KiwiSaver

TSB bought into a stake in a KiwiSaver fund manager without having any authorised financial advisers on staff.

TSB became Fisher Funds’ second-largest shareholder, with a 26% stake, when it backed its acquisition of TOWER’s investment business last month.

But its first priority now is upskilling its staff as it does not have anyone qualified to advise on investments.

Morrison Co, previously Fisher Funds’ second-ranked shareholder after the Fishers themselves, was shunted down the ranks and did not inject any capital into the deal.

Kevin Murphy, chief executive of TSB, said the bank has no authorised financial advisers. Training staff to be able to offer KiwiSaver products was a priority.

TSB had offered KiwiSaver products through SuperLife. Murphy would not say how many customers it had placed with the investment provider.

Murphy said despite the existing relationship with SuperLife, TSB had been looking for a way to have more presence in the KiwiSaver market. “It worked well but we were looking for greater impetus.”

He said Fisher Funds’ products, distribution and presence in the market were a good fit for TSB.

Whether the relationship with SuperLife would continue in any capacity, he would not say. “It’s early days, we’re still working through that.”

TSB would not offer Fisher Funds KiwiSaver products in its branches until staff were sufficiently qualified, he said.

ASB is closing down its KiwiSaver scheme set up for advisers and is currently considering its future options for the product.

It says that, as part of a review of its KiwiSaver schemes, it will no longer be accepting applications to join the FirstChoice KiwiSaver.

First Choice differs from the ASB KiwiSaver scheme as it has actively managed funds and was setup for advisers and as a distribution option for Sovereign. The ASB scheme uses index funds and is sold through the bank distribution network.

Currently First Choice has around 15,000 members and $200 million of funds under management while the ASB scheme has 370,000 members and more than $2 billion.

ASB’s Executive General Manager Wealth and Insurance Blair Turnbull says the reasons behind the change are largely to do with economics. He says some of the funds within First Choice, including the Sustainability fund which invests in former US vice president Al Gore’s company, have small amounts of funds under management.

Although First Choice has active funds there is a skew towards conservative, cash and balanced funds in the scheme.

He says that ASB GI, the manager of both FirstChoice and the ASB KiwiSaver Scheme, is considering its options for FirstChoice, including the possibility of transferring members to an alternative scheme.

ASB is continuing to develop its flagship scheme which includes adding some actively manage fund options “in the not too distant future.”

KiwiSaver provider Fidelity Life has teamed up with giant global investment manager Dimensional to launch two new funds.

Fidelity Life is launching the Asset Class Conservative Kiwi Fund and the Asset Class Growth Kiwi Fund, which will both have DFA Australia (Dimensional) as their primary fund manager.

Dimensional manages more than US$270 billion in assets globally.

It has close links with leading academics in the field of modern finance, including Gene Fama and Ken French and Nobel Laureates Merton Miller, Myron Scholes and Bob Merton.

Normally, access to investing with Dimensional in New Zealand is restricted to a select number of accredited financial advisers and institutions; however, the Fidelity KiwiSaver Scheme now allows KiwiSaver members the opportunity to utilise the Dimensional investment approach.

Further details about the funds and Fidelity’s deal with Dimensional will be provided at a briefing today.

KiwiSaver members will be offered the chance to invest in hedge funds by a new player in the market, Generate KiwiSaver.

It registered its prospectus on Friday.

Generate KiwiSaver is run by Generate Investment Management,  headed up by former Huljich Wealth Management investment manager Henry Tongue. Directors include Warren Couillault, formerly of Fisher Funds.

The scheme will invest in 10 to 15 fund managers globally,who are focussed on making money in up and down markets. Some would be hedge funds.

The scheme’s fees will be higher because of the cost of using other fund managers.  The scheme will offer conservative, growth and focused growth options.