
Nikko Asset Management NZ will launch a robo-advice service later this year after earning regulatory approval last week.
The new robo-advice system, built to complement the $5.2 billion manager’s recently-released KiwiSaver scheme, would offer “basic advice that’s free for everyone to access, intuitive and available online 24/7”, Nikko NZ chief, George Carter, said in a statement.
“Planning and setting savings and investment goals is something many of us know we should do, but often just don’t get around to,” Carter said in the release. “An online advice service that’s simple and easy to use, and helps you get comfort over your investment decisions, is clearly going to be of great value.”
Nikko is the second firm, after Kiwi Wealth, to offer a digital advice service under the Financial Markets Authority (FMA) exemption. The FMA opened up robo-applications this February after last year noting high industry demand to fast-track the development of digital ‘personalised’ financial advice – banned under current legislation.
The FMA exemption allows providers to offer personalised robo-advice following an authorisation process.
“The [robo-advice exemption] application guide has an indicative timeframe of one to three months, depending on how well prepared the application is, are all supporting documents provided and whether we need more information,” a spokesperson for the regulator said this February.
In October 2017 the FMA said industry consultation – started that June – found: “Strong support for an exemption from the current laws preventing personalised robo-advice.”
Furthermore, the FMA said the consultation found:
Opposition to financial limits and product exclusions;
- Robo-advice should meet the same standards as those that apply to authorised financial advisers (AFAs);
- Exemption applicants should be pre-approved or licensed; and,
- Exemption conditions should be aligned with new advice regime requirements.
The Financial Services Legislation Amendment Bill (FSLAB), close to a second reading in parliament, will formally legalise robo-advice.
Kiwi Wealth, which was approved under the FMA exemption in May, has begun rolling out its robo to a select group of KiwiSaver customers with plans to broaden the audience in phases.
However, the Nikko digital advice product would be open to all, Carter said.
“This development aligns with our values of innovation and commitment to helping people meet their financial goals, and follows on from our launch of the Nikko AM NZ KiwiSaver Scheme earlier this year, allowing Kiwis to invest directly with us for the first time,” he said in the release.
Nikko has over $1 billion in retail money with the remainder sourced from a wide range of institutional and wholesale clients. The Auckland-based firm was named Morningstar fund manager of the year in 2018 and INFINZ bond manager of the year this May.