tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, March 19th, 5:49PM

News

rss
Latest Headlines

Funds for fee-conscious customers

Grosvenor Financial Services has launched a stripped down range of funds aimed at investors concerned about fees.

Friday, August 21st 2015, 6:25AM 9 Comments

Grosvenor have launched a new range of investment products designed to meet a particular market need.  Traditionally Grosvenor have provided full service premium investment solutions.  The new range will see them extend the offering to include a simplified investment option.

Chief investment officer David Beattie said, “We have listened to our advisers.  They have clients with varying needs.  Some are new to investing, some are looking for something to complement their existing portfolio and some want to take a more active role in managing their investments.  That’s where the Focus series comes in.”

The series is a range of four multi-sector growth funds.  It is designed for investors looking to gain market exposure but with a lower level of active management.  Clients can access the funds with a small initial investment and will receive a basic reporting package.

Beattie said the series appeals to three types of investors: The DIY, non-believers in alpha, The high net wort client with a private banker hovering close by and truly, high-fee sensitive client.

He says Grosvenor's premium service includes active management, but much of that has been stripped out in the new series so it gives investors good market exposure. He says there is little point in getting into the debate on whether active management delivers, rather the goal was to develop a well-priced product which appeals to the non-beleivers.

"We try not get into the fundamentalist debate " around active versus passive management. He says the debate will roll on forever and "there's no real answer to it".

The series is deliberately priced in a way which makes it similar to what investors pay for private banking, which may help independent advisers win these prospects over.

Beattie acknowledges there is pressure on fees, especially as interest rates stay low. He says investors will struggle to fund an equivalent product with active management and this level of pricing.

The investment management fees are 1.45% and 1.55% for the balanced and hihh growth funds respectively and that includes the adviser's trail fee.

Grosvenor will also shortly launch a complementary SPECIALIST Series.  “This series is made up of four thematic funds which utilise the growing range of exchange traded funds.  It’s these funds that will really allow investors to tailor their investments by adding some exposure to specialised global investment themes," Beattie says.

The funds will initially target the Healthcare, Technology, Precious Metals and Resource Sustainability sectors, but will be added to based on demand for exposure to other themes. Grosvenor will research and select the most appropriate ETFs to include in each of the SPECIALIST series funds and wrap a PIE structure around them.  This will allow previously inaccessible funds to be available to New Zealand investors in a tax-effective structure.

Grosvenor’s long standing INVESTMENT Series has also undergone some tweaks.  “With the introduction of DIMS it was timely to make some changes so it was easier for advisers to administer.  While we were at it, we added three Socially Responsible Funds.”  The move follows Grosvenor’s experience with the popularity of its Socially Responsible KiwiSaver funds.

As a premium offer, Grosvenor’s INVESTMENT Series spans 14 funds, all built on an index-enhanced investment philosophy.  Central to this philosophy is focused downside risk management.  The new Focus Series is differentiated by greater index based underlying investments and minimal downside risk management.

Tags: David Beattie Grosvenor Financial Services

« Getting to know... Elaine CampbellLVR restrictions to be reviewed »

Special Offers

Comments from our readers

On 24 August 2015 at 2:45 pm R1 said:
They must be typos; 1.45% & 1.55% investment management fees; aimed at investors concerned about fees? I am still concerned at that level of fees and wonder how anyone can expect a reasonable return for the risks they are exposed to.
On 26 August 2015 at 8:52 am DavidBeattie said:
Just to clarify that the fees are INCLUSIVE of an Adviser servicing fee trail of up to 0.75%. This can be rebated back to the investor if the Adviser chooses. Underlying investment management and administration fees are therefore 0.7% to 0.8%.
On 27 August 2015 at 10:35 am R1 said:
Thanks for that clarification David. Just to further clarify if you will; does this 0.7-0.8% include underlying fund/product manager fees and expenses as well or are they on top? If on top then what would be the typical level of these fees?
On 27 August 2015 at 11:24 am gaman AFA said:
In what parallel universe do trail fees to advisors for fund products meet true best practice? Make the most of them now because it won't be too long before trail commissions are banned as the easily abused, misaligned, conflicted bad incentives they are. Unless the fund paying a trail is clearly superior to every similar fund that does not pay a trail commission, then good luck convincing your clients you are doing the right thing for them. And especially good luck if that argument takes place in a court room. Trail commission should have been pronounced dead after the fiasco of failed finance companies in NZ.
On 27 August 2015 at 12:40 pm DavidBeattie said:
Yes the fees also include the underlying fund and product manager fees and expenses.
On 27 August 2015 at 2:04 pm Jedi said:
I can understand why management fees of 1.45% to 1.55% for the new balanced and high growth funds can be regarded as very low fee. Looking at the latest Grosvenor prospectus, the following base management fees apply to their existing "Investment Series" multi-sector funds:

conservative fund 2.30% p.a.
balanced fund 2.67% p.a.
high growth fund 2.90% p.a.

Ouch!
On 1 September 2015 at 10:20 am DavidBeattie said:
Whilst the Investment Series fees look high, they too are fully inclusive of all underlying fund and product manager fees AND an Adviser service fee trail of up to 1.05%, which can be rebated if the Adviser chooses.
Excluding the Adviser fee trail, the total administration, fund management, trustee and custodial costs for the 3 funds above are:

Conservative 1.25%
Balanced 1.62%
High growth 1.85%

These are in line with retail multi-sector fund fees.
On 2 September 2015 at 11:50 am gaman AFA said:
So just to clarify David, does the 1.85%( for instance) include the currency transaction fee, MER's of underlying funds and unit trusts etc? I think 1.85% is pretty up there for a fee - how does this compare to your kiwisaver high growth fee?
On 3 September 2015 at 8:45 am DavidBeattie said:
Yes the 1.85% includes the MERs of underlying funds (it excludes the currency transaction fee, but this has averaged less than 0.01% pa since inception).
KiwiSaver High Growth fee is 1.27% (0.77% excluding a 0.50% Adviser trail).
The 1% difference (roughly) in the underlying management fee between Investment Series and KiwiSaver equivalent is reflective of a number of higher cost components included in the Investment Series funds, including greater active underlying portfolio management, more extensive use of risk management tools and quarterly tailored reporting.
Greater downside risk management via more put options on some of the US shares in the Investment Series has more than made up for the fee difference during this latest bout of market weakness :)

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com