The government-owned KiwiSaver and wealth management firm, Kiwi Wealth, will be first to market with a personalised robo-advice system in NZ after winning approval from the regulator today.
Under a process switched on by the Financial Markets Authority (FMA) earlier this year, providers can apply for an exemption from the current law requiring all ‘personalised financial advice’ to be delivered by humans.
The FMA exemption, offered ahead of law reform due later this year that will allow robo-advisers to roam free, was expected to attract applications from a handful of institutions.
However, Kiwi Wealth has jumped ahead of rivals with an in-house built ‘personalised digital advice’ service set to go live in June following the FMA exemption.
Joe Bishop, Kiwi Wealth general manager customer, product and innovation, said the robo-adviser, which builds on the group’s existing ‘Future You’ system, was the first step towards a holistic online retirement planning system.
Bishop said initially the full robo-service would only be open to existing members of the Kiwi Wealth KiwiSaver scheme to help them select and switch to an appropriate investment fund.
“But anybody can play around with a cut-down version of Future You on the website,” he said.
Ultimately, too, Bishop said Kiwi Wealth intended to include a broader range of both in-house and external assets under the robo-advice umbrella.
“The aim is to move away from just being a KiwiSaver tool to a full retirement planning system,” he said.
Future You mark two could even branch out to encompass non-retirement plans such as helping parents save “for their children’s education”, Bishop said.
Kiwi Wealth is currently trialing the ‘Bigger than Me’ program that treats online financial planning as a family affair rather than focusing on individual needs.
Despite the digital label, the Kiwi Wealth robo-adviser would enable clients to contact-a-human at any time, he said.
“The technology allows millions of New Zealanders to easily access financial advice for the first time,” Bishop said. “But the technology can only take people so far – if people want more they can contact a Kiwi Wealth representative by phone or access one of our AFAs [authorised financial adviser].”
The house-built Future You has already picked up a number of local and offshore prizes including second-place in the global pension scheme Eddy Awards for excellence in ‘Ongoing Investment Education’.
“We saw first-hand what was happening globally in robo-advice and knew that we could lead its development and application in New Zealand,” Bishop said in a statement. “Being the first to receive the FMA’s approval to provide robo-advice in New Zealand is a milestone for our business. For our team, it’s an acknowledgement of all the work we’ve done, as well as our credibility and expertise in innovation.”