Category Archives: Pro Experts

Hawke’s Bay’s leading professional service advisers & leaders

Finding your Ikigai on the road to Death Valley

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Ikigai (生き甲斐, “a reason for being”) is a Japanese concept referring to having a direction or purpose in life, providing a sense of fulfilment, and towards which the person may take actions, giving them satisfaction and a sense of meaning.

Understanding your Ikigai is the key to waking up like a kid on Christmas morning, inspired to go to work, feel safe and motivated while you are there, and go home fulfilled at the end of the day. Over the years I have worked hard to find my Ikigai and share the concept with those around me.

It is a healthy and happy way to live. I often get asked for examples of people that are truly following their Ikigai. One guy that is always high on my list is Andrew McCrory. Andrew is a local legend and all round good sort.

When I first started coaching him five years ago he told me that his ultimate goal was to one day run the Badwater 135 Ultramarathon through Death Valley. Having crewed at this event in 2008 for another Kiwi Lisa Tamati, I had a good understanding of what was going to be required to complete this mission.

One of the key factors is a strong purpose or Ikigai. Andrew definitely has this.

So what exactly is the Badwater 135?

It’s globally recognised as the toughest footrace on Earth. Runners start at Badwater Basin in California (which is 85m below sea level) and finish at the Whitney Portal (500m above sea level.) There is a total of 4500m elevation across the 135 mile/217km course which must be completed in 48 hours. It’s all run on road in extreme temperatures up to 54 degrees.

This is no walk in the park. The Badwater 135 is and always has been an invitational race.  Applicants are considered purely upon their race application and its specific written merits.  They are then selected to run in July of that year via a live Facebook announcement. There is a strict entry criteria which involves running at least four ultra-running races of 100 continuous miles or longer with one of them being between January 1, 2023 and the day of submitting the application.

There is only one preferred qualifying race in New Zealand and that is the Northburn 100 in Cromwell. Andrew McCrory has been working towards running the Badwater 135 since he began ultra-running 5 years ago. He has completed many ultras including five runs over 100 miles and the Northburn 100 in March 2023. He has also run the length of New Zealand, completing 2,060km over Christmas and New Years 2021/22.

While Andrew is undertaking these amazing feats he also raises money for charity. His main charity is helping children with Cerebral Palsy to get Selective Dorsal Rhizotomy surgery in America and helping with the intensive rehabilitation once they return home. He has also raised money for other organisations such as I AM HOPE which supports mental health, and the NZ RSA Poppy Fund which supports all Service veterans. All up so far he has raised close to $90,000.

In July, Andrew will be realizing his goal as he stands at the start line of the 2024 Badwater 135. One of the few Kiwi’s to ever be selected to compete in this race he considers himself privileged to be there. He’s taking his fundraising efforts to a global stage and wants to continue to help many more New Zealand children to achieve their dream of being able to walk. He’s on the lookout for sponsors – so please reach out if that sounds like you. Once you have clarity on your Ikigai you can achieve some very cool things.

For inspiration you can follow Andrew and his build up to Badwater by checking out: @Running Aotearoa for SDR on Facebook or Andrew McCrory Ultra Runner on Instagram Or schedule a session with Neil to check if your Ikigai is on point. 

Neil Wagstaff is the owner of Peak Fitness in Havelock North. He has over 25 years experience in the health and fitness industry. www.peakfitnessandhealth.co.nz

Managing your business wellbeing in 2024

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As we mark one year on from Cyclone Gabrielle affecting homes and businesses throughout the Hawke’s Bay, it’s an important time to take stock of how we have collectively coped and responded to challenges in 2023 and what we can do to manage business wellbeing in 2024.

The November 2023 BDO Business Wellbeing Index is one way to understand how the nation’s business leaders are feeling in the current climate. The Index is a biannual study of more than 500 business leaders and owners from across the New Zealand business sector and measures the impact of a wide range of factors influencing local business leaders. These measures include financial, economic, regulatory, environmental, and social.

The November edition of the Index showed that business finances continue to be the leading driver of negative wellbeing among New Zealand business leaders. Cash flow problems were reported as a leading contributor to negative wellbeing in business lives, along with external economic factors, supply chain issues, and workloads.

