Who gives you financial advice?

“Chief executive Charles Anderson said the level of qualification among the SovNet force varied from nothing more than high school exams through to a handful with university degrees.”

Maria Slade, NZHerald

That’s the CE from Sovereign, an insurance company, and he was referring to the need for their 4o0 financial advisers to become certified within the next few months. This begs the question:

Why would you take financial advice from a group that where almost everyone does not even have an undergraduate university degree?

A degree confers two benefits. Firstly it demonstrates to employers that a potential employee has a certain level of intelligence and discipline, and more importantly has the ability to keep learning. Secondly it allows the graduating student employee to send a signal to potential employers that they are serious enough about their working career to take 3 to 4 years out to prepare for it.

While there are plenty of cases where people demonstrate that a degree is an unnecessary requirement for a successful career, it’s astonishing that only a handful out of 400 financial product sales people have a degree.

Insurance is a complex product. To decide whether to buy insurance or not you need to be able to correctly assess your own risk of loss, your ability to mitigate that risk, the cost of the premium, the likelihood of the insurer to pay and the alternative use for money used for premiums. You also need to be able to parse the complex documents that the insurers provide as it is the individual clauses that determine the value of each contract.

Advisers need to take all of this into account, and genuinely help clients assess the options. However insurance agents are usually guilty of instead emphasizing the low probability risks and selling on emotion – and why not, as it clearly works.

But Sovereign and other firms don’t just sell insurance these days. The Sovereign website offers a range of financial products, including investments and homeloans. That means the advisers need to really understand the financial goals, constraints and requirements for their clients. They are dealing in an area that has enormous levels of impact for their clients, and it requires a very high level of trust and competency.

There is plenty of evidence of a lack of honesty and competency in the industry – starting with the horrific advice given to investors in the collapsed finance companies. All in all the new law is necessary.

While I would not expect an adviser to know about Black Scholes or the efficient market frontier, I would expect them to be recommending a well diversified portfolio of assets across asset classes, industry sectors and geographies. I would also expect them to know that churning a portfolio is almost certainly going to result in lower returns, and indeed that funds almost always under-perform the market in the long term.

I believe that the large insurance companies and banks will actually do well out of this new law, at least in the short term. They have the ability and wherewithall to make sure that all of their staff attend the necessary courses and sit the exams in time. AXA has already trained 180 advisers in their own academy, and are tracking to finish before the law takes effect. While some staff will not make the cut in the larger companies, those companies will keep the majority of their advisers, while many other advisers attached to smaller companies or self-trading will fail to do the study.

The best form of imitation: Rugbyheaven.co.nz and SuperXV.com

Fairfax NZ’s Rugbyheaven.co.nz site has been subsumed into the Stuff site. It’s all about making sure the traffic goes to one place (Stuff), and beating the total traffic and visitors at NZHerald. I was inside Fairfax Digital at the time, and felt the team did a great job with the design, and it is sad to see it gone.

A little of the look lives on, with the RugbyHeaven logo moved across to the new site integrated into Stuff. The standalone site extended the look of the logo, and used a lot of black – one method of demonstrating that it was principally there to support and report on NZ rugby.

Now we can see a bit of the way the old site used to look by looking at the new SuperXV.com site – which will be next year’s version of Super14.com. They have used a lot of the “black with holes” look, and the logo itself is very similar. I’m a bit surprised though at the use of black – a colour associated with the All Blacks, and not one that Australians or South African will really resonate with.

It’s completely fair though for SuperXV.com to copy the old Rugbyheaven.co.nz look. Firstly because the old site no longer exists, and secondly because Rugbyheaven.co.nz leaned heavily on rugbyheaven.com.au for design influence. That site has also lost its independence and is merely part of the smh.com.au empire.

The unanswered question for Fairfax and other publishers is whether it is better to have one enormous site with many sections, or standalone sites that capture and retain a certain market? The answer is a function not only of what audiences want, and you can measure that through traffic, but also on what is easier to sell for the advertising sales team. To me the integrated site, while not as fun, is the way to go for now. Advertising sales can still offer up section sponsorships to customers, while readers are less confused by the multiple sites, and traffic will be higher. On the other hand the international rugby fan traffic will be lower, but that’s harder to earn money from anyway. I would like to see a more distinctive look for rugby section though.

