Kiwibank set to dump Mercer as its KiwiSaver manager

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Kiwibank is on the verge of dumping Mercer in favour of AMP as its KiwiSaver provider.

Wednesday, August 12th 2009, 5:27AM 2 Comments

by David Chaplin

It is understood Kiwibank, which partnered with Mercer in 2007 to distribute its KiwiSaver scheme, will officially announce the switch to AMP next week.

Neither Kiwibank nor Mercer were available for comment.

According to its 2008 annual report, the Mercer KiwiSaver scheme claimed just over 30,000 members and almost $50 million in funds under management as at March 31 last year.

While it is unclear exactly what proportion Kiwibank customers were of the total Mercer KiwiSaver scheme, the transfer to AMP would likely involve many thousands of clients.

Early this year Kiwibank hired AMP as its fund management and financial adviser services provider for its new Wealth division. In February Kiwibank launched its Wealth service, which sells a range of simple AMP multi-manager funds as well as a range of insurance and banking products.

At the time, Tracey Berry, head of Kiwibank Wealth, said the division aimed to provide an "holistic" financial services business targeting average New Zealanders. The group initially hired five advisers to be based in several North Island locations, but Berry said the bank planned to expand the network over time.

The news of Kiwibank's switch of providers came just as the results of a Mercer survey found Mercer was the top-performing KiwiSaver scheme in the three months to June 2009 across the four major categories: default, conservative, balanced and growth.

In the year to June 30, ASB was the best-performing default fund; AMP topped the conservative fund list; while Fidelity Life produced the best-performing balanced and growth KiwiSaver funds.

However, the inaugural Mercer KiwiSaver Survey covered only 10 of the 30-plus KiwiSaver managers.

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