“People without a fixed address can still open a bank account, although the process can be a bit more challenging,” a Reserve Bank spokeswoman says.

“Banks are required to comply with Know Your Customer (KYC) obligations, which means verifying a person’s identity and their address. Where someone doesn’t have a permanent home, there should be alternative options for banks to verify a temporary address. For example, a bank may accept a temporary address or a letter from a trusted organisation, such as a housing provider or a community support agency, to meet address verification requirements.”

As a first step, contact your local Citizens Advice Bureau (CAB) – see cab.org.nz, or a financial mentoring service, which you can access through moneytalks.co.nz. Both offer free services.

“These organisations can help people to get access to a bank account, such as helping people to get ID or a proof of address letter,” the Reserve Bank (RBNZ) spokeswoman says.

Another suggestion is to contact Westpac, which has started a “basic bank account,” designed for people in your sort of situation.

Meanwhile, the broader issue is being addressed. “At the Reserve Bank, we are working with banks and regulators to make access to accounts easier. The Council of Financial Regulators will publish decisions later this year on options to enable everyone to access simple transaction accounts,” the spokeswoman says.

“Finally, [the] RBNZ supports efforts to remove barriers to accessing basic banking services through reforms to AML/CFT requirements being led by the Ministry of Justice.”

You wrote to me some time back. I do hope you have found a job and a home in the meantime.

Scam warning

Q: On Instagram, I was sent an advertisement that had your name, inviting me to join for 100-day free advice on share investments.

My son and I decided to join, relying on your safe hands reputation. We have become increasingly concerned it is a scam. I have not given them my bank account details but they are asking for them, on the basis they want to provide me compensation for a share trade loss.

I wanted to let you know in case this isn’t you, as numerous others may have joined on the basis of your name. If it is you, then please also let me know?

A: It’s a scam! I replied to you right away but, with your permission, I’m running your email here in case others are caught up in this.

This scam first emerged on Facebook and Instagram in mid-August. I ran a warning in my August 23 column and on my website, and the Weekend Herald ran an article about it. But clearly you and others didn’t get the message. It’s worrying.

My first question to you was whether you had sent them any money. Your reply: “Not directly, I have my own Hatch account. I invested in three shares that they recommended. One of them lost money on Friday and they wanted my bank account to give me ‘compensation’ on the share loss. That’s when I became suspicious.”

Phew! I hope nobody else has sent them money or bank account details. Anyone who has should contact their bank immediately and also contact Netsafe or ownyouronline.govt.nz.

It’s interesting that the crooks are offering to give you money, rather than taking it from you. They might even live up to their offer, a clever way to increase your trust in them – and to obtain your bank details.

If you continued, somewhere along the line you would be sure to give them way more money than they ever gave you. And that’s the last you’d see of it.

In case anything like this emerges again: I will never be involved in any scheme of this kind. I earn a living as a freelance journalist, giving talks, writing books and sitting on a few non-profit boards. That’s all.

By the way, I note that you are a professional person and clearly an accomplished one. Anybody can get caught up in a scam!

Getting aggressive

Q: We have a mortgage-free home and my salary is $135,000. I’m not sure what to do with savings coming every month.

I am changing my KiwiSaver from 3% to 10% since I have noticed the aggressive fund is increasing the balance very aggressively, which I haven’t noticed in the past.

I just checked. I moved to that fund on May 18, so in four months, $182,000 has grown to $203,000, which is unbelievable. It does not make sense to put money in the bank. This is the only reason I am moving to 10% from 3%.

I know the risk associated, but I am sure in the next 20 years it will work out. I won’t need this extra money, even if I am going to be stuck for the next 18 years, but will have a good return, I am guessing.

I hope I did okay by not putting the money in a term investment, which does not pay much. I think this will pay out handsomely when I withdraw at 65. I will change to conservative and balanced funds (less risky) after I’m 60 to 62.

The reasoning behind going with big bank KiwiSaver rather than any NZ-based provider is that they are already managing my share portfolio, so why take extra risk and pay extra fees?

Being an accountant, I can work out the maths behind this increase and just wanted to share with you this unusual return.

PS: I just hope the world won’t crash and these investments will be nothing after that many years.

A: Picture this: Your $203,000 balance has dropped to $100,000.

Your aggressive KiwiSaver fund will almost certainly be largely invested in shares. And while it’s rare, sharemarket indexes have halved at times over the decades. Sometimes it’s taken several years to get back to where you were. Will you stick with your investment when it plunges?