Notes on the iPad

These are some very rough notes that I wrote to prepare for an interview on Radio New Zealand yesterday. I wrote the note, and am posting this from, the iPad.

This morning I bought six ipads into New Zealand – they are all allocated sorry. And yes – I did pay GST on them.

Overall Vibe
1: at the stores there was constant stream of purchasers, queues were small and fast
2: everyone wants to play with it. It is a beautiful product
3: We are all still working out what it is for

Ebooks
1: the ipad is a better kindle than kindle for short reads, out of the sun.
2: in fact better than anything in Nz as kindle not even here yet..
3: though neither is iPad

Apps
1: apps so far are stunning. Pages, numbers, keynote, flight control HD. All $10
2: news nytimes, BBC stunning, but little content. The future is to pay for it
3: pricing is still an issue for mags and newspapers. Not realistic yet – after all we are no longer delivering printed paper to the home

Other uses
1: Movies – clean the screen first but otherwise wonderful with headphones
2: games – wonderful device, going to be great. Flight control is beautiful
3: work – not so great for complex tasks, good for single documents, no references, but early days

Feel
1: Sits on then lap, knee, table. Solid feel, not as light as kindle, robust, high quality.
2: battery slow to charge but seems to last well
3: typing is easy – horizontal or vertical

NZ
1: not in Nz yet, not sure when
2: some iPad apps on nz iTunes, but not many and no apple ones, kindle?
3: iPad AppStore fails unless you use the usa store.. Need usa credit card or lots of gift cards in usd

Adoption
1: Geeks and early adopters have it now (in the USA). Security in San Francisco International airport said they had seen a content steam of them. (6 was a record though)
2: Next step is to see new applications doing new things
3: After that the next wave of adopters, new product, OS

Overall/future
1: Technology is compeling – use the hands all over the screen
2: Love to see this integrated with laptops. Perhaps the new air?
3: Single mode is a pain, keeps it fast though; No flash is not upsetting – mostly ads and poorly designed websites

Impact
1: media – venue for gloss and newspapers
2: games – the medium is new, interaction brilliant
3: apps – another ecosystem has opened up, prices are good for now

Earthwise Valley scam

I’m adding my little google juice to Dave Farrar at Kiwiblog and Fair Go. Earthwise Valley is, astoundingly, still in operation. It deserves to be shut down. Kiwis should picket this place, hostels should paste warnings on their bulletin boards and the fair trading act should be invoked if possible.

Here is one visitor’s recommendation:

“It was an empty field with a pile of junk in the middle of it, with no gardens and no facilties, basically nothing there. It’s definitely left a bitter taste in my mouth”

Enough said

The iPad is the best Kindle

It’s hard to be objective about the iPad, which I acquired in San Jose on launch day, yesterday.

The reason I bought it (and the reason I suspect I have orders for several more) is to try to figure out just what it is useful for. I already have lots of devices, and the iPad sits somehow between my MacBook Air and Kindle DX, with the iPhone hovering for attention as well.

Since the purchase the Kindle has been dormant, the iPhone in normal, non-roaming, use and the Macbook Air has been at about 50%. The true test wil be when I get back to New Zealand – what devices will I travel with? Which devices will I use at home?

There is no doubt that the iPad is transformational, but it’s not a perfect working tool.

For example I purchased Apple’s word layout program Pages for the iPad, and originally wrote this post using that otherwise lovely application. However I failed to figure out how to copy the content from Pages over to the WordPress application or website, and I also failed to figure out how to easily upload the photos to WordPress. I did manage to upload them to Flicker using the iPhone Flickr uploader application (the screenshots on the previous posts were all uploaded directly from the iPad) but getting those links and inserting them into a post on a single mode device was just too painful.

But let’s look at how good the iPad is as a book reader – and see whether I can knock the Kindle out of my travel bag.

Kindle has an application for the iPad and, to cut a long post short, it’s the killer application for me. The application provides for an experience that is better than the Kindle application on any other device – including the Kindle itself, my Macs or iPhone.

I downloaded the free application, logged in to Amazon and got most of my books on to the iPad within a few minutes – all while setting the iPad up at the Apple store. The book selection screen is lovely – much better than the Kindle’s black and white list.