Facing financial challenges

As the leading driver of negative wellbeing among business leaders, financial performance is something every business leader will be considering this year. While they can be difficult to confront, financial challenges can often be addressed, especially when you have the right help at hand. We surround ourselves with experts in our daily lives; we see a doctor when we’re sick or hurt and we seek advice before making a big purchase.

The same premise should apply to cash flow problems and other financial challenges. Businesses should consider seeking advice and support on their business pressure points to gain a fresh perspective from industry experts who have a wide pool of resources to call upon. With the business landscape changing significantly in the last few years, now is an ideal time to work with your adviser to reconsider and refresh your business strategy, making sure it aligns with the reality of today’s operating conditions. This includes considering how the new Government’s proposed changes to tax policy and other legislation might impact your business.

An open and ongoing conversation with your accountant will help with this, keeping your business on top of any impending tax policy changes and giving you an understanding of how you can maximise the benefits these might bring.

The road ahead

There are many positives to take from the BDO Business Wellbeing Index. When reflecting on their wellbeing over a two-week period in October, NZ business leaders posted a record high Wellbeing Index score of 74 – up from 63 in the April 2023 report. There was also an increase in the percentage of business leaders expecting to feel positive about business performance in the six months following the survey.

These figures may show a growing sense of certainty among business leaders around economic policy following the General Election and hope of better market conditions ahead. It’s an optimistic time for some, and business leaders who find ways to harness this optimism may find opportunities ahead in 2024. With over 50 years of local business experience, BDO Hawke’s Bay has walked the walk when it comes to understanding and thriving in the local business market. Contact us to find out how you can prepare your business for a positive 2024.

BDO Hawke’s Bay are Chartered Accountants and Business Advisors. The firm is an independent member of BDO New Zealand and part of the global BDO network. www.bdo.nz

About Heather:

Heather Hallam is a Director with BDO. She has extensive experience assisting both small and medium sized entities with a wide range of audit and advisory services, particularly in the Tax and Advisory sectors. BDO Hawke’s Bay are Chartered Accountants and Business Advisors. The firm is an independent member of BDO New Zealand and part of the global BDO network. www.bdo.nz

Get ready for Windows 11: Better hybrid work with more convenience

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Even good things must end and so it is for Windows 10. With end-of-life scheduled for October 2025, now is the time for planning the upgrade to Windows 11: you don’t want the date sneaking up on you, resulting in a rush job and potential disruption.

Of course, the good news is that Windows 11 is an evolutionary shift from its predecessor, which was released all the way back in 2015. There is no radical redesign, so most of your people will easily adapt to the new operating system. There’s good reason for an evolution, mainly because a lot has changed, most significantly in terms of how we work more than what we do at work. By that, I mean the rise of hybrid and mobile work. Before the pandemic, there were people who worked from home occasionally and some sales and other jobs had people working on the move. As we now know, working from anywhere isn’t just possible, it is generally quite desirable.

Now, what people want from the tools enabling hybrid work include collaboration, ease of access to information and systems/services, an assurance of privacy and security without ‘hassle’, and above all, convenience.

Simply put, we want to work without admin, problems, or issues. And that’s what makes Windows 11 a welcome update over 10. Combined with the latest laptops, tablets, and hybrid devices, it encapsulates what modern technology can do, making our work lives easier and more closely aligned with the technology experiences we enjoy on our personal devices.

What you can expect from Windows 11

For ‘starters’, Windows 11 boots faster, which we’ve measured at around a 15% gain on a Surface Pro. With integration ‘from the CPU to the cloud’, Windows 11 is designed for secure mobility, particularly when used with Microsoft 365 applications (including Teams, SharePoint and the Office productivity suite).

The biggest difference is in the User Interface. Rather than throwing the baby out with the bathwater, Microsoft has evolved Windows 10’s very well received (and dare I say loved) interface, with 11 streamlining with ‘snap layouts’ and personalisable widgets for all your apps.

There’s improved search, both ‘in-device’ and across your cloud locations like SharePoint or the internet, and security is made simple with Windows’ celebrated ‘Hello’ combining with
PIN and password for multifactor authentication (though if you’re like me, your face is all you need – who remembers passwords these days? With Windows 11, there’s no need). Snap layouts are particularly smart: Windows provides suggestions for organising your applications across one or multiple screens, so you don’t have to shunt them around. It works well, saves time, and makes things easier.