You seem to tick the boxes for ability to weather a storm:

While the state of the world is worrying these days, we’ve been there before and over the long term, share values have always fluctuated but trended upwards.

You’re quite right that returns have been extraordinary recently – and way ahead of bank-deposit interest. Both the New Zealand and world share indexes floundered early in the year, dropping to lows in April after US President Donald Trump announced aggressive tariffs.

But since then, they have rebounded. The S&P NZX50 share index has grown 14% just since April and the MSCI world index has grown an astonishing 32%. You missed about half the gains by starting in May, but still you’ve done really well.

On keeping your KiwiSaver with your bank, I don’t think that’s necessary. Their schemes tend to be lacklustre. And you won’t pay extra fees elsewhere. In fact, in several low-fee providers, you’ll probably pay considerably less.

Yes, but not for paying rates

Q: I have recently finished work, having reached 65, and I’m still coming to grips with the new reality of time-rich, income-limited. Innately fiscally conservative, I have our main family savings in term deposits.

However, with regular, immediately accessible bank accounts yielding not much, I’m being advised by some family members to put $150,000 back into my KiwiSaver account in a balanced (rather than growth) fund and use this account for things like rates, occasional holidays, possible emergencies etc.

While you never know what’s round the corner, the idea of using a balanced fund as an investment but also as an emergency fund seems like quite a good idea. Just wondering what you think?

A: It’s a good idea to move some of your savings to a KiwiSaver balanced fund. But I wouldn’t use that money for rates or emergencies or holidays – unless the holidays are several years away.

Balanced funds typically invest roughly half their money in shares and most of the rest in bonds. Shares are volatile, as discussed above. And bond returns can be volatile too, with downturns when interest rates rise because older bonds, issued at lower interest rates, lose value.

It’s no great surprise, then, that in two of the last 10 years, balanced KiwiSaver funds recorded small losses. In the year ending March 2020, in the Covid downturn, the average return after fees and tax was -0.9%. And in the year ending March 2023, it was -2.6%.

But I don’t want to scare you off! In 2024, the average return was 10.7%. And in 2021, it was a huge 17.4%. In several other years, it was more than 5%. And don’t forget, when comparing this with term deposits, that these returns are after fees and tax. Over time, you will almost certainly get higher average returns than in the bank.

The way to cope with the ups and downs is to plan to spend the balanced-fund money in roughly three to 10 years. Your short-term spending money – for rates, emergencies, food, power, transport and so on, plus hopefully some fun – is best left in term deposits and bank accounts.

Every year or so, move some money from your balanced fund to the bank, to keep about three years of spending money in cash. Be a bit flexible. If the balanced fund’s balance has fallen lately, you could delay the move for a while. And if it’s done well lately, you could move a bit more than usual.

I hope you do use a balanced fund. It could well mean that you’re able to have more than occasional holidays.

No garage tap

Q: Amen to the advice you have given recently about not investing in rental property in your retirement, but using the money to spend.

For decades in the US, we built up a sizeable retirement account under the guidance of a financial planner. Over 30 years now, we are very confident of the advice we get. We are in our early 70s. Our investments are widely diversified and increasingly conservative. We invested some money in property in New Zealand, but we never enjoyed being landlords. In more recent years, large increases in rates, insurance, maintenance and management have wiped out any return.

Moreover, there isn’t a tap on the garage wall from which to siphon off $10,000 for a trip overseas. Aware of Kiwi dependence on investing in houses, our US adviser sees a likely structural change in the market. She suggests it’s not wise in the near term to expect great returns from new investment. We all agree that we bought property to save for a future that has now arrived for us.

It’s time to use term deposits to park cash and to start spending our property gains to date. We are. While we can.

A: Good on you – or, as they say in America, good for you!

I’m not sure a US adviser would be the first person I would turn to for advice on the New Zealand property market. But many retired landlords find that the hassles and expenses – sometimes unexpected – are something they can do without. They have better things to do with the money.

Why not?

Q: Regarding last week’s late-70s couple seeking to increase their disposable income, why didn’t you suggest that they rent out their under-used holiday home for part of the year? Is there any reason why this wouldn’t be a viable option for them?

A: Renting out the holiday home would, of course, be one way to free up some cash – albeit much less than if they sold the property. But see the above Q&A.

Still, it might be worth it for people wanting to keep the place for children to inherit, or simply because they love to go there. Last week’s correspondents made no mention of either of those issues.

* Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to mary@maryholm.com. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.