The books themselves downloaded quickly, and, even better, in full colour where appropriate.

However the iPad is not great in direct light. The screen reflects everything, and the battery life is not the best. It’s a lot heavier and fatter than the Kindle and you are constantly drawn to do something else – like lay games, check twitter or download some more expensive applications.

The Kindle device is strictly black and white, and takes an age to respond to commands and does only one thing. So while changing the page takes a second or two and fast flicking back and forth is simply out of the question, methodical reading of books from cover to cover is done superbly. Moreover the the Kindle has better resolution, a matt screen and much longer battery life.

However for fast readers the Kindle can be quite frustrating, and it’s useless for scanning through reference books, or even for looking back a couple of chapters to see who exactly was who again. So take your pick. Indeed – pick both, and use the iPad every day, and the Kindle when you really want to settle in with a book.

But all in all the iPad for me is a better Kindle than the Kindle. Most of my reading is over and done with inside of an hour, and the extra weight is more than made up for by the usability and the extra utility. But that’s after one day – let’s see how I feel after a week or three.

What does it mean?

I spent several hundred dollars with Apple yesterday – buying an iPad, the iWork suite and a bunch of other applications. Incidentally applications for the iPad seem to be 10x more expensive so far than aps for the iPhone – that’s the first mover advantage I guess. Despite the prices I’m going to keep buying applications through Apple, especially if the iWork suite (at $10 per application) is any indication of the quality level now possible.

But I was very happy to see my Kindle books appear on the iPad, and I will continue to buy books from Amazon rather than from Apple. The hundreds of thousands of new iPad owners also don’t need a Kindle to buy Kindle books – and so Amazon should do very well out of the iPad and like devices.

To keep selling Kindle devices Amazon will need to sharply drop the price, and focus on making them both lighter and more robust, and with a etter range of features. Kindles will remain the best (for now) for longer journeys, and for times and people when the extra distraction of the internet and games is not desired.

Meanwhile once again Apple has delivered a must-have product. Thus the fortunes of both companies is assured.

Sure – Amazon will at some stage emerge with a fast colour Kindle, and Apple will extend the range of books that they have and get better at selling them. But Amazon knows our tastes in books, knows how to deal with publishers, with authors and with readers who like reviewing, and increasingly knows, thanks in part to Apple, how to price correctly. Amazon also let me read my books on a bunch of different devices, so while there is, for now, digital rights management (DRM) on the books, the impact is negligible. Apple meanwhile knows what we want before we want it – a mark of a great design-led company – and will make more than enough money from the more expensive iPad applications to compensate for not locking in the ebook market quite yet. .

Games

iPhone aps on the iPad

What better way to test iPhone apps on the iPad than to check out ones that I am involved with. Here is Lingopal:

It’s in full screen (2x) mose, and really is enormous. If you tilt the screen horizontal then the dislay can be read across a decent sized room:

Overall Lingpal seems to work well, and the speaker is a decent one, so the translations come through loud and clear.

This shot of the myTours Welly Walks app (free) shows the 1x size display.

Zooming up to the full size display is fine, but the photos start to look a little low resolution.

Overall text based applications look great, but graphics and photos suffer in the exploded view. Everything seems to just work though.

The iPad and our Kiwi websites

I’ve picked up an iPad (and hopefully several more for some other folks) here in San Francisco, and decided to test it out on a host of sites. Some pass, some fail and some need some work. This is a page mainly full of screenshots, and mainly of interest to those that work on the sites. So I’ve hidden most of it under the fold.

Let’s start with the media:

Stuff looks fine:

But forget about moving the page around – not that I ever do anyway.

and the popular quizzes are a no go area:

Note the advertisement served to me here in the USA –  it’s for the Kindle, but it is aimed at those travelling overseas. The Kindle is STILL unavailable in New Zealand – but the iPad will be.

NZHerald’s site looks and worked fine. For both sites if there were flash advertisements then they failed gracefully.

The iPad lets you zoom right in really quickly – and images can look pretty jaggy when you do so. This is solveable, but perhaps at the expense of even heavier pages.

Trade Me delivered the mobile version – wrong move, but it should be easy to change to default to the normal site.

