AFA’s robo offering hits $1m FUM

An Auckland AFA who launched a roboadvice offer this year has amassed $1 million under management.

Clive Fernandes, who owns and runs National Capital, was given a robo exemption at the end of January.

His roboadvice platform offers KiwiSaver advice, with a small group of providers.

Schemes are shortlisted using the FundSource performance tables and FundSource star ratings.

National Capital then uses Morningstar's quarterly KiwiSaver surveys to determine if the fees charged are reasonable. The highest-rated fund is then recommended.

Fernandes said $1m was a “small but significant milestone” and most of it had happened in the last month or so.

“Based on that, I see good growth going forward for the rest of the year. We are of course, still in the stage of learning and refining the model – and so have been throttling marketing efforts and growth intentionally.

"As a company, we are growing and should have our first few employees and interns hired in the next few months."

He said most clients were individuals approaching National Capital directly.

“At the current moment our business model is B2C, but once we have built our reputation and brand, we may offer our robo-advice platform to other advisers.”

Fernandes said it would not be long before every financial advice firm had to have digital capability.

“Of course, there will always be the 1% of advisories serving a diminishing cohort of clients who don't want a bar of digital and still want to drive for an hour to have a cup of tea with their adviser, but for economic reasons at least, it makes sense to look to the future.”

Advisers would have to differentiate themselves in other ways, he said, such as by mastering behavioural finance to boost investor returns by stopping clients making inappropriate decisions.

“ Delving into the study of behavioural finance can help advisers gain greater lifetime returns for their clients and build a strong relationship with them. It will also help the behaviourally focused adviser to have a point of difference, not only from the coming roboadvice threat, but also the other advisers in the market.”