Fisher Funds to jettison fees

Fisher clients were told performance fees will go in their monthly performance update. CEO Bruce McLachlan says Fisher wants to leverage the scale it has achieved through its acquisition of Kiwi Wealth last year.

The $310 million buyout maneuvered Fisher into the number three spot of the country’s largest KiwiSaver fund providers behind ANZ and ASB. Fisher gained Kiwi Wealth’s 270,000 members, and says client numbers now stand at more than half a million and funds under management are at $22 billion.

Currently Fisher’s KiwiSaver Growth Fund has a performance-based fee based on a hurdle rate of return of OCR+5% per annum. The hurdle rate is the minimum return the fund must achieve before the client is charged a performance fee. This means clients might pay a performance fee even when the fund’s performance is below the market index.

Fisher says it has provided a range of performance fees in its product disclosure statements as they vary considerably year-to-year and it informs clients. The highest performance fee paid by the growth fund was in the exceptional year to 30 June 2021, when it paid 1.78% against a fund performance of 21.19%. That performance fee was zero the following year ending 30 June 2022.

Dropping fees is good news for clients who last month faced the unsettling news that Fisher Funds KiwiSaver was among the many local schemes which lost millions of dollars through Signature Bank Investments. This was confirmed by Fisher to be around $50 million from its select international portfolio and NZX-listed investment company Marlin Global. A Fisher Fund spokesperson said at the time that this would equate to a loss of $320 on a $50,000 balance in the KiwiSaver Growth fund.

KiwiSaver returns for the last three months are 3.1% for conservative, 5.7% for growth, and 4.7% for the balanced strategy.

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Comments from our readers

On 14 April 2023 at 11:41 am Pragmatic said:

Wow - that’ll hurt their bottom line if they perform

On 18 April 2023 at 10:45 am Gordon Gecko said:

Never a fan of charging a performance fee over and above the management fee. Why should a manager be rewarded again for doing what they should be doing in the first place? Are they not already being adequately compensated via the management fee?

Fisher Funds to jettison fees

Fisher Funds has announced it will remove performance fees across all its KiwiSaver and managed funds’ multi asset portfolios on July 1.

Thursday, April 13th 2023, 2:40PM 2 Comments

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