Over 90 per cent of RaboDirect assets representing more than $100 million will transfer to successor direct fund platform, InvestNow, following an agreement inked last October.
Under the deal RaboDirect investors had until the end of the current tax year to agree to the transfer terms or cash out their holdings.
Mike Heath, InvestNow general manager, said with the deadline fast-approaching the vast majority of RaboDirect investors had already committed to the shift.
The move would see InvestNow funds under management hit about $250 million.
Heath said the overwhelming support from RaboDirect clients was another fillip for the InvestNow zero administration fee managed fund distribution model and coincided with the platform’s first anniversary.
“We are in the final stages of transferring approximately $100 million of Rabobank’s managed funds clients on to InvestNow – meaning more than 90 per cent of the assets have elected to come to InvestNow,” he said. “The RaboDirect acquisition has certainly been a huge endorsement of our offering, which we have also seen in the material number of fund investors joining us every week.”
Heath said since InvestNow launched a year ago it had already attracted more than $150 million across its range of almost 90 funds offered by the current roster of 15 managers. The platform does not levy administration fees, unlike RaboDirect which charged investors 0.75 per cent for the service: instead clients simply pay the underlying management fee often at discount rates and with initial minimum investments as low as $250.
“Over the past twelve months, since our public launch in March 2017, we’ve landed a number of key milestones,” he said.
According to Heath, while the platform’s passive fund offerings – including the cheapest retail access to the Vanguard global shares index fund (at 0.2 per cent) and a range of NZX-owned Smartshares products – have proven popular, clients were also seeking active management solutions via the platform.
For example, NZ boutique firms Harbour Asset Management and Mint Asset Management have both seen increased direct flows via InvestNow, which would be boosted after more than 90 per cent of their respective RaboDirect investors shift to the new platform in the coming weeks.
Rebecca Thomas, Mint chief, said InvestNow was proving to be an effective way for managers to cater to self-directed managed fund investors.
“While InvestNow is a self-serve online investment platform, we get constant feedback from investors that they get great service from the InvestNow team if they ever call them with a query,” Thomas said.
Anthony Edmonds, InvestNow founder, said the platform’s clients included large family trusts, sophisticated high net worth investors, ‘millennials’ looking to build wealth, and parents establishing investment portfolios for their children.
“We’re also seeing an increasing number of advisers using InvestNow as a solution for segments of their client base, particularly those clients with portfolios up to $500,000,” Edmonds said.
He said Implemented Investment Solutions (IIS), InvestNow parent company, was expanding its Wellington office space to accommodate growth in both the platform and fund-hosting business, which has more than doubled over the last year.
“We now have five fund hosting clients including Russell Investments, Legg Mason, and Hunter Investments, and anticipate continuing to grow this business in 2018,” he said.
While InvestNow would formally transfer RaboDirect fund clients from the end of this month, the deal excluded the bank’s Cash Advantage (CAF) and Term Advantage (TAF) funds managed by AMP Capital.
The $64 million CAF, which peaked at over $600 million, will be wound up at the end of March with clients offered the option of transferring to an AMP Capital cash fund. Meanwhile, the TAF, now languishing at just under $50 million, will shutter later this year as the underlying fixed income securities mature.