Stewart, Donald Lockhart Interview

Erica Tenquist: I’m introducing Don Stewart from the Stewart Group, and I interviewed the Chief Executive Officer of the Stewart Group yesterday, Nicholas Stewart. This is Don Stewart, his father, and the date today is 4th May 2017. Now it’s over to you, Don.

Hi. My full name is Donald Lockhart Stewart, and I was born in 1948 in Palmerston North. My background: I have one brother, and my father served in the war in Guadalcanal and in the Solomons in the Air Force; and my mother was doing telecommunications at the same time at Wigram.

I went to Terrace End School in Palmerston North. That was primary school, and then went to the Intermediate which was Ross Intermediate very near our home, and then I went to Freyberg High which was a co-educational school in Palmerston.

My father has had an interesting background in terms of his war efforts, but then when he came back he went into an engineering firm and stayed there for forty years, unlike the current generation who switch jobs every five. And his sister married a farmer in Hunterville, and they used to invite me to go and stay on their farm and help with the boys on the farm at shearing and lambing. And I gained a real love of farming at that time.

So after I completed school at Freyberg High I went farming as a shepherd, and my first job was out of Tinui for Ross and Bev Seymour. And then I changed after twelve months and worked for a farmer out of Palmerston, Rod Poulsen, and during that time I enrolled to go to Massey University to do a sheep farming diploma.

So just to backtrack slightly in terms of my first job at Tinui, I was working at the end of the road to Te Mai Station and that was very close to the Pottingers’ farm and the Whiteheads. I was the only shepherd on the farm; it was a block that had been broken in by a war vet, [veteran] and he’d done a brilliant job. And it was a long, narrow farm, and when it’s long and narrow and it’s three thousand acres – it took a long time to bring stock from the back of the farm to the front where you, say, needed to do the shearing.

They were very enlightening days as my first job, because it was the first time I had ever ridden a horse. And he was a very good horseman and I was a gumboot; and when the horses used to go out to the back of the farm their ears would be down all the way, and when we turned to come home their ears would prick up and they would take off. And ‘take off’ meant that we would clear culverts on a half canter, or what seemed to me like a gallop; but it wasn’t a full gallop, but we had to clear culverts on the full – these horses couldn’t wait to get home, and I never fell off but I’d hang on grimly. [Chuckle] And occasionally I’d open the gate to take the horse through, and I’d drop the reins on the other side to go and shut the gate, and the horse would take off and go for half a mile to the next gate, and I’d have to walk to catch up with it. And the horse’d be standing there trembling, thinking I was going to whack it with the reins because he let me down. But it was an interesting first year in farming for a new boy.

My experience at Massey was enlightening; wonderful lecturers, and we were in lectures with mainly farmers’ sons; and as you know I was not a farmer’s son. But they were good company and they knew a lot.

And during the time at Massey – it was about a twelve month course – we had to do two or three months out in a farm over the summer break, and I went to a place called Whangamomona, which is on the back road from Stratford to Ohura. And I worked on a wild block of about two thousand acres that had three paddocks; there was the house paddock, the cow paddock and the rest. It was covered in manuka and goats, and the goats made mustering sheep seriously difficult because the goats … whenever you got the mob of sheep near the house, or near the wool shed, the goats would start peeling off up the ridges ‘cause they didn’t want to be captured; and some of the sheep would follow them. So if you had goats going up four different ridges with sheep going up four different ones and you had one dog, you had a problem. So I became very, very fit on that block – the leanest I have ever been in my life; and it was an interesting experience.

What sort of accommodation did you have?

I was living on a dirt floor in the garage, which also housed some of the equipment, and I had a single bed on one side; no heater, and it was quite damp. But as a young buck aged seventeen it didn’t bother me at all.

So how long did you stay on that place?

I only stayed there four months; that was the arrangement with Massey.

And were you at that stage interested in banking or did you have a savings ethic?

I did have a savings ethic; that was never a problem for me, ‘cause I remember when I first went to this place and the fellow said to me, “How often do you want to be paid?” And knowing I was going to be there for four months, I said, “I have no need for money – just pay me when I leave.” So I was a saver but we were a long way from town. I very rarely went to town. I had an old motorbike, cheap to run ‘cause the motorbike cost very little to fill with petrol, ‘cause I hardly ever left the farm. So I have always been a good saver and a good planner, and I’ve always been goals-focussed on what I’ve been looking to achieve into the future.

