The Kiwibank-owned wealth manager Gareth Morgan Investments (GMI) may lower the barrier for entry into its tailored portfolio management service.
In an email GMI is asking clients to register interest in a proposal to reduce the investment minimum for its Private Portfolio Service (PPS), which to date has targeted wealthier investors.
“Currently our Private Portfolio Service is available to investors with 100K or more, but as we’ve had many requests for a solution for smaller investment amounts, we’ve spun into action to develop something,” the GMI email says.
However, a GMI spokesperson said the plan to bring the PPS within the reach of a broader range of retail clients was “only in the very early stages”.
“The point of the email was simply to see if there’s an appetite for it. GMI is keen to develop something and will move pretty quickly if customer feedback supports it,” the spokesperson said.
Under the PPS, GMI advisers work with clients to establish an appropriate asset allocation with investments then split between the group’s fixed income and growth portfolios.
PPS offers a tiered fee scale on its growth strategy for investors with between $100,000-$500,000, ranging from an annual management fee of 1.64 per cent to 1.08 per cent. For those investors the fixed income portfolio incurs an annual management fee of 0.91 per cent.
In addition, GMI charges an establishment fee of $500 plus GST to clients with $500,000 or less to invest.
“For portfolios valued over $500,000, our annual management fee is based on your Portfolio value and Investment Allocation,” the GMI PPS marketing document says. “The fee slides incrementally from 1.08% per year to 0.54% per year for the Growth strategy and from 0.54% per year to 0.27% per year for the Fixed Interest strategy.”
The service sets a minimum monthly fee of $268.75 for high-end clients and $72 for the under-$500,000 cohort.
“The GMI investment strategy team chooses the investments for you within each of the strategies and manages risk,” the document says.
GMI has a nine-strong investment strategy team including chief investment officer, Simon O’Grady. Last week the group hired former AMP Capital NZ multi-asset chief, Peter Verhaart, in a newly-created role as head of implemented investment.
O’Grady told Investment News NZ (IN NZ) GMI’s parent Kiwi Wealth was also developing a range of tools to enhance the retirement planning process.
While the new tools may involve an element of ‘robo advice’, he said not all of the advisory process could be automated.
“The input-output framework can be ‘robo-ised’ but the trust gap can’t be,” O’Grady said. “You will always need humans to help clients get over the knowledge gap to trust the investment process.”
GMI has nine authorised financial advisers (AFAs), according to the most-recent regulatory data.