Hobson Wealth Partners has launched a triplet of portfolio investment entity (PIE) products under a fund-hosting arrangement with Wellington-based Implemented Investment Solutions (IIS).
The deal marks the first domestic fund-hosting client for IIS and a return to the PIE world for Hobson chief, Warren Couillault.
Couillault, previously involved with Fisher Funds and Generate, said the new Hobson PIE fund range – to be marketed under the Navigator Service brand – was aimed at mass-affluent clients with up to $500,000 to invest.
He said the traditional brokerage model of investing client money directly into underlying securities was not cost-effective for portfolios under $1 million or so.
“I’ve been disappointed at the lack of investment alternatives that are available to those that have a substantial amount of savings but not the millions that are required for detailed personalised financial advice – we’ve fixed that now with the Navigator Service,” Couillault said in a release.
The Navigator Service allows investors to mix-and-match the three underlying funds (covering NZ equities, NZ fixed income and global shares) into a portfolio adjusted to suit client risk profiles. Navigator clients will complete a risk-profiling questionnaire to create a recommended portfolio.
Couillault said the three in-house-managed Navigator funds would mirror the investment advice provided to direct Hobson clients, although the implementation method differed.
The partnership with IIS enabled Hobson to “develop and launch these funds quickly and efficiently, knowing they’re built on compliant, industry-leading investment architecture,” he said in a statement.
Following the agreement, IIS now boasts eight fund-hosting clients with Hobson the first NZ-domiciled manager on its books.
Anthony Edmonds, IIS founder, said in the release that working with a domestic business was “a natural evolution in the local market, enabling financial advisory and wealth management firms to focus on investment management and their investors, while outsourcing the day-to-day running of the funds to us”.
Previously, IIS has provided the PIE compliance wrapper around products for offshore-based managers including Legg Mason, Russell Investments, Antipodes, APN Property Group, First State Investments, and PIMCO.
From scratch in 2011, IIS has grown to about $4 billion in funds under management.
According to Couillault, the Navigator funds carry a flat, all-in fee of 1.25 per cent, which covers investment management, administration and advice. MMC provides registry and fund administration for the new products.
He said Hobson planned to open up the Navigator to online application next April, piggy-backing on robo-advice technology developed by another associated business, Kōura Wealth. Hobson owns about 45 per cent of Kōura, which went live earlier this month as a robo-delivered KiwiSaver scheme.
Both Navigator and Kōura would help Hobson broaden its offering beyond its traditional high-net worth brokerage client base, Couillault said.
Last June Hobson was also accredited as an NZX trading and clearing participant as part of a move to internalise more services. Next year, Hobson plans to bring custody in-house as it shifts away from current investment platform, Aegis, to the NZX-owned Wealth Technologies.
Hobson was committed to the platform departure, Couillault said, regardless of last week’s purchase of Aegis by MMC.
Since a Couillault-led management buyout of Macquarie NZ created Hobson in 2016, the firm has added about $1 billion in assets under management to reach over $2.7 billion today.