With Teams and vid communication now the preferred way of engaging for just about everyone, the application is now directly integrated into Windows 11 – making vid calling a practical default from your laptop, PC or tablet. Overall, Windows 11 means a better experience aligned with how we work in 2024 and beyond. It simplifies common tasks (like finding information), and with Microsoft’s Copilot AI assistant built in, Windows 11 can do many tasks ‘on command’ (our advice here is ‘watch this space:

Copilot is relatively new and while already amazing, greater things can be expected soon). But as always, it’s best to be prepared for and take care in your Windows 11 migration. Start soon, look to the advantages and the benefits, roll it out well ahead of time (and make sure your hardware is up to the task).

Increase your business value now

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You may have sat on the beach this summer and imagined a time when the working week is all beach and no work. To make that happen and to sell your business for the highest possible gain, start now. It takes a change of mindset, a dual focus on day-to-day priorities, while thinking and planning for the long-term.

Consider the following:

Create a living business plan

Ask yourself, ‘If everything went perfectly over the next three to five years what would that look like?’ Write it down. What will the business look like? What will you be doing? What will you have achieved? Try and keep it to one page. Look at it often. This will help formulate your goals and action plans for the development of your business.

Get the financial support you need

Be clear on the costs required to run and grow your business.

Consider whether you need to borrow money. Look at all your options –Managing your business wellbeing in 2024 financing equipment over time instead of purchasing outright will smooth out cash flow. Keep tabs on your financial position each month.

Manage cash flow like your life depends on it

‘Cash is King’. It’s so important to make sure that your customers are paying you on a similar timeline to when you pay your suppliers. Chase slow payers. Structure payment terms to your advantage. Check the business bank balance regularly.

Become a marketing ace or work with one

If cash is ‘King’, digital marketing is today’s ‘Queen’, particularly for business to consumer models. Customers search on-line first and having a website isn’t enough. Many SME’s contract digital specialists to update social media content and boost their search engine rankings. Facebook content and advertising can be turned on and off to regulate the volume of enquires to align with workload requirements of your business. A couple of clients have achieved outstanding results with targeted messages via Facebook Messenger, delivering competitions and offers designed to generate immediate sales.

Stay on top of customer needs and your competition

Asking for feedback is one of the most powerful ways to stay on top of your customers’ needs. Don’t be afraid to seek feedback; it’s gold. You can transform feedback into deeper loyalty when you show that you are willing to take feedback on board.

Do your research

Spend time working on your business by understanding the market need for your product or service. Identify similar products or any trends in your industry. Who are your competitors and what do they do well? Try to establish healthy relationships with competitors. You may find you have complementary products. Maybe there are gaps in the market? Who are you targeting and how will you grab their attention? What will motivate them to work with you?

Learn to love change

See change as an opportunity, not a negative. Ensure your business is responding to change. If required bring in specialist contractors to help. Being adaptable impacts business longevity. Don’t be afraid to discontinue something that is not working.

Manage growth – don’t let it manage you

Growing pains are real. It’s a balancing act managing growth as opposed to being pulled along by reactive runaway growth. Being prepared for future growth is an important success factor. Consider what the growing needs could be in your business, such as the number of people you need, types of technology, working space, greater customer expectations, new industry regulations. Rodger Howie is a specialist Business Broker and Commercial Agent with Bayleys Hawke’s Bay. Since joining Bayleys in 2016 Rodger has helped many business owners sell their businesses for the right price. Whether you are buying or selling and would like to talk, contact Rodger on 027 431 1973, confidentiality is assured.

Is 2024 the year of the work life balance?

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With an ever-changing market, it’s time for employers to embrace changes in the status quo and actively recruit employees for part- time, fixed term, and casual roles. The options There are opportunities for an employer to promote flexibility for employees who are looking to return to the workforce or move away from the 9 to 5. An employer can consider recruiting for part-time, fixed term, and casual roles.

These positions allow employers to access a larger demographic of potential employees, who for various reasons may not be able to commit to full-time traditional hours of work.