Did you get that from your background of family?

No. My family were very good savers, and they were thrifty spenders. So they were always prudent with a dollar so I probably did get some ideas from them, but it was only when I worked for Rod Poulsen at Okatere, just out of Palmerston North that I really got an insight as to how farmers lived, and what succession planning was about, and how they ran their lives.

So that would have given you a lead into the business world?

No; no, not at all. I was there for about eighteen months almost managing his farm for him, and he wanted to hold me as a manager and he suggested that together we lease the farm next door. And I had precious little capital, none worth considering in terms of putting up money for stock, but I was flattered by his offer. But I knew what the farm next door was like; it hadn’t been fertilised for twenty years, and I knew that he was trying to capture me as a worker for a number of years. And they were a delightful family, but I did not want to be tied in, after only two and a half years of working on a farm, to one farm for the next ten or fifteen years.

So in that time when you didn’t leave the farm much at all, but if you did go did you join the local football team or socialise at all?

Well, when I was in the Wairarapa at Tinui that was again miles from town, and I didn’t join the rugby club. And I used to go and cut scrub on my one day off on the farm for extra income. And I was pretty self-sufficient in terms of friendships, and played tennis in the local tennis club with all the locals, and just loved that. When I went to Okatere I also joined the tennis club there, but Okatere was only ten miles away from my home where I’d been born and bred so I had connections within town there. But again I would stay on the farm most weekends and be working and looking after the stock. So I was the ideal employee – I had no girlfriend, no distractions and was committed to farming.

I just wonder, would you do it all again? [Chuckle]

I often reflect on why I went into shepherding when I left school, and it was because of my experience in Hunterville – I had just loved working with stock and I had an eye for stock and enjoyed it. But when I went managing a farm after I’d worked in the Manawatu – no, not when I was managing – when I first started farming we were being paid $20 a week, and that’s before tax. And you cannot save very much at $20 a week, and there really is no future in life as a shepherd. And I understood that there was not too much future in life for being a farm manager either, because after my stint at Okatere I got a job in Hawke’s Bay here, and that led me to want to live in Hawke’s Bay because in the Manawatu there was constantly wind. And out on the coast or near the coast out of Masterton on the way towards Castlepoint near [?Te Moi?] the wind was mind boggling; whereas I came and had a six month stint on a mixed cropping cattle/sheep property at Crownthorpe for the Connors in Hawke’s Bay, and thought this was an idyllic environment to work.

Absolutely marvellous climate, isn’t it, compared with anywhere else?

I just couldn’t believe the difference between Hawke’s Bay and the Manawatu and the Wairarapa, and it was the first time I had ever been to Hawke’s Bay and I thought, ‘This is where I want to reside.’

And that would be in the 1950s, ‘60s?

When I went to Massey it was 1968, and I left there about 1971 and then had five years various farming experience so it would be … no, it was about ‘72 that I came to …

Hawke’s Bay …

Yes.

Was that a coastal farm, the Connors?

No, no, Crownthorpe is in the middle of Hawke’s Bay out from Hastings, and it’s on the Taihape Road, so miles from the coast.

And if it was cropping, would you get tired of doing the tractor work? Or were you mostly doing stock work?

It was fortunate when I was there; I was doing tractor work that I had never done before on flat land, and we were doing cattle work and sheep work and the variation was refreshing and enlightening and I just loved mixed cropping because it was an area I had never worked in before.

And at this stage, you found … as well as your money you were paid … but would you have firewood, meat, by found? That’s usually meat, firewood and some grocery items, that sort of thing; and your clothes, you know, your outdoor clothes; did you get that?

No – as a shepherd, which I would’ve been called in those days – we were fully found. I lived in a whare [Māori house] … a very smart whare … on the farm – yeah, not far from the farmhouse, and all meals were prepared by the farmer’s wife. So I was fully found in that regard, all I had to pay for was petrol in my vehicle.

And this time in the 1970s, would you say that you thought of banking or not?

At this point I was still focussed on farming and I had decided that I would like to end up owning a farm. And so I was starting to strategise then, when I was on this Crownthorpe property as to how I could buy a farm, and the numbers to buy in when you had limited capital were scary. And we came up with an idea of buying into a small piece of flat land at Mangateretere, and establish[ing] an orchard; and that orchard was going to be a stepping-stone to our buying a farm.

When you’re saying ‘our’, I take it you’d met your wife and you had possibly a family?

