The stagnant KiwiSaver market looks set for a refresh with Nikko Asset Management slated to launch a scheme next year.
Last week Nikko told clients – some of whom run their own schemes – it was in the throes of building a KiwiSaver product to target a niche direct market.
About 80 per cent of Nikko’s $5 billion plus under management in NZ comes via the institutional market but the Auckland-based firm has established a strong toe-hold in the retail market of late.
According to Australian researcher Strategic Insight, Nikko was the fastest-growing retail manager in NZ last year, topping the $1 billion mark in June 2016.
At the time, Nikko NZ chief, George Carter, said growth spurt was down to the manager “having good products to offer the retail market and a commitment to servicing”.
It is understood the prospective Nikko KiwiSaver scheme would include a robo-advice-like front-end giving members access to a range of the manager’s funds. Nikko NZ currently offers 11 retail products and 16 wholesale funds covering most global and local asset classes.
In its submission to the Financial Markets Authority earlier this year on the imminent robo-advice exemption, Nikko backed the concept noting a growing advice gap in NZ.
However, the Nikko submission says “robo-advice is not something which replaces the human adviser but provides a complementary service that meets needs that may otherwise be unmet”.
If it goes ahead the Nikko scheme could join the Ngāi Tahu-owned Whai Rawa as KiwiSaver rookies next year in a market undisturbed by new entrants since mid-2016. Last month, the $64 million Whai Rawa savings scheme tendered for a ‘white-label’ KiwiSaver provider to launch early in 2018.
From a high point of more than 50 registered schemes the KiwiSaver market has condensed to just 29 (excluding the zombie NZX-owned Smartkiwi offer) following years of consolidation. The last new KiwiSaver entrant, passive fund operator Simplicity, launched in August 2016.
Nikko was unavailable for comment.
Meanwhile, as flagged here last month, the KiwiSaver research is due to diminish slightly this month with Morningstar dropping qualitative coverage on two schemes – Booster and Fisher Funds Two – effective December 15.
In a note, Morningstar says the move would allow the firm to “reallocate our analysts to research other strategies”.
“We recommend users form their own views on [Booster and Fisher Two KiwiSaver] or obtain financial advice,” Morningstar says.