Your responsibilities

There are standards to uphold when you offer an employment contract to a new employee.

Some of the terms vary dependent on the position, specifically the entitlement to annual leave, sick leave and bereavement leave. At minimum, you must provide a written employment agreement including:

  • The names of the employer and employee.
  • A description of the work to be performed, an indication of the place of work, and an indication of the hours of work.
  • The wage or salary rate, and how it will be paid. Employees over 16 must be paid minimum wage.
  • An explanation of how to resolve employment relationship problems.
  • An explanation of public holidays, annual leave, sick leave, and bereavement leave.
  • An explanation of family violence protections, and parental leave.
  • A statement regarding rest and meal breaks (dependant on hours worked).
  • Any other matters that are agreed on (including a potential trial period).

Part-time

A part-time role is generally less than 30 hours per week. This is ideal for employers who have roles available that do not necessarily require 40 hours a week.

In the age of a thriving social media presence, hospitality and retail businesses are actively promoting sales and events on apps such as Instagram or TikTok. To do this effectively, many businesses hire a ‘social media manager’ in a part time role. Another example are hospitality businesses who only need extra staff for busy nights of the week. Part-time roles are an economical way to manage gaps in staffing and reduce the risk of turnover in employees.

There are struggles in hiring part-time workers, but these can be managed by effective leadership and communication. It may be difficult to build a team culture and strong relationships, and other workers may struggle to understand the reasoning and benefits of variable roles. Regular work social events, ensuring everyone knows each other’s roles and responsibilities, and that they are a valued part of the team may be a way to counteract this.

Fixed-term

Fixed-term employment is encouraged in situations where there is a specified end date. Examples include cover of parental leave, a new project, or seasonal work. This must be a genuine fixed-term position, not a pretence for a probationary period. These terms must be written in the employment agreement. Benefits of this position allow you to employ workers for a fixed amount
of time and bring them onboard for a specific job. For example, the horticulture sector in Hawke’s Bay is substantial, so fixed term employment for seasonal work is ideal.

Economically this is beneficial, however it can be a challenge to build a tight-knit team culture when your employees have a fixed end date with the company, so it is important to keep this in mind.

Casual

Casual workers have no expectation of work, no regular pattern, and no guaranteed hours. This is ideal for employers who are looking to manage unexpected or unplanned surges in work (an example being a Christmas holiday period). As soon as a casual worker enters a regular pattern of work with regular hours, their position will become permanent, and your obligations regarding annual leave, sick leave, and bereavement leave will change. Casual workers will typically not have the same loyalty to your business, and this may be a stepping stone for some employees whilst they look for their next role. This is not a cost-effective option if you spend significant time and effort onboarding them.

The answer

To ensure your business is running at its most efficient, an employer must recognise the benefits of flexible employment arrangements and how they can best be incorporated. Ensure you are mindful of your responsibilities and be proactive when onboarding new employees.

About Christine Symes

Christine is the Managing Director of Bramwell Bate. Born and raised on a farm in Southland, Christine graduated from the University of Otago in 2000 with a Bachelor of Laws and a Bachelor of Commerce. After working in law firms in Napier and Dannevirke, Christine joined Bramwell Bate in 2020. Her areas of expertise include conveyancing and property law, company and commercial law, Trusts, estates and succession planning. Outside of work, Christine enjoys the Hawke’s Bay lifestyle with her husband and three sons.

Let’s talk leadership – a journey that doesn’t have a final destination

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Author: Andrea Stevenson

The working environment has become ever more complex in recent years and now, more than ever, leaders in organisations need to be stepping up to the plate. In a world that has thrown a lot at us over the last few years, now is the time, more than ever, for leaders to step up to the plate and shine.

People are needing leadership. I’m not talking about top-down control. I’m talking about the kind of leadership that brings out the best in the team, espouses high performance, is visionary, motivating, inspiring and empowering. Yes most leaders are not delivering on these aspects of leaders. Even more concerning is that a reported 60%* of all first-time managers do not receive any sort of leadership development training, according to the Centre for Creative Leadership.

It’s no wonder many leaders are flailing.

So what defines a good leader?

