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New Zealand; a land of opportunity but not without risk.

01
No matter what background we have or what country we or our forebears come from, there is no doubt New Zealand offers opportunities to those prepared to work for them. This pioneering spirit in a modern world has become more often referred to as our entrepreneurial spirit…where grit and determination meets execution! We can spend time working for ‘the man', building our know-how and experience or we are already experienced business people from other places, and one day we think, ‘I could do this myself. Take my dream, start a business, (or start again), employ some help. I don't want an empire, I just want to work for myself and get a lifestyle out of it for me and my family.'

This attitude is so common that small to medium sized enterprises (SMEs) in New Zealand employing five or fewer people now number over 430,000, employing more than 560,000 people representing immeasurable worth to the national economy (GDP). But there's a threat lurking beneath these impressive statistics: research tells us that New Zealanders are underinsured compared with other countries, with only about a third of the investment other OECD nations put into protecting the livelihoods of the people producing this GDP. At GFS there is too often evidence that business owners, many of whom are the key person in the business, frequently lack some or all of the cover they need.

This is in part because many see insurance as expenditure rather than protecting their dream. One role of GFS is to show people than insurance is not a cost, but on the contrary a vital element of financial wellbeing. A second role is to provide products and services that facilitate that wellbeing.


The diagram shows all the parties at risk in ‘The Circle of Life'. The business is underpinned by its key people, who are subject to general life risks - accident or illness that could leave them temporarily or permanently unable to contribute to the business.

That financial impact flows on to the owner/s of the business (often also a key person), who is responsible for the debt, both visible and invisible. Some owners think they don't need business or key person cover because they don't see any outstanding debt - they wholly own the business and the business assets such as vehicles and so on.

However, that's just the visible debt. The cost of exiting is invisible - if you suddenly had to close the business, what would it cost you to pay all current utility bills, rates, holiday pay and other entitlements? What about your lease commitments too? Too often these issues can be overlooked.

Then there are the families; the people supported by the business. What does the owner's lifestyle cost? What about their staff's lifestyles? Who and what is dependent on the business, and what happens if that revenue stream drops or stops? But of course, ‘the circle of life' only completes because the business also is dependent on the very people needed to drive revenue.


The advice GFS offer their clients looks to deal with this value chain. Certainly, it is the responsibility of business owners and key people to seek advice to get the cover they need. But GFS bear equal responsibility, in that they must help to simplify this process and support their clients transfer of any financial liability they are uncomfortable with should a life risk event strike. Getting the insurance you need should not be complicated or expensive relative to the risks you face – Talk to GFS today about how they can help you.

Call 09 2555500 email insurance@globalfinance.co.nz

 

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How can you save on your home loan after a fall in OCR?

Written by Saurabh Gupta on December 10th, 2015.      0 comments

Today, Reserve Bank of New Zealand reduced the Official Cash Rate (OCR) by 25 basis points to 2.5% Reasons cited include boosting economic growth and employment. According to some news publications, RBNZ has also warned that further cuts are unlikely – however some economists, such as those from ASB Bank may be expecting further cuts.

This will imply a fall in floating interest rates for home loans but not necessarily the fixed interest rates on home loans.

Home owners who want to take advantage of the fall on their fixed home loan interest rates, will have to keep a few things in mind before taking a decision. Firstly, will fixed home loan interest rates fall or not; and until when will they keep falling? Secondly, what is the break cost on their existing fixed interest rate home loan? Only your bank can calculate and let you know it – so you may want to check with them. The two biggest factors that make the difference to break cost are:
1. How much of your fixed loan term is remaining?
2. The difference between your fixed interest rate and the new interest rate.

For e.g. if you fixed your home loan interest for 2 years at 5% only 4 months back, it is quite possible that the break cost will be quite high to bring it down to say 4%. However, if you wait for another 3 months, interest rates could have come down to 3.85% while the loan term remaining will also reduce. At that point in time it is possible that the interest savings may be big enough to pay the break cost and fix the loan again.
However, interest rates can’t be predicted so it depends on your judgement and risk appetite as to until when you want to wait.

As for helping you calculate your savings versus break cost you may want to contact Global Financial Services on 09 2555500. We are based out of Auckland and are NZ’s top mortgage broker and adviser because we have always try to save the interest cost on the home loans of our clients. Secondly, our focus is on being proactive and providing the best customer service.

About Global Financial Services Ltd
Since 1999, GFS has been helping Kiwis realise their dreams by arranging loans to purchase their first home, investment property, business or commercial property. GFS also arranges life, medical and personal risk insurance to help Kiwis protect their life and mortgages in unforeseen circumstances.

GFS is New Zealand’s top mortgage adviser. It has arranged over $3.5 billion of mortgages and over $2.5 billion in personal risk insurance cover since 1999. Every year GFS caters to over 1,500 customers for their mortgage or insurance needs so that they can meet their financial goals.

GFS has won 28 prestigious awards & recognition including:
1. New Zealand’s top advisor awards from ANZ Bank (2012-15), ASB Bank (2014, 15) and AIA Insurance (2008-15) and The New Zealand Mortgage Mag.
2. Best customer service awards from Westpac Auckland Business Awards (Auckland South, 2015) - delivered by Auckland Chambers of Commerce and ATEED and Indian Business Awards 2014
3. Best Financial Adviser Award (Mortgage and Insurance) from BNZ INIBA awards 2015

The GFS team believes this is because of focus on savings and service to the customer. They think of themselves as mortgage advisers, and not just brokers, because they take time to understand customer needs and goals to tailor each loan to fit with their unique situation. GFS provides full assistance to its customers at the time of insurance claims. Its claim settlement ratio in respect of life insurance is 100%.

 

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