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NZ fund managers better positioned than Australian: Researcher

New Zealand’s fund management sector has more competitive offerings than the Australian market – and less to worry about as regulators crack down.

Wednesday, February 13th 2019, 6:00AM

That’s according to Super Ratings, a Lonsec-owned fund researcher, which primarily focuses on Australian super funds.

It recently completed a report on what the Royal Commission of Inquiry into misconduct in Australia’s financial services sector would mean for the industry.

It said it would mean a "sweeping focus" across organisations to ensure strategic plans and KPIs were appropriately aligned and manged.

"The report clearly reinforces organisational responsibility as front and centre in the solution.

"The impact of the Royal Commission for many in the industry will be lasting. The key takeout for many industry participants should be that most providers face challenges in some shape or form. We believe the true test of an organisation will be; if another commission (hypothetically) were to be held in five or 10 years’ time, will providers have had the foresight to seek out the issues of tomorrow and solve them, or will they be doomed to repeat the mistakes of the past?"

Market insights manager Camille Schmidt said understanding Australia's shortcomings was an opportunity for New Zealand fund managers to avoid the pitfalls.

“There are also some key issues in the report that the New Zealand system has already addressed. You will note the commentary around inactive accounts, which remain a non-issue for KiwiSaver accounts, but continue to cause significant problems in the Australian market,” she said.

“We believe retail offerings in New Zealand are generally more competitive than Australia. We believe this has been achieved by more focused product offerings that intend to build scale. This has enabled more competitive pricing and avoided the challenge of legacy systems.”

Schmidt said one of the biggest problems for the super sector in Australia was legacy products, which are closed to new members but have the same features as products are open, with higher fee structures. “New Zealand doesn’t have that.”

New Zealand’s market was more streamlined in terms of the products being offered and there was a focus on building scale, she said.

But this country had the same problem of people being stuck in too-conservative default funds.

Tim Murphy, of Morningtar, said it was difficult to compare the two countries. "There's a different industry dynamic - there are pros and cons of each."

Tags: funds management Morningstar Royal Commission

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.45 4.69 4.89
ASB Bank Special - 4.05 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - ▼4.05 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
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 4.19 4.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.95 3.95 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.80 4.94 5.24
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 ▲4.19 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.05 4.29 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 4.05 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.29 4.49
The Co-operative Bank - Standard 5.75 4.00 4.79 4.99
TSB Bank 5.80 4.55 4.69 4.99
TSB Special - 4.05 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 3.99 4.29 4.59
Median 5.89 4.50 4.69 4.84

Last updated: 11 February 2019 10:01am

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