A good leader is defined by the ability to build a high-performing team. Leadership should be evaluated by the team’s performance. A good leader plays the critical role of influencing the team and their actions towards a common goal. Leadership is visionary, but it is also relationship-driven – a balance of establishing direction and vision with investing in the formation and building up of those relationships.

A common error is the assumption that because someone is technically good in their role, they’ll make a good leader. Leaders need to recognise that what got them ‘here’, won’t get them ‘there’. The traits that have worked for them to date and helped them succeed can, in many cases, be the very traits that get in the way of leading effectively (e.g. being detail attentive is now micromanaging).

The first step Leadership is a journey. We are never there (if you think you are, then you are most definitely not). There is always something to learn and improve on. The foundation of good leadership is self-awareness. This requires leaders to be acutely aware of their strengths and their flip side (and every strength has a flip side), of their motivations, values, blind spots, unconscious biases and behaviours under pressure.

When it comes to leadership, how we think we might be performing is somewhat irrelevant – what matters is how others experience us. Diagnostic tools can progress an insight process, be it through profiling or 360 Surveys that reference specific leadership competencies as can 1:1 coaching. These can be affronting but they provide valuable insight into one’s developmental needs. Without this awareness, any type of change behaviour will not be achieved. The nature-nurture debate is relevant to leadership. Some personality traits have a natural predisposition towards leadership, but it is also true that any good leader can learn and apply the skills. Think like an athlete – top athletes know what skills they need, are meticulous in reviewing their performance and they practice what is required. It is an intentional approach to:

1. Learn the skills

2. Develop the qualities

3. Practice the actions

Leading the team

Traditionally, leading strategy and leading culture have been seen as two different things. However, the two are inextricably linked and getting alignment is critical. Leadership coach Gordon J Curphy’s Rocket Model framework for building high performing teams is a useful starting point. Being in the Rocket requires an understanding of the context you are operating in first – considering key stakeholders, the stage of the team (e.g. new, broken, virtual etc.), and economic realities etc. From there, a leader can develop a map for determining mission/vision, talent, operating rhythms, motivation and resourcing through to results. At the core, trust is a primary factor. If this is not the foundation then high performance is unlikely to follow.

From there, clarify the difference between leading from the front versus leading from behind and know how these differ. Understanding that and getting the balance right is important, and not over-doing either.

It’s the balance of establishing vision and setting expectations, through to seeking input, asking questions, listening and having team members take the lead. Jim Collins, in his book Good to Great, identified leadership as a critical success factor. He found that leaders in high-performing organisations had two things in common – humility and persistent drive. These two traits are a nice descriptor of leading from the front and behind. Curphy also refers to a third factor – being comfortable in the sheriff role – being ultimately responsible for holding team members accountable. And yes, this includes managing under-performers and being skilled in healthy conflict.

Situational Leadership (see the work of Blanchard and Hersey) is about adapting your leadership style/response to each unique situation or task to meet the needs of the team or team members.

It requires leaders to change “hats” at times, shifting between being directional through to supporting, delegating and coaching. “Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.” Jack Welch, Jack Welch Management Institute

AI, while a great tool, is not the solution to developing “soft skills” in leaders. Nor will a one-off training day turn one’s leadership on its head. Development of leadership skills is a journey. It takes time, practice and commitment. It takes building of trust. It takes putting yourself out there. It takes being intentional on everything. Above all it takes practice. And you are never really there. My challenge to leaders for the year – be intentional. May this be your year!

For assistance with human resources initiatives including teams, leadership, investigations or facilitated meetings, please contact hr-consulting-hawkesbay@bakertillysr.nz

2024 will be at tricky year to navigate

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Let’s hope that this year does not mirror the tumultuous start of 2023, marked by cyclones and market uncertainty as market conditions have a direct bearing on the property’s market value. Economic predictions and their outcomes, and impacts, specifically on the property market, remain an exercise in crystal ball gazing.

However, Williams’ Harvey accumulates a library of research from numerous commentaries and views of economic/research analysts to corral the trends and build a ‘big picture’ oversight and it seems timely at the beginning of the year to have a look at the local Hawke’s Bay picture.