Continue reading “The iPad and our Kiwi websites”

Our power prices have gone up – so switch to us

I’ve been travelling for the last 10 days in the USA – and for another week as well. That, and Pacific Fibre’s launch, explains a little about the paucity of posts here, but it also means I missed out on the recent news about sharply increasing energy future prices.

The sharp rise in energy futures means that we have had to increase our prices for PowerKiwi products on Powership by around 3 cents per unit in a bit under two weeks – with the prices rising for the second time on April 1st.

That’s tough to take, but it is standard for the energy component of electricity prices to rise for the winter period, as demand increases without much movement in supply. It’s also how Powershop works – charging prices related to what is happening on the market, rather than a single price for the year.

We suspect that prices may rise again this winter, albeit not as sharply.

But now that we are at our worst – go ahead and test us out. Does your power company charge more per unit for the whole year than PowerKiwi and other Powershop retailers charge right now?

To check, simply take out your electricity bill from a traditional supplier, and look at two numbers only – the number of units of electricity that you consumed, and the total amount you paid – including GST and all those daily charges. Now divide the dollars by the units to find out how many cents per unit you are paying. Do this for a number of bills if you like.

Now comparing is hard – the price you pay depends on where you live, the amount of electricity you use, the number of meters you have and so on. But if you are using the average of 8000 units per year, and have one meter then your FlowerPower prices, including GST and all other charges, right now would be:

Auckland (1 meter, 8000 units/year)

Wellington (1 meter, 8000 units/year)

Christchurch (1 meter, 8000 units/year)

And of course other cities have other prices – but these are representative. These prices do change – it’s a marketplace after all. Abve all the prices you get from your current electricity retailer and from Powershop are personalised – there are plenty of factors that go into those prices. But do compare the above to your own supplier’s prices, and then switch.

Getting the basics right – airline bookings

I’m booking a flight back from Seattle to San Francisco (actually San Jose) and can’t let the opportunity pass to learn from the best – and the worst. Here are some screens that came back after a search for flights this Saturday – conducted just now at 11am or so in a coffee shop in Seattle.

The Winners

First: Southwest

They do the basics right – everything I need is on one page and I can make a decision very quickly. An excellent job.

Next: Virgin America

It’s even simpler than the Southwest site, though sadly they don’t yet fly to San Jose.Another superb job, and they deservedly got my booking to fly here from San Francisco International.

The Losers

For some reason I tried United – an airline which I refer to as UNTIED and have sworn never to fly again after a 50% or so record of losing my bags and fantastically poor on-board and check-in service. Their website didn’t change that verdict.

(I swear this wasn’t set up).

After booking the Southwest flight I decided to book a couple of internal Air New Zealand flights for when I get back. After entering my search I got this brick wall of death:

It felt like a big “F-You” from Air New Zealand to everyone offshore (or maybe more than that). Frankly I am pretty annoyed and considering just staying in Auckland instead of going home for the night. Yes – that’s what I will do.

Airlines, like all stores, can win or lose a customer at each screen. When we run a search for flights then the next screen should show decent results, let the customer select the day, flight time and class of flight and commit to travel. The process needs to feel friendly, to project professionalism and the sense of reliability and safety that airlines must have infused through them. The values of the website need to reflect the values of the business. Air New Zealand and United failed at this – and goodness knows how many customers they lose as a result. I expected it from United.

Tablecloth trick

A great video from the folks at BMW.

The takeover of once boring but always reliable BMW Motorad by horsepower crazy lunatics continues. These days BMW bikes (depending on the model) have almost too much power but still retain the core BMW values of sturdiness, practicality and safety.

All of the BMW’s that I have ridden have a certain laid back attitude – one that does not demand that you ride them like a crazy loon, but still that offers that ability if you wish to wield it.

If you’d like me to try this on your table using my portly BMW R1200GS Adventure then let me know. Results may differ.

Federated Farmers – Withdraw that press release

A strange piece written by Federated Farmers appeared on infonews just now. It’s aimed at influencing those observing the free trade negotiation happening in Melbourne.

It starts out tough:

Federated Farmers believes American dairy farmers have nothing to fear but fear itself, if New Zealand and United States enter into a free trade agreement.

1: Now that’s a pretty challenging thing to say – it reeks of “go on – I dare you”

American dairy farmers need to get with the program that free trade will make them more competitive.