I probably need to just go back a little bit. I was managing a farm for two years in Takapau, and during that time I met one of the local farmer’s daughters, and the farmer was a dairy farmer in Norsewood. And Mary and I clicked, and I decided that there was no future in managing a farm for … I think by then $40 a week. And we both decided that we would move to Hastings to live, ‘cause I’d had the experience in Hastings at Crownthorpe that was so positive. And Mary was a dental nurse and they used to shift dental nurses around from school to school and she got a job as a dental nurse at Mangateretere, which is just down the road from where we ended up living. And we bought our first piece of land of thirteen acres from Hori Wedd, and I negotiated a boysenberry contract with Wattie’s to put in four acres of boysenberries.

How long did that take, the negotiation of that approximately?

The negotiation for the boysenberry agreement took less than an hour because my father-in-law, Richard Galloway, joined me to meet with Len June who was in control of all contracts; and unbeknown to me they had a connection, a business connection from the past, which saw my boysenberry contract agreed to within a day.

Just a little bit more history in terms of our acquiring the property of thirteen acres at Clive – after we’d bought it and we went to the meeting with Bob [Len] June at Wattie’s, when we left the meeting with my father-in-law, I said, “Be interesting to know if I get that contract”, and my father-in-law said, “You’ll get the contract all right – he’s a brother.” And I had no idea what he was talking about, and I said, “What, a step-brother? Or … what am I missing?” And he said, “We are both in the Masonic Lodge.” And I knew very little about the Masonic Lodge, but I know that they look after one another; and that was the reason I got my contract.

And I’ve already covered the fact that I had met Mary, so …

And did you have to build a house on the property?

Oh! Yeah – when we bought this house the land was bare, and my accountant at the time was Selwyn Cushing. And Selwyn’s father used to run the Whakatu Meat Works, and this property was only quarter of a mile from the meat works, and he challenged me on buying it; he said, “That’s very low-lying land; very fertile but low-lying”. He said, “We used to call it ‘The Maimai’, because it was always under water in the winter”, and he said, “You’ll need to drain it, and if you put a house on there you’ll need to put it on very high piles.”

So Mary and I had very little capital and buying the land was about all we could afford at that point, and so we looked at how else we could get a house on the property other than building one. And you were able in those days to buy very sturdy weatherboard homes in Hastings for people who wanted to upgrade to more modern homes; so we bought a home that was three bedrooms, one bathroom for $1,000, and we had it shifted on the site and settled for less than $2,000; we had the electricity put in, the plumbing completed, the driveway put in; and we had it all liveable for about $10,000.

And that year would be?

That year was 1972, and the land cost was $1,000 an acre, so we bought thirteen acres; so for under $25,000 we had thirteen acres and a liveable house, so that was our first start. And at the same point that we bought this land and put in the boysenberries I decided that I wanted a job in town for cash flow; Mary was on a very good income as a dental nurse. And I approached a real estate firm, thinking that I would have an eye for selling real estate; but I was only twenty-four at the time, and I was turned down because he said “We never take on people your age because a lot of people fail in the real estate world”, and he said, “we have mainly part time wives working for us, and it doesn’t matter if they fail because their husbands are working.”

And he gave my name, unbeknown to me, to an insurance manager in Hawke’s Bay. This was one of the turning points in my life because he made an appointment to see me and I went into the insurance business – not with his company, but with the insurer who I insured with. And I have been in that role now for forty-three years, and loved every year of it.

So in terms of running my insurance business and the orchard, we did that for about eight years; and over that eight years we bought two other properties. One was the Children’s Zoo round in Goulter Road [Street] in Clive. It was a two-acre block, and it was quite famous.

It still is.

Well, it’s closed now.

Oh, is it?

Yep. And at night … and we had been not less than ten properties away from it for a number of years … and at night we could hear what we thought was a lion roaring, and we were joking; and three years later we ended up buying the property and went round to check it out, and we heard that the owner knew the Ridgways’ lion tamer very well, and when he was in Hawke’s Bay with the circus he would take the cages out in a truck with the lions, and sure enough we’d been hearing lions roaring all night, but not realising it.

‘Cause that circus was something really special.

Yes, it was.

Did you meet them when you had that property?

