Two cents on innovation


When many people think about innovation, the first thing to come to mind is the iPhone.

Certainly, the first generation of iPhone was innovative. It introduced a touch screen, useful GPS, plus decent email and web surfing capabilities.

Ten years on, when people talk about the iPhone and innovation there are two different camps. Many people say that each subsequent iPhone has consisted of little more than tweaks, and have represented very little in innovation. To their mind, innovation represents the qualitative shift from "zero" (nothing) to "one" (something new). 

Others will point out that innovation doesn't need to be revolutionary. Evolutionary change still represents innovation, and in most cases is the biggest driver of improved products and quality of life. Moving from "one" to "two" to "three" and onwards is still innovation.

Compare the iPhone generations here. Or consider this comparison of the first generation iPhone to the iPhone 7. 

In some fundamental way, a new iPhone is the same as the first iPhone. But in many profound ways, they are vastly different products.

I'm in the latter camp. Iterative improvements may be less dramatic than revolutionary changes. But the improvements still represent significant progress, and failing to acknowledge iterative improvements is failure to acknowledge how most human progress occurs.

But I want to slip something else into the discussion about innovation!

One of the reasons many people think of iPhones when it comes to innovation is that the iPhone is technological in nature.

Many innovations are not "technological" in the conventional sense.

When Henry Ford took advantage of assembly lines to create his Model Ts, this was an innovation. It wasn't a technological innovation, per se. It was a different way of doing things.

This combination of things: that innovation isn't necessarily revolutionary, but iterative; and that innovation isn't necessarily technological, but can relate to different ways of doing things - are close to my heart.

It especially relevant to what I'm doing with my business, Fairhaven Wealth.

To be frank, I'm allergic to businesses referring to themselves as "innovative". You try to work out what they mean by this, and it doesn't seem like anything other than a marketing buzzword. In fact, it almost seems to me that there is an inverse relationship between whether a company is innovative, and whether the company says it is innovative.

So I tend not to refer to myself or my business as "innovative". I'll probably post this article and I'll leave the matter at that.

But I think that what I'm doing is tremendously innovative. The way I'm structuring my business is profoundly different from the status quo of how most financial advisers in New Zealand and the rest of the world operate. 

For example:

  • Fairhaven Wealth is an advice-only business. We do not implement advice on behalf of clients. I've discussed this in detail here, so won't go into any further detail. 
  • I do not charge asset-based fees. In other words, I don't charge fees that are calculated as a percentage of a client's investment portfolio. I generally charge fixed fees only. I've discussed this in depth, so won't go into any further detail. 

I'm working on other ways of delivering advice in a cost-effective and client-friendly manner as well. I will discuss them at a later date.

The things I've noted may not seem especially "innovative". They aren't technologically-based. And they don't represent a fundamental shift in the underlying advice. However, they are far outside of the ordinary of what other advisers do. To my mind, they represent significant progress - or at least, provide options to potential clients who might not otherwise be serviced.

Like other forms of innovative changes, it isn't always easy to pull off. It takes a while to get other people to understand what you're doing, even if you think it's simple, straightforward, and clearly aligned with great outcomes for clients.

Innovative? I really think so. It's not a gadget. I'm not creating an entirely new service. But I am delivering it to clients in a new, unconventional manner. That represents progress and innovation in a very real sense.

Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.