As he retires, he tells Business editor Dene Mackenzie his main satisfaction is his clients knowing they were not getting into outlandish investments.
Peter Smith had a slightly unorthodox journey into a financial planning career which lasted 27 years.
Born and educated in Dunedin, Mr Smith graduated from the University of Otago with science degrees, majoring in geography and geology.
He moved to Australia and worked for three years on some of that country's largest hydro-electric projects before returning to New Zealand in the late 1970s, to work for the Ministry of Works as a scientist.
However, after a restructuring of government departments in the mid to late-1980s, Mr Smith found himself making his scientific staff redundant. He then made himself redundant and was thinking about his options.
Although being offered a science-related job in Wellington, Mr Smith turned it down after his son told him he would rather have a father out of work in Dunedin than one with a job in Wellington.
''I saw an advertisement for a financial planner in the paper in late 1987 and found myself working for Bruce Wood, at Professional Financial Planners. I wrote the plans and Bruce did the front work.
''I think I was employed mainly because of my computer skills.''
From there, Mr Smith made steady progress through the ranks, moving to the Bank of New Zealand and a specialised advisory division, independent from the bank. There, he and his team would target BNZ clients who had money invested elsewhere and talk to them about other investment options.
That worked successfully until 1995, when the BNZ was taken over by National Australia Bank and the rules changed. Mr Smith decided he needed a change of direction and started work with Dunedin law firm Downie Stewart, as the firm's financial planner.
In 2004, it was again time for a change and Mr Smith decided to open a business.
''Other people had done it and I asked myself, why not me? It was time I did something for myself so I set up my own business.''
As things progressed further, the latest - and last - change came when Mr Smith joined with other independent planners to form the Kepler Group.
Looking back during an interview with the ODT, Mr Smith said there had been major changes with the industry in his 27 years as a financial planner.
Financial planning was now perceived as a profession when previously planners had been lumped together as ''insurance agents in disguise'', he said.
''Most people who sell insurance are very good at what they do because they now concentrate on what is best for their clients. I decided early on not to sell insurance and to concentrate on investments.''
Before the election of a Labour government in 1984, financial controls were restrictive, Mr Smith said. Hire purchase, car finance and managed funds were not in existence.
To obtain a mortgage, people had to have a large deposit and go on a waiting list. The banks were restrained by strict lending criteria but alternative lenders, such as building societies, were able to offer ballots and attract depositors through slightly higher interest rates.
''The shackles came off in 1984. Hire purchase became available on anything. Mortgage lending rules changed dramatically, insurance became unbundled, the dollar was floated, it was possible to borrow overseas, interest rates took off, superannuation as cash accumulation became available and hundreds of start-up companies appeared on the stock exchange.''
Many people, particularly in government departments, were made redundant. Many of those made redundant bought rental properties on borrowed money. Mortgage interest rates were about 20% but nobody cared, as rampant inflation doubled the property values within five years or less, he said.
During the 1980s, New Zealand's average inflation rate was about 25%, peaking in the last quarter of 1986 at 36%. The sharemarket ''went crazy'' with high volumes on borrowed money. Many investors had a bullet-proof mentality but several of the new companies proved to be unsustainable, resulting in a huge correction in October 1987.
''The fallout was huge, as fortunes disappeared overnight. Grandma's advice of never having all your eggs in one basket was completely ignored.''
During the past 20 years, there had been many boom-and-bust cycles. In 1991, there was a bond crisis. In 1997 there was the Asian sharemarket crash, 2000 saw a world technology ''wreck'' as many IT companies folded and in 2001, the terrorist attacks took place in the United States.
In 2007 and 2008, there was a major failure from prime mortgages in the US and New Zealand, resulting in many failures of finance companies. On paper, many people lost a lot of money but many of those had since recovered their losses as markets rose, Mr Smith said.
''The correction of 1987 doesn't exist now. It's from there we note what has happened. Many of the people who lost all their money answered ads in newspapers - sending away coupons and a cheque. Those outfits were offering 2% more than someone else and people were chasing the returns.''
Mr Smith believed many of the mortgage fund collapses were due to customers demanding their money back, forcing those fund managers into forced sales. Not all of the funds were dodgy.
The investors in failed Provincial Finance had received all their money back, with some interest, because the company founders put in their personal wealth to ensure their clients were repaid, he said.
But over the years, he had shaken hands with a few fund promoters and knew immediately he would never put any money with them.
But the ''greed over good'' mentality still existed. Recently, Mr Smith had a client demanding a 10% return on their investment. While Mr Smith was confident a 10% return was possible over the long term, the client left after three months, chasing a higher return elsewhere.
There had also been a noticeable change in the promotion of investments, Mr Smith said. Gone were the days of lavish conferences and gifts. Christmas presents from fund managers had dried up because no-one wanted to be seen to be doing anything untoward.
Financial planners did not sell products, they sold concepts, which contained products suitable for clients. All clients received the same degree of service for which they were charged in recognition for the service, he said.
As he signed off, Mr Smith paid tribute to his loyal clients. In Dunedin, and Otago, financial planners very rarely came across clients of competitors, as people remained loyal to their advisers.
''It's a case of trust. Clients get used to your style and become educated that markets go up and down.''
And while his column had received some brickbats over the 22 years, he had also received some praise.
The Smith file
• Peter Smith.
• Aged 67.
• Educated at Otago Boys' High School and the University of Otago, where he graduated with science degrees with honours. In his first year at university, he majored in billiards.
• Married to Lesley and they have three adult children. Worked in Australian hydro electricity projects, and the Ministry of Works, in New Zealand, as a scientist before being making himself redundant.
• Worked in various roles as a financial planner since 1987 before forming his own business.
• Otago Daily Times financial columnist for 22 years.
• Interests include: Rotary, secretary of the Civil Service Harrier Club and an executive member of the Settlers Association. Lately, he and Mrs Smith have been travelling to visit children overseas. Gardening on a lifestyle block which has a ''fair bit of gorse''.
• Reason for being in Dunedin: When he became redundant, his son said he would rather have a father out of work in Dunedin than one with a job in Wellington.
KiwiSaver
The introduction of KiwiSaver in 2007 had been fantastic. There was $25 billion invested and the total funds were growing about $4 billion a year.
It was not yet compulsory, but about 62% of the population under age 65 had joined the scheme. Average contributions totals were about $30,000 for those who joined from the start.
New Zealand infrastructure was starting to benefit from KiwiSaver as most of the funds were held internally by providers in government and corporate bonds and some 30% of contributions were invested in the New Zealand sharemarket.
However, too many people were still in default conservative funds and should make the effort to review their investments and move to something more suitable. Anyone with 20 years to retirement should be in growth funds.
- Peter Smith