There is consistent evidence to suggest the local property market (like much of New Zealand) is in transition as the volume of residential property sales has decreased, house value increases have shown a deceleration, the median days to sell have increased and levels of inventory have increased. The February 2024 REINZ report for Hawke’s Bay shows the January 2024 figures show that the MSP for Hawke’s Bay increased by 3% to $677,000 compared to January 2023, but back slightly to the December 2023 MSP. For New Zealand (excluding Auckland) the MSP has dropped marginally year on year (-0.7%) to $760,000 month-on-month compared to the same time in 2023.

There are some predominant factors contributing to the current environment. Firstly, the cost of living has irrefutably increased with rising inflation. Secondly, the aggressive measures taken by RBNZ to curb this inflation with the steep OCR hikes which increase mortgage security lending interest rates.

Thirdly, a lack of access to finance due to the amendments to the Credit Contracts and Consumer Finance Act (CCCFA) which came into effect in December 2021. These amendments have seen lenders apply draconian assessment parameters to buyers applying for mortgage security funding. The total number of properties sold across New Zealand in January 2024 increased 4.9% year-on-year to 2,995 and decreased 44.1% month-on-month from 5,357.

The current median Days to Sell of 45 days is more than the 10-year average for January which is 42 days. There were 16 weeks of inventory in January 2024 which is 8 weeks less than the same time last year. The pressure for value growth continued through to 2021, levelling out in 2022 and reducing in 2023. The Hawkes Bay volume of sales recorded for 2022 was the lowest annual volume Hawkes Bay has recorded in over 30 years. This low volume of sales continued for 2023 which recorded a slight increase in the volume with 2,029 sales, however, is well back on the higher volumes recorded 2015 to 2021 where volumes of sales ranged between 2,517 and 3,110 per annum.

However, to put it into perspective there has still been significant value growth in a relatively short time frame. Analysis of the last five years of activity shows that the MSP table (the median of the monthly MSP recorded by REINZ) shows an increase of 38.16% on pre-pandemic values.

Annual medians (as expressed in the table) can be misleading, therefore, we have also analysed the REINZ statistics into Quarterly blocks and compared to the MSP of each previous quarter. The heat of the market peaked in Q4 2021, however, each successive quarter in 2022 produced a negative result with a declining MSP which continued into Q1 of 2023, after which the market stabilised and firmed in Q4 2023.

The quarterly volume of sales increased each quarter from Q1 2023 at 401 sales through to Q4 2023 at 574 sales. This indicates market conditions became more positive as the year progressed. New Zealand is now well the other side of the pandemic.

Inflation at home and overseas is still the predominant economic nemesis. Some pundits predict the tide may finally be turning, albeit slowly, whilst others forecast more hikes due to strong employment data. So, there is still some way to go before the ‘war on inflation’ is won as this is still well outside the RBNZ’s target band. There are a couple of new variables that look set to play a key role in dominating the economic outlook for 2024, being the impacts of migration, and fiscal policy. Once again 2024 is shaping up to be another tricky year to negotiate.

What the ‘everything rally’ did to markets in 2023

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The investment market in 2023 was strong – unlike the year prior – largely thanks to an impactful December quarter. It’s a great example of the need for patience and a reminder of the importance of a long-term view when investing.

The positive returns were driven by what we’re calling the “everything rally” – a perfect storm of equities rallying and debt securities (bonds) more than reversing the losses recorded in the previous quarter.

The rally began in November when inflation fell faster than expected and spurred hopes of central banks cutting interest rates in most major economies. This saw recession fears replaced with growing confidence that central banks will achieve their inflation targets without tipping economies into recession.

In December, that confidence was boosted by the US Federal Reserve changing its outlook to include three forecast interest rate cuts in 2024. This fanned investors’ expectations of deeper and faster cuts, which led to higher equity prices.

Equities responded strongly to the news

Equity markets finished the year on a high note, with global equities producing a quarterly gain of +5.4% in New Zealand dollar terms, driven largely by the US equity market finishing just shy of an all-time high. While the “Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) produced most of the US equity market gains in 2023, the rally broadened to the rest of the market in the December quarter. You can see this when you look at the tech-dominated NASDAQ Index – up +14.3% and the broader S&P 500 Index’s gain of +11.2% – both in the December quarter.