No, we never met them, no – we were busy orcharding and had never given them a thought. So we bought that property, and the Children’s Zoo was in a sorry way, so we closed the zoo and we cleared it all and then we put in kiwifruit. And we moved into that house for a period of time – we had the other house as well; but then my father-in-law died suddenly at age fifty-one, and I had to help my mother-in-law, Beverley Galloway, sort out the sale of a business in Napier as he had sold his dairy farm about the time we went into orcharding and bought a woman’s [women’s] shoe shop in Emerson Street. So we decided to sell our Prickle Patch property which was the thirteen acres, and sell the zoo, and I decided that because our insurance business was going so well and I was enjoying it so well, I would stop orcharding. We’d also bought another twenty-five acres in Brookvale Road just out of Havelock North, and we sold that as well; and then we bought Jim Newbigin’s home at the top of Durham Drive, and that’s where we have lived for thirty-six years. And I’ve been happy just on a lifestyle block and working in our insurance business which has grown over that time.

So at the beginning it was an insurance business?

Yes.

And did it have a different name?

The business that I started was just DL Stewart & Associates Limited; I had no associates, but then after a year or two we did have associates working in the company. And then about in the mid-eighties we changed the name to Stewart Financial Group and not long after that our son joined us and by then we had …

That’s your son, Nick?

That’s our son, Nick.

And did you have any other boys or girls?

We need to go back a little bit because I’ve jumped ahead of my married life.

So when we were at Prickle Patch – we had been there for about five or six years to get that block established – and Nick came along, and he is now forty. Two years later Annabel came along, and two years after that Sophie came along. And Mary had given up dental nursing before Nick came along so she had three under five, and I worked seven days a week – five days in town and the other two days on the orchard. And they were some of our happiest days ever. We had very low debt and we loved the Clive environment, we knew all the neighbours and it was a wonderful area to bring up three children. And our change came when we decided to sell all the homes and properties, and then move to Durham Drive.

So you’d got the contract for boysenberries; how long before they fruited?

It would be three years before you would warrant getting staff in to pick the berries for it to be profitable.

So there must have been a limit of time with Wattie’s to say how soon you had to produce a workable crop as it were.

No, the arrangement with Wattie’s was that they knew we were putting in new boysenberries, and they knew that they’d take four years before they saw any berries, so there was nothing within that contract …

No pressure?

No pressure at all; they knew and understood the time frame for boysenberries. But it was interesting at that time – after about five years of boysenberries there was huge demand for other new growers coming into the area to want to plant more boysenberries for Wattie’s. And one of the benefits we had of growing boysenberries, was that in the winter the new canes would spread across the ground and they would sucker into the ground; at the end of the cane they’d duck into the ground, and if left alone that would create another plant on the block. And we realised that these plants were worth good money so we used to harvest these plants when we were tying up next year’s canes, and we would have two or three thousand plants, and we’d cut them off the end of the new cane and put them in bins full of sawdust and sell them in the spring to the growers who wanted …

That gave you an income …

Yeah.

… in your off-season.

Yes – well we used to make as much money out of selling new plants to new growers as we did by growing our boysenberry crop.

Which you wouldn’t’ve done if you were growing kiwifruit, by the way.

No. [Chuckle] Yeah, that’s right. But we also … on our orchard we had a gate sales shop. And I chose boysenberries because all of the crop is harvested from 20th December to the end of January, so I planted on the other five acres a number of other crops that would come in at the same time, and we had a gate sales shop that we established and we tried to sell as much as we could, other than the Wattie’s boysenberries, through the gate. And these were times before supermarkets were selling fruit and veg, and our gate sales shop was hugely successful. On a good day we might have twenty-five cars in the turn round shopping with us, and because we provided a range of crops they weren’t stopping just for boysenberries; they were stopping for potatoes … new potatoes … cucumber, watermelons, tomatoes, apricots, peaches, nectarines and early apples. So it was a very successful enterprise, and when we sold it – this was eight years after 1972, so 1980 – when we sold it we sold that property for quarter of a million dollars, and that was enough to buy with no debt the property that we bought in Havelock North, in Durham Drive. So land values were appreciating very quickly and we were [it was] just fortuitous that we’d bought three different blocks of land and sold them all on a rising market.

At that stage you were [cough] working five days a week for insurance and two days on one of the farms?

Yes, just one of them.

I haven’t been able to establish how you really went from being an insurance broker into …

What happened was, when we sold the Prickle Patch and the zoo and Thompson Road, I then was able to focus all of my business life in my insurance advisory practice, and so because I was more focussed I took on more PAs, [Personal Assistants] and we bought our own building, and I incorporated my agency under a company.

