Kōura Wealth is lining up to compete against the likes of Booster, Generate and NZ Funds in the hotly contested insurance and mortgage adviser KiwiSaver market with a new part-owner and ‘facilitator’ fee model.
Launched in 2019 as the first pure robo-adviser KiwiSaver scheme, Kōura has added a 0.3 per cent “facilitator” fee option following a deal inked with Select Investment Services last week. Select (not to be confused with the Investment Services Group-owned Select Wealth) is a partnership between adviser aggregator firm NZ Financial Services Group – or NZFSG – and Crest Holdings.
Previously, Kōura – a joint venture with the Warren Couillault-headed Hobson Wealth – allowed KiwiSaver members to create risk-appropriate portfolios via a robo-advice tool with a mix of six underlying (mostly) passive funds for a flat fee of 0.63 per cent plus $30 annual member fee.
But the new facilitator fee enables human intervention in the process to help members with any robo-advice questions, provide a point of contact and carry out annual KiwiSaver reviews.
The new Kōura product disclosure statement says: “To receive this higher level of service, you will agree to pay your facilitator an ongoing fee of 0.30% per annum of your KiwiSaver balance. This fee will be deducted from your KiwiSaver balance monthly and paid directly to your facilitator.
“A facilitator cannot give financial advice unless they are a financial adviser qualified to give investment advice. Financial advice will be provided by the kōura digital advice tool.”
The 0.3 per cent ongoing charge is in line with the other providers – notably, Booster, Generate and NZ Funds – that play in the market previously known under the registered financial adviser (RFA) label. Post the implementation of the Financial Services Legislation Amendment Act (FSLAA) this March, the RFA designation has been discontinued with the market now roughly divided between ‘financial advisers’ and ‘nominated representatives’ – all governed by similar obligations.
Rupert Carlyon, Kōura founder, said under the new regulatory atmosphere advisers would have to deliver services for any KiwiSaver fees.
“The Financial Markets Authority has made it clear that getting a KiwiSaver commission for nothing is no longer a model – advice needs to come with the fee,” Carlyon said.
He said the Kōura robo-advice tool was designed to provide KiwiSaver members with the robust, personalised guidance on investment choices that also meets FMA standards.
The Kōura advice system could help advisers in the 1,600-plus NZFSG network show they are complying with the new regulatory framework, Carlyon said.
However, he said the new ownership partners are “still working through the details” of how Kōura would be promoted through the NZFSG chain where other adviser-favoured KiwiSaver schemes hold some sway.
Under the deal announced last week the NZFSG/Crest consortium took a 45 per cent stake in Kōura, reducing the Hobson-related share to about 20 per cent (from the previous 45 per cent) and diluting Carlyon, who owned 55 per cent at launch, to 25 per cent.
“The deal gives us capital and capability,” Carlyon said.
NZFSG is ultimately owned by the Loan Market Group, a subsidiary of the Australian Ray White real estate firm. Formed in 2013 in a merger between mortgage-broking networks Allied Kiwi and Loan Market, NZFSG bought the 400-strong Kepa adviser network last October.
Crest, meanwhile, is associated with the owner of online insurance broker Life Direct, Mark Solomon, who also launched a KiwiSaver multi-scheme selling platform under the KiwiSelect brand in 2008. KiwiSelect is “currently making some changes”, according to the website.
But Booster also owns almost 20 per cent of Crest Holdings while NZ Trustee Services (a subsidiary of the Andrew Barnes-backed Complectus) holds about 36 per cent in the group on behalf of other investors.
Since going live late in 2019, the Kōura KiwiSaver scheme has signed up about 350 members, accruing some $8 million in funds under management. The scheme invests via BlackRock iShares exchange-traded funds for offshore assets and Hobson-managed portfolios for domestic exposures.
As well as Booster, Generate and NZ Funds, two recently launched KiwiSaver schemes – Consilium and Select Wealth (not to be confused with Select Investment Services) – are pitching to the financial adviser market.