Aon KiwiSaver members will be shifted en-masse into a Fisher Funds scheme next month as the new owner rationalises its recent purchase.
Fisher advised Aon members early in June of the impending move into like-for-like funds in the Fisher Two KiwiSaver scheme that would see a maximum of about $800 million flowing out of current underlying managers.
Bruce McLachlan, Fisher chief, said the almost $15 billion manager was communicating with the Aon members ahead of the well-flagged investment transition.
It is understood Fisher has given notice to the four Aon investment managers with Russell Investments and Milford Asset Management set to lose about $500 million and $200 million, respectively, from the KiwiSaver funds – assuming all members transfer.
ANZ and Nikko manage about $40 million and $12 million, respectively, for the Aon KiwiSaver.
The same set of four managers look after a further $200 million or so of Aon employer master trust money split across a similar ratio: Fisher will also shift those funds into its in-house managed super master trust.
Fisher told Aon KiwiSaver members the prospective transfer would be on “terms that will be no less favourable” than current arrangements with lower investment fees and access to in-house financial advice part of the package.
Aon members would shift to Fisher funds of a comparable investment strategy, the note says, including GlidePath funds that match the Russell LifePoints target date series.
The bulk transition is subject to Financial Markets Authority (FMA) approval with members unable to change investment strategies within the Aon scheme until the regulator makes a decision either way.
However, members remain free to change KiwiSaver schemes at any stage with at least some leakage expected along the way. The Aon KiwiSaver was well-supported by financial advisers, some of whom are understood to be recommending clients move to schemes that offer their current underlying investment managers.
Aon KiwiSaver members also have until July 10 to lodge objections to the Fisher proposal but given the already flexible exit options, no serious complaints are expected.
“If the FMA grants its approval, the transfer will happen in July 2022,” the Fisher letter says.
Fisher bought the Aon schemes last October, closing the deal at the end of the following month.
Aon launched two KiwiSaver schemes when the regime began in 2007, eventually combining them into a single entity. Despite its at-the-time unique fund manager choice options, good investment performance and links to in-house and external advisory networks, the Aon scheme stalled after an early period of growth, plateauing at about 20,000 members from 2012 on.
Fisher, which lost its default KiwiSaver status as of last December, is also a leading contender in the race to buy the approximately $9 billion Kiwi Wealth business.
The Kiwi Wealth sale, advised by the Australian investment banking arm of Goldman Sachs, has attracted several bidders with a result expected by the end of July.