InvestNow is is about to launch a service where advisers can use the KiwiSaver scheme and it would recover fees for them.
Other KiwiSaver providers offer a similar service including Smartshares and Milford Asset Management.
InvestNow general manager Mike Heath says the fees would be set by agreement between the adviser and clients and could be up to 50 basis points of funds under management. The InvestNow KiwiSaver is one of two available which lets members build their own scheme. In InvestNow's proposition there are 33 options from 12 managers.
Heath says there is an on-boarding programme where advisers have to explain their fees, client service levels and what research to InvestNow.
There will also be a yearly review process to ensure advisers are providing advice and the agreed level of service.
While InvestNow is closing in on the $1 billion of funds under administration, its KiwiSaver proposition is sitting at around $30 million.
Heath says the overwhelming feedback from investors is that they want diversified growth funds from the well-known brands. Up to now InvestNow had funds from Pathfinder, Harbour Asset Management, Hunter Investment Management and Mint Asset Management.
It is now adding the Milford Active Growth Fund, the Fisher Funds Growth Fund and the Smartshares Growth Fund to its KiwiSaver scheme.
Heath says research showed investors wanted "specific brands" and "compelling retail brands.
He anticipates adding these three brands well propel growth of the InvestNow KiwiSaver scheme.
Smartshares and Vanguard have been standouts on the platform accounting for a significant amount of members and funds flow.
Heath says some recent commentary arguing KiwiSaver is flawed as its design restricts diversification by preventing members from joining more than one scheme is wrong.
"With us they can choose multiple managers at once,” he says.
Craigs Investment Partners also allows its KiwiSaver members to create their own fund from a menu of listed investments.
"InvestNow customers can self-manage investments, picking exactly what they want and need," Heath says.
Currently, 80% of InvestNow KiwiSaver customers invest into one of the many diversified growth funds on the platform.
There is no extra cost for InvestNow customers to spread their investments across multiple managers and/or funds. “It’s simple maths,” he said. “If a customer has invested equally in four funds for their KiwiSaver ie 25% each, and each one had a management fee of 1%, the total cost is still 1%.”
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