How Does WISEplanning Select Businesses?


 

Back in the day, Peter Flannery looked at multiple sources without the understanding that he has today about what a successful investment looks like. Back then, it was popular media, other advisers, fund managers, specialist news letters, successful investors and even scuttlebutt talk where businesses were raised as the next hot tip sort of thing.

What WISEplanning has learned over many years is that it is not where we invest but rather how we invest.

These days, whilst we are still looking for other investments, having been investing for many years, Peter now has a full complement of businesses in which to invest and whilst again, we still look for other investments, we are also in the process of scaling back on our existing list.

The methodology that he adopted as a value investor revolved around the basic four step model that he learned from Warren Buffett and his teachings. This is not the model that he uses but this is what Peter started with back in the day:

  1. Compare price and value (these days this is close to the last step in the process, rather than the first);
  2. Look for steady earnings growth;
  3. Check the dividend payout ratio (looking for businesses that retain 50% or more of earnings); and
  4. Check how well the business uses its capital, as measured by return on capital and return on equity.

The above is where Peter started out 15 – 20 years ago when Warren Buffett was not the household name that he is today.

Our methodology now is more advanced and includes the economics of the business.

WISEplanning has also further developed the economics of investing which we now apply to, not only direct shares, which effectively are just big businesses listed on the share market but also residential property and small, closely held businesses.

Whilst this is getting off the track a bit, it means that as we help our clients to work toward total financial independence, starting from scratch for many, we have a methodology that is not only reliable and safe, but it works. Our clients achieve real financial independence over time. Part of it, of course, is because they are progressive anyway. The tools research methodology and help that we provide does make a real difference though, in terms of their long-term outcome.

Where we are now is that we have gradually advanced the offerings provided by WISEplanning, so that what were once just financial services are now more advanced programmes. For example, the programme called Wise Asset Management (WAM) has progressed from being a portfolio management service to an investment and asset management programme, taking into account our clients’ investing behaviour.

In practical terms, we have been able to assist many of WISEplanning clients in this programme, to permanently adjust their investment risk preferences, which in turn allows them to adopt a more advanced investing strategy, which in turn allows them to achieve better returns longer term. This is quite difficult to measure in the short term but that does not matter. We know that growth assets offer better returns long term than fixed interest and cash. We also know that smaller businesses grow faster longer term than larger businesses generally.

What we are getting to is that WISEplanning clients with a “toward advanced growth strategy” or “advanced growth strategy now” are reducing diversification and invest in smaller businesses, which interestingly is where Warren Buffett started off back in the day. It requires a substantially different level of skill and is not suitable for those with a more academic or defensive approach to investing and their life in general, but is certainly attractive to those with an appropriate investing strategy (and supporting behaviour).

Therefore, these days, we are looking to scale back on the number of larger businesses that we offer clients whilst maintaining an ongoing improvement of the quality of those businesses. Obviously, by removing some businesses that are of lesser quality compared to others, we automatically lift the quality of the total offering.

Unfortunately, we also have good businesses that are taken out (e.g. takeovers etc) but that helps to reduce the investing pool.

Anyway, WISEplanning’s focus is now on smaller businesses in order to cater to my clients looking for a more advanced approach to investing.

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Peter Flannery

“Helping everyday Kiwis who expect more … to live their lives the way they want”

Peter was raised on the family farm in Kamahi, near Edendale in Southland. He is an investor, business owner and a first generation financial advisor, having entered financial services in 1983 in Southland.

Peter now lives in Christchurch with his family. His hobbies include family time, spending time with friends, exercise, reading a good novel and time on the deck at the bach.

Peter founded WISEplanning in 1987. His 500 clients live across New Zealand and a few overseas. The ongoing expansion of WISEplanning now includes offices in Invercargill, Christchurch (HQ) and Auckland.

Peter is known among his clients for challenging common practice and conventional methodology.

He argues “People tend to follow the crowd, which is interesting, because most people are both time poor and money poor, so why follow them?”

He is known to many around New Zealand as one of few to warn in 2004 of the coming global financial crisis (The GFC) that suddenly erupted in 2008. His views were considered controversial at the time. Peter credits Warren Buffett and his partner Charlie Munger for his most useful learning’s about investing.

Peter believes education continues throughout life. Some highlights from his recent continuing education include:

• The formal Financial Adviser training through Massey University in Palmerston North,

• The Entrepreneurial Coaching program through The Strategic Coach in Vancouver, Canada,

• The Business Owner/Manager Program through The Icehouse in New Zealand,

• The Peak Performance Program through Glazer Kennedy, Baltimore, USA

• The High Performance Program through The Elite Professionals Program in New Zealand

• The Experts Academy through Brendon Burchard, Sydney, Australia

• The Millionaire Mentor Program through Scott Harris, The Gold Coast, Australia.

As an investor, he is regularly researching markets and analysing potential investment opportunities and likes to point out to anyone who will listen that discipline around the investment method is key to success.

Peter has developed programs and tools that help everyday kiwis who expect more out of life to succeed sooner.

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Miriam Woon

Miriam has been with the WISEplanning team for a few years, bringing with her enthusiasm and extensive customer service skills to the role.

She emigrated to New Zealand from the Netherlands and spent her teenage years in the Bay of Plenty before moving to Auckland to begin her studies in Travel and Tourism. Employment in the Tourism industry eventually led Miriam to start her “8 year OE”. Whilst managing ski chalets in the French Alps, she met her future husband. They moved to Cardiff for a few years before moving to Canterbury in 2008, and now works remotely from Nelson.

Miriam is the Operations Manager for WISEplanning’s clients. Her passion has always been to work closely with individuals to help them improve their work and life skills.

Miriam enjoys spending time with her two sons, husband, family and friends. She has a passion for running, skiing, photography, exercise, reading and really enjoys dealing with people.

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Sean Yang

Sean is the Portfolio Coordinator for Clients at WISEplanning and brings his enthusiasm, professionalism and well developed customer service skills to the role. Sean was born in Beijing, China and obtained his Bachelor Degree in Economics (majored in Statistics) in China and Graduated Diploma in Accounting and Finance at University of Canterbury.

Sean has worked in the finance sector specialising in Investment Advisory for more than 10 years. He is experienced in dealing with clients’ queries and providing support to Financial Advisors.

He is an organised person with a strong customer focus. Sean enjoys spending time with his two daughters, wife, family and friends. He has a passion for sports such as soccer, badminton and swimming and really enjoys dealing with people.

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Theo Zbijowski

Theo Zbijowski is the Financial Paraplanner at WISEplanning who brings his friendly and enthusiastic attitude to the role.

Theo graduated from the University of Canterbury with a Bachelor of Commerce majoring in Accounting and Finance in 2016.

Now that he has completed his degree, he is looking to continue to develop his skills and knowledge of the industry by becoming a Financial Adviser.

He is a conscientious person who maintains a strong work ethic as well as a professional attitude. Theo enjoys spending his time playing sports such as squash, tennis and table tennis; while also enjoying the company of his friends and family.

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Kim MacKenzie

Kim has been with WISEplanning since mid 2016 and is our Client Services Specialist. She brings enthusiasm for customer service, professionalism, good time management and efficiencies to the role.

Kim and her husband have been based in Christchurch for over 20 years and originated from Central Otago where they both grew up. They have three teenagers so Kim know’s first hand how busy managing life, money, kids and family can be.

Kim enjoy’s spending time with family and friends, should do more exercise than she does and recently brought a bach where her family and friends are now creating time spent memories that she hopes will carry her kids through to adulthood.

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