).

The Temu temptation.

Consider the Temu phenomenon: millions of consumers buying directly from manufacturers they'll never meet, purchasing products with no meaningful recourse if things go wrong, no customer service to speak of, and no ongoing relationship beyond the transaction. You buy with a click, guilt-free, because you never have to look anyone in the eye.

This represents the ultimate evolution of consumer culture—a generation that has learnt to decouple purchasing decisions from moral considerations entirely. The vendor is invisible, the supply chain is opaque, and the true costs are externalised to people and places you'll never encounter.

What does thinking short term really cost us?

When we optimise for immediate affordability over long-term value, we inadvertently support systems that externalise their true costs.

• Environmental degradation occurs when cheap goods mean cutting corners on sustainability.

• Labour exploitation thrives when low prices depend on underpaid workers in poor conditions.

• Community erosion accelerates when bargain-hunting drives business to the lowest bidder, often far from home.

This is where frameworks like B Corp certification become valuable—not as the solution to everything, but as a useful validation tool. When you're trying to align your spending (and your financial activity in general) with your values, B Corp status provides third-party verification that a company actually operates according to stakeholder-focused principles (iii).

Critics might dismiss this shift towards values-driven business as merely the world "going woke," but this misses the fundamental point. Perhaps it's time to recognise that whilst things haven't exactly gone to the dogs, this is simply the new normal.

Better business practices, stakeholder consideration, and community responsibility are essential adaptations to a world where consumers increasingly demand authenticity and accountability. Furthermore, they’re invoking responsibility for the long-term consequences of today’s decisions; in life and in finance, some careful forward thinking is always a good idea.

The case for prioritising value

The fundamental question isn't whether to buy cheap or expensive goods—it's whether our economic system should encourage decisions that prioritise immediate savings over long-term value (as it currently seems to). When short-term thinking is economically rationalised across all income levels, the issue isn't individual choices – it’s the systems that make those choices feel necessary.

This is where holistic financial planning becomes essential. Understanding the true lifetime cost of our decisions—whether buying boots or choosing business partners—helps us align our spending with our values whilst building genuine long-term wealth. It's not just about budgeting for today; it's about creating a financial strategy that reflects who we want to be and the world we want to live in (iv). 

The goal isn't to shame anyone for buying what they can afford today. It's to build a world where what people can afford today also serves their interests tomorrow—and doesn't come at someone else's expense.

References

(i) Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.
(ii) Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins.
(iii) B Corp Movement. (2024). About B Corps. Retrieved from https://www.bcorporation.net/
(iv) Jackson, T. (2017). Prosperity without Growth: Foundations for the Economy of Tomorrow. Routledge.

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Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 421

Navigating New Zealand’s Economic Crossroads - A Canny View

The Rate Cut Reality Check: Too Little, Too Late

Next Wednesday's anticipated 25 basis point cut to 3%[i] represents more than monetary policy adjustment—it's an admission of New Zealand's economic fragility, yet likely inadequate given our challenges. While markets celebrate cheaper money, this modest response highlights policy inertia.

The Reserve Bank's hand has been forced by unemployment climbing to 5.2%—the highest since 2016—and wage growth softening to its slowest pace in years. Private sector wages have decelerated to just 2.2% annually, whilst underutilisation has surged to 12.8%[ii]. Yet the expected quarter-point response appears tepid when economic data screams for decisive action.

As former Finance Minister Ruth Richardson commented, Treasury's warnings about New Zealand's fiscal sustainability aren't mere technical observations—they're alarm bells signalling "greater pressure on the fiscal position than we have in the last 20 years"[iii].

Higher starting debt, unfavourable interest rates, adverse growth trends, and long-term pressures from aging and climate change are converging into a perfect storm. Despite claims of $44 billion in savings, government has reallocated spending rather than shrinking it [iii].

It's hard for hope not to fade when our government appears to lack the mettle to take the bull by the horns. The "price of butter" facade may have fooled some, but not many. Butter is a product that hasn't changed in eons—full cream milk, add salt and churn. No smoke and mirrors or PR spin, just butter. Yet politicians obsess over its retail pricing whilst avoiding hard decisions on fiscal consolidation that might actually address underlying inflation pressures. 

The Great Capital Migration

Capital flows as freely as people in an interconnected world. Just as 230,000 Kiwis have voted with their feet over two years seeking better opportunities offshore[iv], smart money increasingly looks beyond our borders for superior returns.

The recent emigration shows a damning verdict on New Zealand's economic trajectory. These are productive citizens, who see limited prospects in a country determined to tax productivity whilst subsidising speculation. Human capital flight and financial capital mobility share parallels—both respond to incentives and seek the best risk-adjusted returns.

Housing Market Dysfunction Remains

Our housing market remains in purgatory, with prices stubbornly elevated while transaction volumes are sluggish. Latest data shows ‘days to sell’ extending and prices slipping nationally for six of the past seven months[v]. Wednesday's modest rate cut is unlikely to break this deadlock.

