Direct-to-consumer fund platform InvestNow is closing in on $500 million under management after inking a deal to take on AMP Capital NZ’s retail clients.
Under the arrangement revealed last week, AMP Capital will transfer administration duties for its small direct retail book of about 500 clients and $30 plus million to InvestNow as of April 1 this year.
However, AMP Capital will stop accepting direct investor applications on February 28, bringing to a halt a service it launched about five years ago.
While direct clients can be more lucrative for fund managers than intermediated sales, they also bring associated service and administration costs that need scale to offset.
Dealing directly with retail clients also introduces compliance risks that many fund managers prefer to outsource to financial advisers or platforms such as InvestNow.
In a statement, Bevan Graham, AMP Capital NZ head, said:
“As a well-regarded provider with over 19,000 customers, InvestNow is able to offer a comprehensive investment platform and online services for our clients, and is well placed to continue to meet the needs of direct investors in AMP Capital funds on a platform that is continuously evolving.”
AMP Capital already lists a number of products on InvestNow but from February 28 its full retail suite will be available on the platform.
InvestNow founder, Anthony Edmonds, said the platform transfer would not impose any costs on AMP Capital clients.
Edmonds said fees would also remain unchanged for the AMP Capital clients.
“However, direct AMP Capital clients will notice a difference in communications and reporting after the transition to InvestNow,” he said.
AMP clients “will not be required to do anything as part of the transition process”, due to take place on March 31, the release says.
Launched early in 2017, InvestNow – part of the Wellington Implemented Investment Solutions group – has more than $450 million under management on behalf well over 19,000 members.
Edmonds said this January the platform saw a record surge in membership, adding 1,500 investors over the month.
Currently, InvestNow offers about 110 products – covering funds and term deposits – from 20 plus providers.
AMP Capital NZ manages over $22 billion, making it the country’s second-largest non government-owned fund manager.