Sharesies will be sounding out financial advisers to distribute its KiwiSaver scheme, which went live in full ‘self-select’ mode last week.
Matt Macpherson, Sharesies KiwiSaver head, said the group has already had tentative discussions with advisers about using the scheme that now allows members to pick individual NZX-listed stocks and exchange-traded funds (ETFs).
“We think our KiwiSaver product will work well with adviser networks,” Macpherson said.
The investment platform launched the scheme last year with a panel of five underlying diversified funds offered by Smartshares, Pie Funds and Pathfinder, before road-testing a direct NZX equities option with about 2,500 members from February this year.
Macpherson said the nine-month beta-test period allowed Sharesies to iron out kinks and satisfy any Financial Markets Authority (FMA) concerns about the direct stock-picking option.
Risk management ‘guardrails’ include a requirement for members to allocate at least half of their KiwiSaver contributions to one of the diversified funds and a maximum of 5 per cent of the portfolio to any one stock.
However, Sharesies scheme members remain responsible for rebalancing portfolios, he said.
The current KiwiSaver set-up allows members to establish, and change, an ‘investment plan’ to be implemented as cash flows in rather than on-demand trading as per the wider Sharesies platform, Macpherson said.
“We will in time introduce normal share buying and selling,” he said.
Other functionality is also slated for next year including US and ASX-listed shares with a wider choice of diversified funds also on the horizon.
Ultimately, the scheme may also allow members to select more than one of the base funds that serve as the diversification bedrock.
As well, the Sharesies KiwiSaver includes educational content, online tools and in-depth reporting of returns, tax and fees, Macpherson said.
On top of underlying manager fees, Sharesies charges 0.15 per cent for the self-select service along with transaction costs of 1 per cent for amounts up to $1,000 and 0.1 per cent thereafter.
The scheme uses Trustees Executors for custody and supervisory duties while admin split between Apex and in-house.
To date the Sharesies KiwiSaver has attracted about 2,500 members and $66 million with more than 30,000 prospects expressing interest in a pre-launch wait-list. Overall, Sharesies has over $2 billion in assets across its platform held on behalf of almost 600,000 clients including about 60,000 in Australia.
Sharesies joins Craigs Investment Partners and the Consilium-run KiwiWRAP in offering direct equities choice to KiwiSaver members – albeit in different structures. Both Craigs and KiwiWRAP operate under superannuation scheme rules with a flat 28 per cent tax rate while Sharesies is a multi-rate portfolio investment entity (PIE) with underlying securities all remoulded as mini-PIEs.