Young Kiwis are emigrating, recognising their homeownership prospects have been systematically destroyed by policies prioritising incumbent wealth over economic dynamism. The social contract promising hard work would lead to homeownership has been broken: 72% of Kiwis without a home believe buying a property is beyond their reach[vi]. Yet, many Kiwis remain dangerously over-exposed to residential real estate.

Rethinking Investment

The traditional Kiwi approach of leveraging into property and hoping for the best is dangerous where house prices may stagnate whilst debt service costs remain higher.

Global equity markets continue to climb, with the S&P 500 delivering 5-year annualised returns of 15.71%. Meanwhile, New Zealand's NZX50 has delivered a dismal 1.8% annualised return over the same period [vii].

The performance gap is devastating. A $100,000 investment in the S&P 500 over five years would have grown to $208,000, versus approximately $109,000 in the NZX50. This $99,000 difference[vii] is a documented reality for investors who remained domestically focused while global opportunities compounded wealth at dramatically higher rates.

Complexity extends beyond simple asset allocation. Tax implications vary dramatically between domestic and international investments. Currency hedging decisions can make or break returns. Liquidity needs must account for potential emigration scenarios—a consideration rational investors now embrace.

A skilled financial adviser becomes essential for protecting and growing wealth whilst navigating emotional challenges of investing against your home country's prospects.

Economic Crossroads Ahead

New Zealand stands at an economic crossroads between fiscal irresponsibility leading to Japanese-style stagnation, or making hard decisions to restore economic dynamism. Next Wednesday's timid rate cut suggests we're choosing the former.

For investors, the message is clear: adapt or suffer consequences. Capital, like talent, flows to where it's best treated. The 230,000 Kiwis who've recognised this reality are canaries in the coal mine. Smart investors should ensure their wealth enjoys the same mobility their fellow citizens have embraced.

The coming rate cut won't be cause for celebration—it will be a symptom of deeper malaise and policy impotence facing structural decline.

[i] https://www.interest.co.nz/economy/134636/kiwibank-economists-say-all-key-data-released-ahead-reserve-banks-official-cash-rate

[ii] Statistics New Zealand - Labour Force Report, June 2025 quarter https://www.stats.govt.nz/information-releases/labour-market-statistics-june-2025-quarter/

[iii] Newstalk ZB Radio Interview - Ruth Richardson (Former Finance Minister, Chair of Taxpayers Union) interviewed by Heather du Plessis-Allan, 8th August 2025 https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/ruth-richardson-former-finance-minister-says-nicola-willis-needs-to-face-up-to-the-latest-treasury-report/

[iv] Statistics New Zealand - International Travel and Migration Statistics, Monthly releases 2023-2025: Net permanent and long-term migration data showing departures of New Zealand citizens seeking opportunities offshore.

[v] Craig's Investment Partners - "Onboard" podcast, Episode 291, August 10th, 2025: Mark Lister, Investment Director, discussing OCR expectations, labour market data, global equity performance, dairy prices, currency movements, and central bank policy decisions.

[vi] MPA Mag – “Most Kiwis Say Homeownership is Out of Reach” https://www.mpamag.com/nz/news/general/most-kiwis-say-homeownership-is-out-of-reach-report/545632
Good Returns – “Gloomy Home Ownership Results” https://www.goodreturns.co.nz/article/976524736/gloomy-home-ownership-results.html

[vii] S&P Dow Jones Indices - S&P/NZX 50 Index factsheet, July 31, 2025: 5-year annualized total return data. State Street S&P 500 Index fund performance data showing 5-year annualised returns for comparative analysis. Calculation: $100,000 invested at 15.71% annually over 5 years = $208,000 (S&P 500) vs $100,000 invested at 1.8% annually over 5 years = $109,000 (NZX50). Performance gap: $99,000.

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Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)

Financial Adviser and CEO at Stewart Group

• Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz

• Article no. 420

Chunuk Bair: The Dawn That Changed a Nation

A Canny View Commemoration

August 8th marked the 110th anniversary. Today, I will pause from my usual financial themed article for one of reflection and gratitude in memory of all who fell; the 313 souls of the Wellington Battalion who gave their lives for freedom's cause.

WWI New Zealand Ensign attributed to 6/159 Private John Taylor – Quinn’s Post, Gallipoli (cropped). Collection of the National Army Museum Te Mata Toa (2000.533). Image used with permission.

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There are moments in a nation's history when time itself seems to pause - when the very essence of what a people might become hangs in the balance on a distant hillside.

For New Zealand, that moment came at dawn on August 8, 1915, when Lieutenant-Colonel William Malone led his Wellington Battalion up the slopes of Chunuk Bair. The Wellington Battalion occupied the summit before dawn on 8 August, finding it surprisingly undefended.

But with the sunrise came a barrage of fire from Ottoman Turks holding higher ground, and a desperate struggle ensued.

The peak was hard to defend – only shallow trenches could be scraped amongst the rocks, exposed to fire from Battleship Hill to the south and Hill Q to the north. As the day wore on, the situation became even more dire. Short of ammunition and with precious little water, they resorted to urinating into their Maxim machine guns' cooling systems to keep them operational - a documented wartime practice when water supplies ran out during intense fighting.

