The Wealthpoint national advisory network has been approved to offer a discretionary investment management service (DIMS) after earning a licence for the activity last month.
Created out of the former AMP adviser group in 2018, Wealthpoint focuses primarily on insurance and mortgage advice but it maintains a large book of KiwiSaver and other funds of about $4 billion.
The group hired Kerri Jenkins as its inaugural head of investments in 2020.
In addition to the KiwiSaver, superannuation and retail funds (most managed on the Consilium or AMP-owned Wealthview platforms), Wealthpoint offers a range of five model portfolios created by its independent asset consultant, Makao Investments.
According to disclosure documents: “The Wealthpoint Portfolios use strategic asset allocation as a primary driver of returns, selecting fund managers that use an active management style to take advantage of market inefficiencies that exist but should only be exploited by professional and capable investors.
“The portfolios are well diversified in terms of underlying assets but invest with only a few handpicked fund managers based on strict criteria to achieve good returns while effectively managing risk.”
While model portfolios can verge on DIMS territory, licensing provides issuers with greater scope to manage underlying investments without explicit client consent for each change.
The Financial Markets Authority (FMA) defines DIMS as “when an investor gives you the authority to make decisions about buying and selling financial products on their behalf”.
Including Wealthpoint the regulator has now approved 52 DIMS licences for groups ranging from large institutions to small financial advisory firms.
However, the DIMS world remains opaque with little public information available on performance of the underlying strategies, costs or even the overall size of the market.
The FMA slated DIMS for “a sector risk assessment to inform our future planned and thematic monitoring” in its 2021/22 annual corporate plan.
With almost 150 advisers operating under its licence, Wealthpoint is one of the largest financial advice providers in NZ.