Direct-to-consumer fund platform, InvestNow, plans to roll out a KiwiSaver scheme in the next financial year joining a slew of new providers on the scene.
The platform, owned by Wellington-based Implemented Investment Solutions (IIS), would offer members access to a range of fund managers – with some bundled into risk-weighted portfolios à la the standard conservative, balanced and growth profiles.
Anthony Edmonds, IIS founder, said adding a KiwiSaver option was a “natural step” for InvestNow, which currently offers more than 130 underlying products on behalf of 20 plus managers, covering most local and global asset classes.
Edmonds said the InvestNow KiwiSaver would include a diverse mix of managers and investment styles
“Our objective is to provide KiwiSaver investors with the power to tailor portfolios to meet their specific needs and preferred investment approach – whether that’s using active, passive, responsible investment or diversified funds,” he said. “Of course, we will also have a competitively-priced KiwiSaver proposition in line with the InvestNow low-fee philosophy.”
In addition to local fund firms, Edmonds said many of the Australian-based managers on InvestNow were keen to participate in the proposed KiwiSaver scheme, giving them access to the fast-growing NZ savings sector.
“InvestNow has seen a noticeable acceleration in member growth over the last few months with sign-ups noticeably increasing even since the beginning of 2020,” he said. “Feedback from members suggests there is huge demand for a flexible, well-priced KiwiSaver scheme to complement our wider investment options.”
KiwiSaver has experienced a resurgence of niche providers over the last couple of years after scheme numbers slumped dramatically. Almost 50 schemes roamed the KiwiSaver landscape in the immediate post-2007 regime launch period.
Following years of consolidation and closures (especially of the corporate-only schemes), the KiwiSaver scheme count fell to 29 in the 2017 financial year. However, during the last two years four new providers have entered the KiwiSaver game including three fund managers – Nikko Asset Management, Pie Funds Management and Pathfinder – and Kōura Wealth, a start-up technology play with links to Hobson Wealth.
Along with the InvestNow scheme, FNZ-powered investment platform and adviser services firm, Consilium, is also on track to venture into the KiwiSaver space this year.
The Christchurch-headquartered Consilium, which has over $4 billion in assets under administration, is in the throes of launching an upgraded version of its wrap platform. Consilium generally favours the ‘asset class’ (or factor) style of investing epitomised by US mega-manager Dimensional Fund Advisors.
As at the end of last September, KiwiSaver had accrued almost $63 billion in funds under management, boosted by exceptional market returns and steady member growth. In November last year, KiwiSaver membership tipped above 3 million, capturing about 60 per cent of the NZ population.
However, the retirement savings regime has been the subject of constant government tinkering with more on the way: most notably, the Ministry of Business, Innovation and Employment is due to release proposals for reform of the default KiwiSaver system within weeks.
Last November, Mike Heath, InvestNow general manager, said the business hit more than $400 million in funds under management and over 16,000 clients.
Subsequently, the platform has had a further growth spurt, amassing more than $450 million in funds under management held on behalf of almost 19,000 members. Last year the business also added term deposits to its product suite, since signing on five banks to the service.