Elsewhere, equity market returns were more modest at around +2 to +6% returns over the quarter. And closer to home, the Australian equity market produced a strong +8.9% gain in New Zealand dollars, while the New Zealand equity market was more subdued at +2.7%.

Debt securities join the rally.

Before the December quarter, it looked like 2023 would be another ho hum year for investors in New Zealand bonds. But the December quarter delivered strong returns.

Better New Zealand bond returns were attributed to growing optimism that inflation was cooling, and interest rates would soon be lowered. As a result, there was increased demand for bonds, which drove prices up and saw interest rates fall. As a result of the 5.0% quarterly gain, NZ bonds avoided a third straight year of losses, producing a +7.5% annual return.

This in many ways restored value in bonds that was challenged in 2022.

Looking forward in 2024

Globally, economic activity is likely to slow but we see recession being avoided in 2024. While key economic uncertainties remain, severe economic outcomes look less likely than in 2023. After a year to forget in 2022, last year was a lot better for New Zealand bond returns.

We expect New Zealand’s longer-term interest rates to decline, echoing our expectations of global rates. This increases the attractiveness of New Zealand bonds as falling interest rates increase their capital value. On balance, the evidence suggests relatively balanced risks around global equities, which supports a neutral exposure to this asset class.

Investment implications

The 11th-hour rally of the markets to the end of 2023 will have restored the faith of many investors in the markets. That said, for 2024 investors should continue with a disciplined approach to diversified asset allocation in quality assets to ensure they make the most out of having a balanced portfolio.

Note: This article was written on 15 Jan 2024.

Tobias Taylor is Director, Wealth Management Adviser at Jarden. This research has been prepared by Jarden Securities Limited (Jarden) which holds a licence issued by the Financial Markets Authority to provide a financial advice service. The information in this research solely relates to the companies and investment opportunities specified within. The nature and scope of any financial advice included within that research are limited to generic and non-personalised commentary about that investment only, such as the performance and the investment outlook of the company concerned. Any such commentary does
not take into account any individual’s particular financial situation, objectives, goals or appetite for risk. We recommend that you seek financial advice that is specific to your personal circumstances before making any investment decision or taking any action. No fees, expenses, or other amounts will be payable for the provision of any financial advice in this research report. However, if you act on any information or advice contained in this research report, a brokerage fee (and other fees such as an administration and custody fee) may be payable to Jarden. For fees payable for brokerage and other services provided by Jarden, information on our complaints and dispute resolution process, and the duties applicable to us for providing financial advice, please see our publicly available disclosure statement at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement

The Parkerian Hexad: Elevating Information Security Beyond the CIA Triad

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While you may or may not be aware of the CIA Triad, it is a well-known set of fundamental principles of information security – Confidentiality, Integrity, and Availability. It clearly defines the relationship between information and security.

Confidentiality: Often considered the most fundamental principle of the CIA Triad, this involves protecting information from unauthorised access. It ensures that sensitive data is only accessible to those with the proper permissions. Integrity: Also part of the CIA Triad, integrity ensures that data remains accurate and unaltered. It involves protecting information from unauthorised modification or tampering, ensuring that it retains its original state and reliability.

Availability: Another core principle of the CIA Triad is that availability ensures that information and resources are accessible and usable when needed. It involves safeguarding against disruptions or outages that could impact the availability of critical systems and data. The Parkerian Hexad is a security framework that extends and complements the Triad, to include three additional elements:

Possession, Authenticity, and Utility. It points to the potential vulnerabilities between the CIA attributes. “These attributes of information are atomic in that they are not broken down into further constituents; they are non-overlapping in that they refer to unique aspects of information. Any information security breach can be described as affecting one or more of these fundamental attributes of information.”

Possession: Possession emphasises the control and ownership of information. Possession ensures that authorised entities have the rightful ownership and control over the data or resources, preventing unauthorised entities from claiming possession. Information can be confidential and have integrity, but in the hands of the wrong person, it can threaten both attributes. “Suppose a thief were to steal a sealed envelope containing a bank debit card and its personal identification number. Even if the thief did not open that envelope, it’s reasonable for the victim to be concerned that the thief could do so at any time.”

