Next-generation Auckland-based investment boutiques Kōura and Kernel have both reported a surge in KiwiSaver assets under management over the last 12 months on the back of financial adviser support.
Kōura, for example, has seen KiwiSaver funds under management almost triple during the last year or so to reach $200 million and approximately 5,000 members: the scheme held $65 million on behalf of fewer than 2,000 members as at March 31 last year.
In a release last week, Kōura said since switching on a ‘facilitator’ remuneration service in 2021 (enabling an annual 0.3 per cent advice fee to be added) the scheme has struck relationships with about 500 advisers.
Michele Blake joined the group last week as head of distribution from the AMP-owned AdviceFirst. Blake will spearhead the Kōura advisory relationship function.
The scheme, which started life in 2019 as a ‘robo-adviser’ offering part-owned by Hobson Wealth, also received a distribution boost in 2021 when Select Investment Services (a partnership between adviser aggregator firm NZ Financial Services Group – or NZFSG – and Crest Holdings) took an almost 50 per cent share in the business.
Rupert Carlyon, Kōura founder, said about half of the scheme’s adviser clients have come via NZFSG, which counts over 1,100 mortgage and insurance advisers in its network – making it the largest Class 2 financial advice provider in the country.
Carlyon said advisers were increasingly aware of the importance of KiwiSaver to their clients and as a business diversifier.
“And with the FSLAA [Financial Services Legislation Amendment Act] regulations now in place advisers realise they need to do things in a different way.”
He said Kōura was seeing growth from the direct-to-consumer market, too.
The scheme offers a range of in-house run local asset strategies and global passive funds managed by BlackRock as well as a bitcoin option (limited to 10 per cent of portfolios with automatic rebalancing).
More recently, Kōura has formally established a suite of four diversified strategies to allow easy access to blended portfolios without using the robo-advice tool (which produces the same risk-weighted end results).
Earlier this month Hobson Wealth (now part of Forsyth Barr) exited the Kōura register with its roughly 20 per cent stake now owned by Warren Couillault – the former Hobson chief.
Meanwhile, passive fund specialist, Kernel – established in the same year as Kōura – is also making inroads with advisers for its KiwiSaver scheme, according to founder, Dean Anderson.
The Kernel KiwiSaver, which launched in 2022 three years after the Kōura scheme, just breached $220 million: the broader Kernel funds business is now about $1.2 billion.
Anderson said Kernel has signed on over a dozen advisory groups as KiwiSaver partners after creating an option for advisers to charge service fees.
“Over the last six to 12 months we’ve seen a big structural change in the market as more insurance and mortgage advisers enter the KiwiSaver space.”
Advisers new to KiwiSaver, as well as incumbents questioning current provider relationships and/or facing heavier compliance duties, are looking for innovative options, he said.
“We’ve noticed, too, that advised KiwiSaver balances tend to be about two- or three-times larger than the average,” Anderson said.
This month Kernel also added its US and NZ fixed income funds (established last year) to the KiwiSaver product, allowing advisers more flexibility in building diversified portfolios for their clients within the scheme.