So this was [the] 1980s?

Yes … bought the building; it was in Karamu Road, and we altered the building twice to cater for the growing needs of the company, and then realised we needed another building because Nick elected to leave his job with a merchant bank in Wellington and come and join us, and we needed more room. And at that point we had I think, six or seven staff, and now we have seventeen, and we have almost outgrown our new property which happened to be two doors down the road, which is three hundred and fifty square metres. But when we bought that building it was five hundred and fifty square metres, and it has two components to it. And we have leased out the other two hundred and fifty square metres, and will be able to move into that in the future when our business grows further.

So you’re continually looking to the future?

Yes – I’m looking to the future but I’m looking ahead to a different future to what Nick’s looking forward to, [chuckle] ‘cause I’m now sixty-eight, and we have an established spread business between insurance and funds management. And the funds management arm started in the mid-eighties, and I am in a transitional phase now towards retirement, and Nick is in a growth phase because he’s aged forty. And the average age of our staff now is nearer his age than mine for very good reason, and the firm is growing quite quickly every year into very positive areas.

He’s still doing a lot of travelling to meet up with people, ‘cause that is the way things work better … personal touch; would you agree with that too?

Yes; what we’ve done over the years is – because Nick has an interest in history and maths and travel, he’s been our ambassador to gain knowledge on financial planning overseas. Initially it was me in Australia, but since then Nick has travelled to Australia and the UK, and the US, and Canada, and he’s been fortunate in being introduced by certain people to top advisory firms overseas who have warmed to him, and have been able to share with him practice models that are working for them overseas that are leading edge, and …

Beneficial to your whole company?

Just amazingly so. We’ve got most of our insight from these firms.

And do you feel that they’re secure? Because you’re still mainly within New Zealand …

[Chuckle] What we have learned since we became serious about wealth management is that New Zealand is such a tiny part of the world in terms of market capitalisation, to the extent that it’s .002 of 1% of market capitalisation. And in the past people used to invest all of their money in New Zealand, mainly in property, or in the bank, or with a few New Zealand shares; but now given that the world has grown so significantly overseas and we are such a tiny country it’s so important for New Zealanders to have some of their investment capital [speaking together] in an area other than New Zealand. Because Kiwis have their home, and maybe their bach, and maybe a share of a commercial building, but they need to have the other capital spread more widely.

To grow it they’ve got to be overseas in some area?

In some area – they need to be more diversified. Because if we had a foot and mouth outbreak in New Zealand …

Or even the rabbit calicivirus thing again?

Well we’re not exporting the rabbits, but we are sheep [speaking together] and cattle; our economy would just dive. We would have absolute disaster here. And foot and mouth could be introduced here quite easily …

Tomorrow …

Yeah, it could happen.

So in terms of the Stewart Financial Group and the eighties – and then going through to 2006 – in the eighties I was dealing with a large established group of risk insurance clients who’d been with us for many years. And I’d bought an agency when I first came into this business, so I bought a number of other clients in. I took over the servicing of their policies, and many of these people had whole of life and endowment assurance policies that were very popular in the early days of insurance in New Zealand. And in the eighties when I was dealing with these people, these policies were starting to mature and they would have worthwhile tax-free capital sums to invest. So I had limited investment experience, but knew that these people were cautious; they were conservative and they were nearing or at retirement. And we invested their capital prudently into what’s known as a tax-paid bond. You had four different portfolios to choose from, and I was choosing a commercial property portfolio for these people because there was less volatility and less risk. And we had a very satisfactory experience from those portfolios with returns of ten per cent per annum after tax for many years.

But then as I got enquiry for [from] other clients who were selling farms or businesses or would have liquidity events such as inheritances, the capital sums that we were looking after were much more substantial. And by then we’d been through the share market crash in New Zealand where shares dropped sixty per cent in 1987 within three months. People realised they had to be more serious about where and how they invested capital, and more and more people were seeking outside experienced advice.

So our company, through some insight I got from overseas, linked in with what’s known as a custodial service; this is an on-line custodian who holds the assets for all clients, be it personally or in their trust’s name; and they were backed by a bank. And they were just holding the securities and giving you daily reports on values, and because they owned the securities on behalf of all of the investors they collected all of the dividend flow. And they gave us tax reports at the end of the year showing how much tax they have collected, and give [gave] us composite reports which were absolutely superb for the accounting fraternity to gather together what were in the past very diversified portfolios, into one sheet for taxation reporting. And this is the world that’s now become mandatory in New Zealand, in that we fine-tune this system now every year whenever we can, whenever we can see ways of running it better with new technology.

