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Fund managers deploy DIMS strategy

Fund managers are applying for discretionary investment management service (DIMS) licences because it offers them more flexibility than they would get from operating a purely PIE regime.

Wednesday, September 16th 2015, 6:00AM

by Susan Edmunds

Big fund managers dominate the list of licensed DIMS providers under the Financial Markets Conduct Act.

Angus Dale-Jones, head of compliance at NZAM, which is one of the licensees, said the licence allowed the fund managers to operate both a PIE and DIMS investment strategy.

That meant they could adapt investments to client circumstances when required.

Those who were happy to be part of an investing pool would better suit a PIE but those who needed something a bit different would need a DIMS strategy, he said.

“Often it doesn’t have a huge amount of difference in the outcome, especially if it is a class DIMS strategy, but it gives providers the ability to make changes that suit clients. Ninety per cent of the investment might be the same as the class but something at the end is changed. DIMS offers flexibility that is not possible in a PIE," Dale-Jones said.

Sometimes the DIMS strategy would involve swapping out one investment in a portfolio.

He said that might be relevant for investors whose professional roles meant they could not be seen to have money in a particular stock.

“You can do that with DIMS, you can’t with a PIE, where it is units and everyone has exactly the same.”

In other cases, investors could be invested in a number of PIEs via a DIMS.

Dale-Jones said a lot of the discussion about DIMS had focused on the smaller end of the market, where financial advisers offer services to their clients.

But he said there were a wide range of professionals managing investments on behalf of their clients.

He said DIMS was still a part of most funds managers’ businesses, although most of their growth was in PIEs.

DIMS investments would mean more accounting costs whereas PIE tax was simple, he said.

“For smaller investors the PIE structure is a very, very attractive mechanism. It’s the simplicity, it saves the compliance hassle, since we have had the ability to run a PIE it has become more and more popular."

ANZ is applying for a DIMS licence for its private bank business, unrelated to ANZ investments and retail funds.

A spokeswoman said investment decisions were made centrally by ANZ’s chief investment officer, not by private bank staff.

Tags: ANZ Dale-Jones DIMS NZAM

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.45 4.49 4.69
ANZ Special - 3.95 3.99 4.19
ASB Bank 5.80 4.49 4.49 4.45
ASB Bank Special - 4.09 3.99 3.95
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.05 3.99 3.95
BNZ - Std, FlyBuys 5.90 4.69 4.59 4.79
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.69 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.79 3.99 3.99 4.49
Kiwibank 5.80 4.80 4.94 ▼4.84
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 3.99 ▼4.09
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.46 4.69
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.05 3.99 4.49
Sovereign 5.90 4.49 4.49 4.45
Sovereign Special - 4.09 3.99 3.95
The Co-operative Bank - Owner Occ 5.75 3.99 4.15 4.35
The Co-operative Bank - Standard 5.75 4.49 4.65 4.85
TSB Bank 5.80 4.55 4.49 4.65
TSB Special - 4.05 3.99 4.15
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.05 3.99 3.95
Median 5.89 4.49 4.49 4.47

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