2: That’s an incredibly aggressive thing to say – If you have you ever been told to “get with the program” how did it feel?

We’re a little island in the bottom of the Pacific and America’s scared of us. It seems a bit strange.

3: This is a taunt – like the little guy in the schoolyard saying to the big guy “are you scared of me?” – with predictable results.

“I think they’re threatened by how efficient our dairy farmers are.

4: This means “we are better than you” and “I’m scaring you” – again it’s schoolyard stuff and it is doubly insulting as the USA farms are often huge and incredibly productive. They do, after all, produce four times the amount of milk that NZ does.

“They find it very hard to understand that farmers here can work without any subsidies while they cost the average American family US$322 every year at the checkout.

5: This is more taunting – and a swipe at the subsidies. Subsidies are politically untouchable in the USA – and the last people that want to hear about their potential removal are farmers, while the last people they want to hear about it from are farmers from overseas.

“It’s sad that the dairy farm lobby cannot see that these subsidies are not helping them and that protectionism is not the way forward.

6: It’s more sad that the Federated Farmers can’t see that subsidies are literally money in the bank for US farmers, and that Federated Farmers themselves squealed when NZ’s SMPs were removed in the 1980s.

“While many of America’s dairy farmers are hooked on a subsidy drug”

7: This is just abusive. Calling American farmers addicts is simply inflammatory – and will elicit a unified and tough response from those abused.

we’re seeing the emergence of an enlightened group of dairy farmers who realise dairy subsidies are completely unsustainable. They’re the people we want to do business with.

8: If those people have read the rest of this article then they are going to be pretty unhappy – “unenlightened” in fact.

“America may be the land of the free, but their dairy market is anything but,” concluded Mr McKenzie.

9: And a final bit of abuse against America. That’s just not the way to do business in the USA – which is an incredible place if you can get it right.

Let me suggest an alternative positioning for the New Zealand Dairy industry (and country) to make to the USA farmers:

Proposed Positioning for NZ Dairy Farmers to the USA

1: American consumers are demanding an increasing amount and variety of milk products.

2: Farmers in the United States produce 79 billion tonnes of milk each year.  New Zealand farmers produce 17 billion tonnes each year, all of which is either consumed in New Zealand or exported to existing customers abroad.

3: New Zealand milk products are aimed at the top end of the market for consumers that prefer a higher fat milk.

4: New Zealand producers, while they are paid no subsidies, are requesting open access to the US market only. They are not lobbying for the removal of farming subsidies in the USA.

5: Open access to the US market will allow US farmers to invest in the NZ industry and vice versa, merging the best practices from each country, increasing product ranges and profitability for the industries in each country.

Electricity company puts prices down!

PowerKiwi, a company that I am a co-founder of, today dropped prices for Flowerpower for most Powershop customers. Pricing for electricity varies by location, annual usage and the type of meters you have, but we are pleased to be able to do these special, pre-winter season, prices. Prices will, sadly, rise during the winter period as the energy prices rise, but unlike normal power companies Powershop suppliers drop their prices at the end of the season when wholesale prices fall.

In some markets we are now the cheapest top-up pack, as in the example above. Top-up packs are what Powershop automatically buys for you if you simply sign up and forget. The price includes GST and daily charges – but as mentioned above prices vary a lot across the country.

In other markets we were unable to match the Standard Power (Powershop’s product) price for top-ups, but were still able to offer the lowest price overall, using our $82.90 top up pack:

In yet other markets we were unable to match the lowest prices, which means, of course, that those customers were already getting fantastic prices from Powershop’s Standard Power. Also – we can expect that Standard Power will react, so don’t be surprised if we are not the cheapest – but do enjoy the cheaper prices!

Powershop has been growing quickly over the last year – doubling in size in the last 3 months. The reason is simple – the stories are spreading on how much people are saving by switching to Powershop.

So if you have switched then keep telling everyone you know – the more people we have on Powershop the better the shop will be and the more competitive we can make the pricing.

If you have not switched to Powershop yet then ask someone who has, and ask them also how good it is to be able to track your power use and spend, to enter your own meter readings, to buy in bulk and save and to do all of this without ever handling a piece of paper.

And yes – we are still offering $20 of free power from FlowerPower and Powershop for new customers.