And that is the area that my son is very, very good at, and most of our staff are focussed on that area. And my role in Stewart Group is more to handle the risk side of the business which is now significant in size in terms of looking after up to a thousand existing clients. And I have another associate working with me and a PA who now supports both our roles. Still, because our business is so significant and the age group of our clients has grown like I have, we are now having a lot of claims coming through, and these claims can be health claims, trauma claims or death claims. And it’s costing us one person a week now to administer all of the claims. It’s a role I find a challenge sometimes, but the insurers are very honourable; and if clients have paid their premium and the disclosure issues are fine, we have no problems with claims at claim time.

Because the government brought in that Disclosure Act recently that would have affected your business?

Yes – it’s interesting with disclosure. The clients have a responsibility to fully disclose any material issues linked to their health or their occupations or pastimes that may influence an insurer issuing a policy; and we have a responsibility as their advisor to ensure that they are honest and open with those disclosures. And we protect ourselves in some ways by sending them a copy of the proposal documents with all of their comments in it for them to read before the insurer issues the policy, and we ask that they read it and disclose to us before the policy is accepted if there is anything that needs to be amended in terms of additional disclosure.

And Mary and you had a significant date just a week ago?

Yes. Last Saturday was our forty-third wedding anniversary and at the time we were staying in our bach at Hatepe. Hatepe is situated in a Māori lease block of land off the shores of Taupō. And we were about to celebrate that day with some golf at the Wairakei Golf Course.

Now earlier on I was asked about some highlights in my life over the last few years. I did have an interest in the early days with boysenberries, because I met two men who influenced my life when we first came to Hawke’s Bay. One was Ross Duncan, an established substantial orchardist who also grew boysenberries for Wattie’s, and the other one was Tony Connor and he was the farmer I worked for at Crownthorpe. Both of these men had been jet boating for many years and used to take Mary and I boating, and we found it so much fun I ended up building my own steel-hulled jet boat which was just wonderful for Mary and I, for many years. And we used to take Nicholas, our son, in the early days and strap him into the boat so that when we hit a shingle bank in the river [chuckle] he was stable in the boat rather than flying around. And I teamed up with Ross Duncan and we did a New Zealand jet boat marathon, and I was his navigator; and we did five rivers in the North Island and five in the South, and it was one of the most tiring ten days away ever, but one of the most enlightening. And we had an absolute ball.

And then I was invited two years later to be a navigator for another jet boat driver, Maurice Cammock, and we did the same type of [ad]venture with some different rivers, but both again in the North and the South Island; and met some fascinating people, and were racing against boats that were twice as fast as us and that was okay because they were in another class, because we were racing in the family boat class.

So you weren’t using Hamilton Jets?

Yes. Every boat had to have a Hamil… No one had a jet boat that wasn’t [didn’t have] a Hamilton motor in it. But we all had different sorts of motors in our boats.

And the only other interesting thing that I’ve done is I’ve entered in the Masters’ Games twice; in Whanganui about ten years ago, entered in the men’s singles in tennis, and the doubles, and I got a gold with a very good friend in the doubles. And more recently when we entered in the World’s Masters’ Games in Auckland and I entered in the Olympic skeet event; and not known to me because I’d never shot a skeet before, I was completely and utterly out of my league. [Chuckle] We shot very few skeet and I should’ve been entered in another competition, but learnt a lot because I was shooting against world champions.

So the girls, your daughters, do [did] any of them follow you into the business?

Some background into Annabel, our second child – she did a double degree after she had schooled in Hawke’s Bay at Havelock Primary; and then she went to Woodford; and then she did a double degree in Dunedin with a focus on food and business management. And she on leaving university, got a job as a category manager for Foodstuffs in Wellington, and then moved on to work for Pitango, an organic food manufacturer out of Auckland. And her role there was development of new food styles and packaging, and she would market it into Woolworths and Coles in Australia. And when Pitango was sold to a private equity company she then moved to Griffin’s – ironically in the same role with food development within Griffin’s; and she ended up marketing to the same people at Coles and Woolworths in Napier [Australia] who had remembered her well from her Pitango days. Annabel now is settled and married in Sandringham in Auckland and has two daughters.

