KiwiSaver funds under management are too small to achieve the economies of scale the Green Party says would result from the creation of a single default fund, claims the Investment Savings & Insurance Association (ISI).
The ISI has released a briefing note it says will help inform the debate around the future of KiwiSaver, citing Australian research on the effect of scale on fund fees.
“A recent study from Australia. . . would imply that such economy in administration costs has only been achieved there when funds under management in a single fund (with individual account holders) exceed A$10bn,” said the ISI.
“Total funds under management across all KiwiSaver providers is currently just over NZ$9bn, well below the point at which Australian funds appear to achieve economies of scale in administration costs.”
FMA works on its roadmap
Strong regulatory enforcement, excellent market intelligence and open communication are among the traits market participants want to see from the Financial Markets Authority (FMA).
The findings are from a report by management consultants Oliver Wyman investigating the priorities for stakeholders across industry, Government and other major market participants.
Industry participants also stated they were seeking clear guidance and constructive engagement from the regulator.
“This report serves as a roadmap for us and has formed the basis of our thinking for the recently released Statement of Intent,” said FMA chief executive Sean Hughes.
Hughes said the FMA had built up momentum in its first six months issuing warnings, guidance notes and consulting with the market on key trends, promising the regulator would “keep listening to stakeholder feedback and input on how we’re tracking.”
RaboDirect boosts funds range
RaboDirect has boosted its fund offering with the addition of Harbour Asset Management and Mint Asset Management funds.
The funds will give retail investors increased access to Australasian equities and property, as well as New Zealand fixed-interest funds.
The two New Zealand-based fund managers offer Australasian equities with flexibility across both Australian and New Zealand markets. Harbour Asset Management also offers New Zealand fixed-interest funds, while Mint Asset Management gives investors exposure to Australasian listed property and other property-related shares.
The five new registered PIE funds RaboDirect will offer are; Harbour NZ Corporate Bond Fund; Harbour NZ Core Fixed Interest Fund; Harbour Australasian Equity Fund; Mint Australia New Zealand Active Equity Trust; and Mint Australia New Zealand Real Estate Investment Trust.
RaboDirect has also waived its normal 0.75% entry fee for the new funds till the end of the year.
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