Authenticity: This principle addresses the trustworthiness of information and the assurance that it is genuine and not falsified. Authenticity ensures that users can rely on the accuracy and origin of the information. “For example, one method for verifying the authorship of a handwritten document is to compare the handwriting characteristics of the document to a sampling of others that have already been verified. For electronic information, a digital signature could be used to verify the authorship of a digital document using public-key cryptography (could also be used to verify the integrity of the document).”

Utility: This is another extension introduced by the Parkerian Hexad, emphasising the usefulness of information. Utility involves ensuring that information serves its intended purpose and provides value to authorised users while also preventing misuse. “For example, suppose someone encrypted data on disk to prevent unauthorized access or undetected modifications–and then lost the decryption key: that would be a breach of utility. The data would be confidential, controlled, integral, authentic, and available–they just wouldn’t be useful in that form.” As we go into the new year, the Parkerian Hexad builds upon the CIA Triad by incorporating Possession, Authenticity,
and Utility, providing a clearer understanding of how to address various aspects of information security, ownership, trustworthiness, and usability. All quotes sourced from (https://en.wikipedia.org/wiki/Parkerian_Hexad)

Tom is the owner of Govern Cybersecurity.
He has over 18 years in the cybersecurity and IT industry at management level, and for the past 6 years has been a lecturer in cybersecurity at the Eastern Institute of Technology. He has earned certifications in ISO 27001 Lead Auditing, Lead Implementation, SOC2, and Ethical Hacking. These certifications are considered the international gold standard for business security.

12 months on from Gabrielle – the impact on claims and insurance premiums

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It is hard to believe that a year has already passed since Cyclone Gabrielle devastated our region. What has happened a year on regarding insurance claims, and how will it affect your premiums moving forward? As at 13 December 2023, insurers had settled 99,798 of 115,353 claims (about 87%) from the Cyclone Gabrielle and Auckland Anniversary events, according to the latest Insurance Council of New Zealand report.

75% of business claims have been paid at a cost of $814,857,610.  This was said to be tracking as expected with business interruption claims being spread over time. The total amount to be paid out is expected to be $1.4 billion. All of these claims account for about 75% of the total value of damage, which is estimated to be $3.6b. This total however does not include the uninsured losses to the economy.

Impact on insurance premiums

It is no surprise with the cost of these payments that it will have a massive impact on insurance premiums, not just for Hawke’s Bay but for the entire country. Reinsurance premiums, paid by our local insurers to protect themselves from catastrophic events, have been increasing for several years. The cost of reinsurance, to cover catastrophic events, is one of the largest expenses for an insurance company. More unpredictable weather events mean a rise in reinsurance costs, which then of course get passed on by insurers to the consumer. Premiums for most policy types are therefore expected to increase over the next year.

In addition to reinsurance costs, another reason for the premium increases is the inflationary environment. This is caused by the increasing cost of materials to repair or replace property and cars. Legal fees and settlements paid for liability claims and any other fees that need to be paid to assess an insurance claim are also increasing.

Availability of insurance

It is not just the cost of premiums that will be a challenge for many this year. It is also around the availability or capacity of the insurance available. Insurers may reduce the amount of cover they are willing to provide in certain areas due to the increased risk. As insurers update flood models with the change in weather patterns for example, we are already starting to see them decline cover in some areas.

 

Brokers shown to have greater insurance outcomes

A recent survey by Vero showed that clients who used an insurance broker were more likely to have improved outcomes along with having greater confidence in their level of cover. Rising premiums and reduced insurance capacity are not new to any seasoned insurance broker, so if you haven’t engaged a broker to manage your personal or business insurances perhaps now is the time to think about it. A good broker will focus on positive alternatives and potential solutions to address the challenges the current market is providing, including how we can further mitigate any of your current risks. Our team is also of course willing to talk to anyone who is not happy with the outcomes provided by their current broker and to help ensure that you feel secure in your risk and insurance programme.

You can do this Hawke’s Bay

We have come a long way in the last 12 months to recover and rebuild. Whilst there is still much to do, we have come through a large array of natural disasters before over the last 150 years. The people of our region are resilient, and we will bloom back into full life again in time.

We can do this! icib.co.nz