Sophie, our youngest daughter, was always interested in mathematics and marketing. She also went to Woodford, and did one degree in Otago; and on leaving that she went overseas – along with Annabel – for a year or two, initially in Australia and then into Edinburgh. And while she was in Edinburgh she got into a job for a business to business call centre. And she got to understand how that business worked, and got to know the owner very well who was a Kiwi. And when she returned to New Zealand she established a call centre here in Hawke’s Bay called ‘99’ – from the old business programme, Emma Peel I think. And she employed up to twenty-five staff and provided a call centre and a marketing centre for business to business throughout New Zealand. And then she bought a home – this was when she was on her own – in Hawke’s Bay, about the same time. And since then she has married Nick Sowman, who was a meat trader in the village. And prior to starting a family of two boys she sold her business to business call centre, and sold that home, and together they live on a lifestyle block at Lake Lopez on the way to Waimarama.

So they haven’t moved far?

No, they haven’t.

And Mary – does she host many people? Your clients? The social part of it …

Just some more background on the way Stewart Group work … in my early days when it was just Mary and I running the company and Nick wasn’t there, Mary would instigate and organise all client functions. She has a significant network of people that she knows, because she’s been involved in establishing some significant charities in Hawke’s Bay, like the Hospice Holly Trail, and organising fundraising for Woodford House; and she brought to Hawke’s Bay Project K, which was to nurture children who had low self-esteem. And more recently she brought an organisation to Hawke’s Bay called the Decorative & Fine Art Society, which hosts a meeting in Havelock North for about two hundred and fifty members every month; and they have international guest speakers talking about issues and aspects such as art, sunken treasure and history of certain countries overseas. But before Mary got involved with those organisations she was my eyes and ears in the community, and would co-ordinate all of the social functions where we were being host to clients.

Since then Nick has taken over that role, and we have staff on board now who co-ordinate everything to do with our client hospitality. So we’re involved with clay bird shooting, pheasant shooting, duck shooting, golf and wine tastings, theatres …

The Opera House?

Yes, occasionally the Opera House; we often host clients at a theatre for a new movie release, and we’re very actively involved with lots of our clients on a regular basis, and much of that hosting is done in our offices which are now big enough to hold about seventy people. But if we don’t wish to have them in-house we often have venues out of house, in wineries or on golf courses, to host selected people who have interest in those particular affairs.

So to be [as] a client of the Stewart Group you’re looked after; you’ve got a wrap-around …

Correct. So in talking about our business model, we are not all things to all people. We’re very selective as to the type of clients that we take on board, and because we’re dealing with wealth management, we’re dealing with high end clients with substantial capital. And on the risk side we’re dealing primarily these days in terms of new business with new self-employed people who have a degree of complexity behind their affairs that require[s] in-depth planning on the risk management side. So we don’t have lots of numbers of clients, but the number of clients we have are all high net worth, and are growing, and are substantial; have modest levels of debt; and we meet with them on a regular basis so that we keep in touch and know everything that’s going on in their personal lives and business world, so that our advice can be modified from time to time to reflect their changing needs.

And that sums up very well …

Just in terms of the way we are running our financial services business – the compliance requirements for giving advice are huge, onerous, and seriously costly in terms of fees that we have to pay the Crown, to provide this overview to protect clients. And as a result of this we have decided to deal with less clients going forward, and be way more selective with clients, so we are going to be dealing with a lower number of clients in future who are more substantial. And we are a fee-only practice so the clients are paying for our services and these are all fully disclosed. And really importantly is an issue that you have to be very selective in the type of clients you deal with. If you suspect that they are litigious because they’ve always been litigious in the past, you steer away from them. If there [is] a train wreck behind them of what’s gone wrong in their life, you know that you’ll be party to their next train wreck, and you won’t take these people on.

We have an eight-point plan, or an eight-point question that we table with a lot of clients that is simply eight points on the ideal client that we are looking for. And we table these eight points for them to read, and we’ll ask after they’ve read them, “Is this you?” And if they say, “Absolutely”, they’re in; and if they want to debate half of the eight points we will not take them on board.

So the choice of clients to reduce your stress of dealing with difficult people in the future … difficult or unreasonable people … is a very real issue. As our role in life is to seek first to listen and then to be understood, we have to ask clients a lot of questions when they want our advice so that when we give them advice we know that the questions we asked were appropriate, and that we’re giving advice that is appropriate to their goals and objectives going forward in life.