Getting to Know: Nigel Scott

Nigel Scott, head of advice and distribution at Hobson Wealth Partners, says he's had some investing expensive lessons.

Friday, October 27th 2017, 1:41PM

Who are you and what do you do?
I’m a director of Hobson Wealth Partners and the firm’s head of advice and distribution. My key responsibilities are working with our Advisers on a day to day basis and with Warren Couillault our MD on developing and implementing the Hobson Wealth strategy. As a board member, I also have responsibility for the oversight and governance of the firm. I’ve got almost 30 years’ experience in the NZ and UK financial markets in the key areas of wealth management, structured finance, credit and debt capital markets, risk and investment management. Having 10 years’ experience as a capital markets originator and the same amount on the wealth management side allows me to understand all perspectives of our industry.

If there was one thing you would like to change about the financial advice industry, what would it be?
More inherent trust in the benefits of advice and greater access to it. The way the industry is structured now there are a lot of people who need advice but can’t access it. These people naturally gravitate to getting advice from people they trust but aren’t necessarily qualified to do so.

What’s the best advice you have ever received?
Never waste a crisis! Throughout my management career there have been plenty of ups and downs but I’m a firm believer in that you learn more from your losses than your wins. The same applies in the investment markets too, the trick is to remember it. There’s a lesson to be learnt in every tough time.

What do you think the FMA has done well? What could it do better?
Cleaning up the reputation of the industry. The main principle of the FAA is to restore confidence in the industry and I think we’ve come a long way since the FAA came in. For example, looking back at the market pre-GFC, NZ was one of the few markets in the world where CDOs were readily available to retail investors which is a good example of product and investor mis-match. Any time products get overly complex and are not well understood things don’t turn out well. With the current regulations, we should see less examples of this. In terms of what the FMA could do better, we need to get more people into the industry. We have a very static number of Advisers in the industry which will eventually cause a succession issue. So, whilst we’re seeing an increasing need for advice, there aren’t enough qualified people to deliver it. That’s going to be a challenge for the industry to solve.

What is the biggest area of opportunity for your business now?
The industry is going through significant change particularly with the Australian banks reviewing and divesting their non-core businesses which includes their wealth management businesses. What we’re seeing is an increasing need for our type of proposition. In essence, that’s bespoke investment portfolios, coupled with a really personalised level of service. Not everyone wants to be in a fund with thousands of others and what we find is clients seeking
us out because of our investment knowledge and our ability to treat each client as an individual. Clients also like the Hobson story. We’re locally owned and therefore personally invested in our clients. Furthermore, we’re not conflicted through having an investment bank arm. With access to globally recognised research through Macquarie, we have the optimal business model.

What do you wish the public knew about financial advisers?
That it’s appropriate, and necessary, to pay for high quality advice and that you should focus on the long-term. When it comes to growing, managing and protecting your wealth, you shouldn’t try to do it on the cheap. Some investors focus on fees and not on the net return. At the end of the day it’s all about the overall outcome and I firmly believe you get what you pay for when it comes to professional advice. Starting the discussion on fees is missing the main principles of investing which is about meeting your goals. Focusing on the long-term helps you make better decisions and will ensure you don’t get distracted by the emotion and short-term noise of the markets.

What could be done to improve New Zealand’s financial literacy levels?
It needs to start earlier. More financial literacy in schools and making KiwiSaver compulsory now for young people. If we start the habit early, we’ve got more chance of success.

What do you expect the coming five years to be like for investors?
Volatile and not the consistent uptrend that we’ve seen since 2009. Unfortunately, we see it time and again in the investment markets where the only thing we learn from history, is that we don’t learn from history! Mistakes get repeated. Which is why getting advice is so important.

What do you think is the biggest financial risk to New Zealanders at the moment?
Complacency and the belief held by many people that “I can do this myself”. It’s easy for an investor to get fooled by rising asset prices, extrapolating past performance into the future and
thinking that investing is easy.

What’s been your own worst and best investments?
The best investment has been in myself in terms of education, taking on many different roles and investing in lots of different things to learn how they work through all parts of the cycle. With respect the worst investment, given I like the “never waste a crisis” mantra, let’s just say I’ve had some expensive lessons! But it’s all about diversification and never putting all your eggs in one basket.

Are you a KiwiSaver member?
Yes I am, as are all the family.

If so, what, what’s your strategy?
Growth

Outside of work what do you do?
Keen family man, fisherman, skier, mountain biker and paddle boarder.

What is the one thing people might be surprised to know about you?
My wife and I have travelled to 45 countries so far. The plan is to keep building on that tally and we’ve done a number of overseas trips with kids now which have been awesome. At some stage they’ll pay for their own and ours as well…

If you weren’t in this job what would you be doing?
Investing in a range of private businesses full-time.

Tags: Hobson Wealth