Milford Asset Management has made further tweaks to its fast-growing KiwiSaver scheme, dropping the annual administration fee for members at opposite ends of the age range and launching a new high-growth investment option.
Murray Harris, who moved from head of wealth management to a new KiwiSaver-focused role at Milford in April, said the scheme had dropped the annual $36 member fee for those under 21 and over 65 years of age as at September 1.
“We’re seeing increasing numbers of young people who are starting off in careers, or students working part-time, joining the Milford scheme,” Harris said. “They’re just beginning to see the benefits of KiwiSaver [including the post age 18 annual member tax credit top-up] and we thought removing the member fee for a couple of years would be another encouragement for youth to develop good savings habits.”
Similarly, for KiwiSaver members aged 65 or more – who lose the annual member tax credit – removing the $36 annual fee would incentivise them to remain in the scheme.
“And it recognises that those aged over 65 can shift their money to other unit trusts that don’t have the member fee,” Harris said. “It makes it fee neutral for them to remain in KiwiSaver.”
As of this July, those aged 65 and over are now able to join Kiwisaver for the first time.
In August, Milford also added a new investment choice to its KiwiSaver offering: the Aggressive Fund joins the Active Growth, Balanced and Conservative options in the scheme menu.
“There’s a fifth option, too, where members can create their own portfolio mix by allocating across the four funds,” Harris said.
The Aggressive fund, managed by Stephen Johnston, has a target allocation of 95 per cent to growth assets but can go to 30 per cent cash if required.
Unlike the flagship Active Growth fund, which has a flexible, absolute return investment brief, the Milford Aggressive product follows a more traditional long-only share fund asset allocation.
“We launched the Aggressive fund because some members were asking for a more growth-oriented choice – they see KiwiSaver as a long-term investment and want to maximise their exposure to growth assets,” he said.
The new fund has accumulated about $12 million and 200 members since going live on August 1, Harris said.
As revealed in the Investment News NZ (IN NZ) 12th annual KiwiSaver report last month, Milford was the only large scheme in the survey to accelerate its growth-rate over the year.
According to the IN NZ study, Milford was the third-fastest growing scheme over the 12 months to March 31, 2019.
“But Milford, too, significantly increased transfers year-on-year, reporting a net gain of almost $200 million from competitors compared to just under $93 million in the 2018 report,” the IN NZ analysis says.
Harris said Milford is seeing more transfer traffic in the wake of its social media and new prime-time TV ad campaign. He said Milford upgraded its technology over the last couple of years to include a member portal and to allow an easy online transfer process.
“We tend to see a spike in online transfers after the TV ad airs,” he said.
Milford is also about to launch an app to enable members to access, or join, the KiwiSaver scheme via mobile phone.
As at March 31, the Milford scheme reported just over $1.5 billion in funds under management and more than 27,500 members – putting it among the top 10 largest KiwiSaver providers.