The KiwiSaver market is set to welcome another player to the competition after a long dry period with a second Consilium offer due to go live mid-April.
Launched under the Consilium in-house investment banner, Evidential, the new KiwiSaver offer targets mid-market advised members via a mix of three diversified funds as opposed to the group’s self-select scheme, KiwiWRAP.
Damon O’Brien, Consilium investment director, said the firm decided to create the Evidential scheme following demand from advisers for a KiwiSaver option for clients who didn’t fit the KiwiWRAP profile.
“Advisers like KiwiWRAP but they told us there’s a gap for some investors – especially those with less than $50,000 in KiwiSaver,” O’Brien said.
KiwiWRAP, built on FNZ technology, went live late in 2020 as a broad choice ‘platform-style’ scheme, enabling advisers to build personalised KiwiSaver portfolios for members from a wide selection of underlying funds and securities.
But the scheme requires a minimum investment of $50,000 while its superannuation legal structure imposes a flat 28 per cent tax rate on members.
After a slow-burn start, KiwiWRAP saw a growth spurt over the last 12 months to reach about $150 million under management this month.
The Evidential scheme, however, takes a more traditional approach to KiwiSaver, giving members a choice of three diversified funds in an over-arching portfolio investment entity wrapper, going up the risk scale from balanced to growth and high-growth.
While the new KiwiSaver scheme would use the two Evidential products as underlying funds, O’Brien said the manager had adopted a ‘model portfolio’ style for the three strategies.
Currently, Evidential hosts two Dimensional Fund Advisors global strategies covering bonds and equities.
“There’ll be about six to 10 allocations in each model, across a range of asset classes and underlying managers,” he said, and aligned with the Consilium ‘evidence-based’ investment philosophy.
Consilium has priced the Evidential KiwiSaver funds from 0.7 per cent for the balanced option to 0.8 per cent for the high-growth strategy: as per the KiwiWRAP scheme, advisers can also charge a fee on top to an upper limit.
“This is another KiwiSaver scheme that will only be offered through advisers,” O’Brien said.
Unlike KiwiWRAP, though, the Evidential scheme uses Adminis for custody and administration: both schemes have Trustees executors as supervisor.
The Evidential release comes almost two-and-a-half years since the last new KiwiSaver scheme hit the market when Sharesies entered the fray in December 2022. Some 39 KiwiSaver schemes are now registered, although four operate in ‘restricted’ mode while the ANZ Default option is closed to new members.