AFA offers digital KiwiSaver solution

An authorised financial adviser who has been granted an exemption to offer personalised roboadvice says the process was an involved one.

Tuesday, February 12th 2019, 6:00AM

Clive Fernandes

Clive Fernandes is director and founder of National Capital, a financial advice firm that focuses on KiwiSaver.

It is the fourth business to be granted the exemption by the Financial Markets Authority, behind Kiwi Wealth, Nikko Asset Management and Cigna Life.

He said he had been working "behind the scenes" for the past seven months on the application process to be approved to offer financial advice, and building the KiwiSaver roboadvice service.

"Our digital advice service is aimed towards solving the issue of everyday Kiwis not having access to personalised advice for their KiwiSaver investments," he said.

"We currently have a working digital product which we are rolling out to an initial set of users. Users can start the advice process by going to our website and use the service there. We're working with a group of KiwiSaver providers and may add more as time progresses.

"Right now every piece of advice that goes out will be vetted by an AFA to ensure that the SoA is fit for purpose for the user based on the data provided and matches what a human adviser would recommend based on that data. Both data collection and delivery of the final recommendation happens online."

Schemes are shortlisted using the FundSource performance tables and FundSource star ratings.

National Capital then uses Morningstar's quarterly KiwiSaver surveys to determine if the fees charged are reasonable. The highest rated fund is then recommended.

"We started off with the intention of using as many or even all of the KiwiSaver providers in our universe of funds taken into consideration," Fernandes said on his website.

"However, as we progressed on evolving the business model, we realised that it would not be feasible for us to monitor all 217 KIwiSaver funds. We then decided it would make more sense both from our and the clients perspective if we were to focus on a select group of providers that we were happy would be able to provide us with a good range of options from which to select appropriate funds for our clients from.

"We initially made contact with all the retail KiwiSaver scheme providers. We shortlisted those who had business policies that allowed and encouraged them to work with external financial advisers. We then had a series of meetings with representatives from all those schemes."

National Capital now works with Aon, ANZ, Milford Asset Management, Fisher Funds, Generate and Booster Investment Management.

On its website, it says it will not market itself as independent because it will be paid commission.

Fernandes said the process of applying for the exemption had been a long one.

"The application process was not an easy one, but it was well worth it. It has taken us six months to go through the exemption process, and part of the process was ensuring we had the right processes, policies and structure in place. I do not feel that the process could or should have been faster. We're talking about a service that could affect the lives of tens of thousands of Kiwis and I was impressed by the FMA's thoroughness and support through the process. 

"As a company, our focus is on good client outcomes, and having a robust compliance regime to ensure those outcomes. We've built our processes and structure not for what we are as a company now, but for what we aim to become. We're 100% focussed on KiwiSaver for now, since we believe it's an area we can effect the most good."

Tags: KiwiSaver roboadvice

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