I inherited some money and I'm not sure what to do with it - Ask Susan

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Send your questions to susan.edmunds@rnz.co.nz

I have recently inherited some money, and am considering how to invest it. I'm interested in the idea of a KiwiSaver mirror fund as I don't have much financial knowledge. Should I be looking for a different fund provider from either my or my husband's KiwiSaver, for diversification, or are these sufficiently diversified that it wouldn't be too risky to stick with one or other of these providers and fund types? Also, are there independent financial advisers out there who can be consulted on these matters, for a fee?

Dean Anderson, the founder of Kernel Wealth, says KiwiSaver providers and their funds are all set up about the same.

"They may have different custodians and licensed supervisors but be it the big bank or the smaller entrant, they have the same independent checks and balances.

"The same goes for 'mirror' investment funds. When a fund has a product disclosure statement, which includes details of who the scheme's custodian and supervisor are, it is a 'retail' fund with the structural nature of the KiwiSaver funds. This is very different to say a wholesale fund, which doesn't have the protection of a requirement for independent supervisor, custody and so forth."

He says that means you can focus on the fund and provider that are the best fit for you and your investment goals, rather than looking for a partner purely for safety purposes.

I can see why you might consider a different provider from the one that you currently have your own KiwiSaver with, though, if you wanted to broaden your exposure to different assets. KiwiSaver funds are diversified across their investment classes, but you can find different providers offering funds that invest in a wide range of things - cryptocurrency, property, companies in specific parts of the world, and so on.

If there is another investment strategy that appeals to you in addition to the strategy you're pursuing with your KiwiSaver, it could make sense to have your KiwiSaver with one provider and your other investments in another.

You can definitely get advice. Financial advisers should be upfront with you about how they are paid - whether that's a fee for service or a commission. You can check out sites like Financial Advice NZ's to look for advisers who might be a fit.

Anderson points out that advisers need to have a disclosure statement on their website, which will give you information about their fees and the providers they work with.

"Ideally you would want an independent adviser that is able to provide advice on a broad spectrum of options, rather than just listing one or two providers."

If my parents sell their home and go to live in a care facility, can they deposit the proceeds of the sale into my revolving credit mortgage account, saving me the interest, whilst ensuring the money is still available to pay their monthly account with the rest home? Of course they can if they wish, what I'm asking is what tax obligations (if any) will I suffer?

There won't be any tax obligations here - you would probably hit trouble if you tried to apply for a rest home subsidy for them, though. Another option you could look at would be an offset mortgage, where they keep the money in their own name in an account that offsets the interest on your home loan.

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