Originally built on a network of direct clients, Milford Asset Management switched to multi-channel distribution since entering its retail phase in 2007.
For example, the manager boasts an in-house financial advisory force (licensed under the Milford Private Wealth entity) of 33, ranking it among the upper mid-tier wealth managers in NZ.
And while Milford famously eschewed paying commissions to external financial advisers, the group has steadily established a following among third-party advice businesses in recent years.
According to Michael Robson, Milford head of intermediary distribution, independent financial advisers now account for close to 10 per cent of the firm’s $17.6 billion of funds under management including KiwiSaver and other retail products.
Since solving the commission issue with a transparent advice fee and client rebate system a few years ago, Milford has made significant inroads into the third-party KiwiSaver distribution market.
Independent advisers have directed about $530 million to the now $5.6 billion Milford KiwiSaver scheme over the previous three-and-a-half years
Robson said the third-party KiwiSaver growth has come on the back of solid Milford investment performance, modern advice technology support and an efficient fee payment system.
“We took a different approach to some other KiwiSaver providers,” he said. “Milford has a transparent fee-for-service that is clearly disclosed to clients.”
As well as the, tax-deductible, KiwiSaver advice fee reported in dollar terms, Milford also pays a rebate to clients of external advice firms.
The rebate – ranging from 0.05 per cent for cash funds to 0.2 per cent for most others – recognises the administration services carried out by independent advisers that would otherwise fall to Milford (and is a cost baked into the broader management fee).
Milford technology designed to streamline the KiwiSaver advice and reporting process has also been well-received by advisers, Robson said.
“After completing a statement of advice, advisers can complete the entire KiwiSaver sign-up online with a copy sent to the client,” he said.
More recently, Milford has added a function to link any client advice updates to seamless online KiwiSaver fund changes – such as moving to a more conservative fund ahead of house-buying plans.
The manager’s closer relationships with independent advisers will also see Milford host a number of ‘key clients’ for an upcoming trip to New York.
Robson said the New York visit is no junket with advisers paying their own way.
“We see it as a value-add to top clients,” he said, with a core educational component.
The US trip is in the same vein as previous Milford-hosted adviser attendances at Australian Morningstar conferences, Robson said.