We didn’t pay $50 per KiwiSaver member: Fisher

Fisher Funds chief executive Carmel Fisher says her firm did not pay $50 for every Credit Union member who joined her scheme.

The New Zealand Association of Credit Unions (NZACU) agreed to sell its KiwiSaver scheme to Fisher Funds largely because of new KiwiSaver regulations set to take effect this year.

 

Mercer was acting as the scheme’s trustee and manager, but under new regulations KiwiSaver funds are required to have an independent trustee.

“Mercer is the administrator and fund manager. When this new law comes in you’ve got to tidy up all the different entities when it comes to KiwiSaver,” said NZACU chief executive Henry Lynch.

Fisher Funds managing director, Carmel Fisher, said the upcoming regulations – and the adviser regulations already in place – may prompt more KiwiSaver fund consolidation.

“I think any regulatory change in this whole area [KiwiSaver] throws up opportunities,” she said.

“Even the changes around advice and what constitutes advice and who’s allowed to say what when they’re talking about KiwiSaver, that must make some providers question whether they want to take on the liability, the training requirements and so on.”

The deal will see Fisher Funds welcome an extra 4,000 KiwiSavers onto its books and Fisher said this expansion will benefit existing members.

“We’ve been quite open about the fact we’re committed to the KiwiSaver space and we know that scale allows us to charge lower fees for all our membership, so there is an advantage to scale.”

She also said Fisher Funds remained “open to any opportunities” within the KiwiSaver space.

“I’m sure we’re not the only ones looking at any KiwiSaver scheme that might be in play,” she said.

Fisher also dismissed reports in the New Zealand Herald that it paid the NZACU $50 for each active KiwiSaver scheme member.

“We haven’t paid anything, so it’s not entirely accurate to talk about the cost of the scheme,” Fisher said.

“This is not like Huljich where we bought that scheme, and obviously there was a price or value put on each member, we haven’t done that with the Credit Union.”

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KiwiSavers shun financial advice

KiwiSaver investors are more likely to use family and friends than financial advisers as their main source of advice, a new study has found.

The research, written by Dr Claire Matthews of Massey University, also found male KiwiSaver members appear to be more tolerant of risk than female investors in the scheme.

The results are from a nationwide survey of 1000 New Zealanders aged 18-65, conducted by market research firm UMR Research.

It found that, of those in KiwiSaver, only 4% said they had joined because they had been recommended to do so by a financial adviser.

Financial advisers were the main source of information for just under 20% of KiwiSaver members, while nearly 12% of those who switched providers said they did so because a financial adviser recommended it.

“The main source of information on financial matters was reported to be family and friends. Financial advisers, banks and the internet were reported to all be used in approximately equal proportions,” the report said.

“The source of information differed significantly by age. Use of financial advisers and books etc increases with age, while reliance on family and/or friends and on the internet decreases with age.”

Another finding was that many members chose their bank’s KiwiSaver scheme in order to keep all their financial affairs in one place.

“It appears the choice of provider is being driven by convenience, with a lack of proper analysis of the options available, and identification of the best provider and fund to meet the member’s needs,” the report said.

It concluded: “There appears to be a preference to take the advice of family and friends rather than of financial advisers.

“Only a few New Zealanders have joined KiwiSaver or made changes to their KiwiSaver account on the basis of a recommendation from a financial adviser.  Books and magazines , and the internet are relied on almost as much as financial advisers.”

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