Fisher Funds has officially returned to default KiwiSaver status just over a year after losing the privilege.
In a note published late in 2022, Fisher chief, Bruce McLachlan, confirmed the manager would keep default credentials for its recently purchased Kiwi Wealth scheme following ministerial approval.
Fisher was fired as a default KiwiSaver provider in 2021 during a government clean-out that saw five incumbent schemes dumped – almost exclusively based on fee levels. All of the five cancelled schemes had been default options since the inception of KiwiSaver in 2007.
The group paid $310 million to buy Kiwi Wealth last November, triggering the need for government consent to roll over default status.
Although the government was widely expected to rubber-stamp the now Fisher-owned Kiwi Wealth default fund, the formal sign-off eases any lingering concerns.
“While this was never a condition or intention of the acquisition, we nevertheless welcome the decision as it ensures members, both new and existing, have certainty around their position,” McLachlan said in the statement.
“We intend to continue to operate the Kiwi Wealth Default Fund as a standalone entity, and our focus remains on working through a seamless transition and integration of the two businesses throughout 2023.”
As at the end of September last year, the Kiwi Wealth default fund reported almost $470 million under management on behalf of just under 61,000 members.
Kiwi Wealth established the default fund for launch in December 2021 under the revised government terms including a shift to balanced asset allocation (from the previous conservative settings) and fossil fuel stock restrictions.
The Kiwi Wealth default fund annual fee of 0.37 per cent also saw the manager, which generally favours active investment, adopt a mainly passive strategy for the product. As well, the-then government-owned entity hastily rearranged its back-office systems to meet the new default standards, appointing MMC for retail registry.
Fisher already operates two KiwiSaver schemes while also blending its 2021 Aon purchase with the Fisher Two scheme last year.
However, merging Kiwi Wealth and Fisher will be a much more complex process with the two firms to continue under “business as usual” conditions for the time-being, McLachlan said.
Some staff changes are expected for Kiwi Wealth with at least one portfolio manager, head of thematic investment Nathan Field, confirming an exit. Field will move to Generate this March to manage a global shares portfolio.