Finally, defenders were reduced to hand-to-hand combat with bayonets. Meanwhile, troops unaccustomed to mountain warfare fought in the scorching heat for hours, facing appalling conditions that tested the very limits of human endurance.

For one brief moment, New Zealand soldiers stood atop the highest point of the Sari Bair range; looking across the Dardanelles, with ancient Troy to their right, and to a Europe at their left that had never seemed so close yet so impossibly distant.

From that elevated position, they could see to the other side of the Dardanelles. It was a vista of both promise and peril - the tantalising possibility of breakthrough, and the terrible reality of what such victories demanded.

More than names on memorial walls

The courage displayed on Chunuk Bair was distinctly our own: Antipodean resourcefulness, married to unwavering duty, executed with the moral bravery that would define the New Zealand character.

Take Lieutenant-Colonel Malone as an example of everything finest about New Zealand leadership. When ordered to repeat the Auckland Battalion's ill-fated daylight attack on August 7, Malone refused, declaring he was "not going to ask my men to commit suicide"[i] and insisting his battalion would capture Chunuk Bair after dark.

Malone led from the front throughout that terrible day, conducting the defence with rifle and bayonet in hand, reportedly doing jobs from Lance Corporal to Brigadier General. He was killed around 5pm by artillery fire, possibly from friendly forces. His death marked not just the loss of a remarkable soldier, but the end of an era of innocence for a young nation.

Among those who fell was John Blair Thompson, my great-great uncle. A sandy-haired young lad from Edendale, a cheese maker; his sacrifice represents thousands of families forever changed by those distant battles.

Of the 760 Wellington Battalion men who captured the summit that morning, only 70 walked away unwounded.

My uncle's grandfather Charlie 'Nuts' Goldstone was among the survivors, albeit badly wounded, having served in the signal corps alongside Corporal Cyril Bassett, the New Zealand Expeditionary Force's only Victoria Cross recipient during the Gallipoli campaign. For three days, Bassett repeatedly crawled through deadly ground, repairing telegraph cables while Turkish rifles cracked overhead.  His citation records how he "showed most conspicuous bravery" laying telephone lines "under very heavy fire."[ii]

Without these communications the men would have been completely cut off, unable to call for artillery support, reinforcements, or medical assistance. Bassett's courage under fire represented the unsung heroism that made the difference between survival and annihilation.

Each name on those memorial walls represents not just a life lost, but futures unrealised, families incomplete, and dreams unfulfilled. These were not professional soldiers, but citizens who answered their country's call - farmers and clerks, fathers and sons, united in their belief that some causes transcend personal safety.

The Price of Becoming

By August 10, New Zealand troops were relieved by British battalions who were quickly overwhelmed after fierce Ottoman counterattacks led by Mustafa Kemal, and the summit was lost.

The cost was devastating. Over five days, over 880 New Zealanders were killed and close to 2,500 wounded. Yet, something invaluable emerged - a national identity forged in shared sacrifice and mutual dependence.

Some historians argue that 8 August is more significant to New Zealanders than ANZAC Day, because it was our troops' worst and most outstanding day on Gallipoli. While April 25th marks the campaign's beginning, August 8th represents the pinnacle of New Zealand's military achievement - the day when our troops reached the highest point and held it against overwhelming odds, proving our nation's mettle in battle's crucible.

The view from Chunuk Bair was perhaps the first time New Zealanders truly saw themselves as they were: no longer colonists looking back to Britain for guidance, but a people capable of standing on their own in the community of nations. This emerging independence was symbolised by Malone himself, who was well known for flying the New Zealand flag at his former command post at Quinn's Post, choosing our own colours over the Union Jack. The New Zealand flag, officially adopted only in 1902 and still in its infancy by 1915, made its first recorded battlefield appearance at Gallipoli - carried unofficially by soldiers who identified with their homeland's distinct symbol even while serving under British imperial command.

Remembering Forward

As we commemorate this anniversary, we honour more than just those who lost their lives. We remember it because these events shaped who we became as a people. The courage of Malone and his men – and thousands like them – all became part of our national DNA.

In our present, it's easy to forget that the freedoms we enjoy were purchased with such terrible coin. The democracy we take for granted, the independence we assume as birthright, the international respect we've earned - all flow from moments like dawn on Chunuk Bair, when ordinary New Zealanders did extraordinary things because they believed in something larger than themselves.

The summit may have been lost, but the battle was won in ways its participants could never have imagined. They gave us not just their lives, but their example. They showed us who we could become.

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This article is dedicated to the memory of my great-great uncles John Blair Thompson and John Hewitt and all who fell at Gallipoli, and to the families who bear their memory forward.

[i] https://ww100.govt.nz/lieutenant-colonel-william-george-malone

[ii] https://nzhistory.govt.nz/media/sound/cyril-bassett-and-chunuk-bair

• Nick Stewart (Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha) is a Financial Adviser and CEO at Stewart Group, a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions. Article no. 419.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz