ASSET 126 - 2013

ISSUE 126

6th AL

THE ADVISER'S GUIDE TO

ANNUAVER KIWISRVEY SU

Which managers support IFAs?

Small market offers opportunities

Who owns your clients?

The underinsurance problem

100% committed to New Zealand financial advisers 0800 88 22 88

LEAD STORY

UP FRONT

14

04 EDITORIAL

KiwiSaver providers need independent advisers.

05 OPINION

Politicians should leave super well alone

10 NEWS FROM NEW ZEALAND 11 NEWS FROM AUSTRALIA

12

The adviser's guide to KiwiSaver

KiwiSaver is getting more New Zealanders saving for their retirements than ever before. But banks wield huge power in the market and it can be hard for independent advisers to carve out their niche. Philip Macalister looks at how the savings scheme is being distributed and how everyday Kiwi investors can get access to quality advice.

{SAM STANLEY: OPPORTUNITIES FOR NEW ZEALAND TO GRAB}

REGULARS

28 05

22

24

{OPEN TO QUESTION} { INVESTMENT }

{ INSURANCE }

{ ASSET ADVISER }

05 What do you think of the FMA's proposed reporting requirements?

24 Who really owns your clients?

28 Adviser burnout what you need to know.

22 AFA the KiwiSaver way 30 Independence pays off

03

UP FRONT

{ FROM THE EDITOR }

KiwiSaver managers need third-party adviser Scheme managers should use advisers instead of ignoring them ONE OF THE BIGGEST CHANGES to KiwiSaver this year has been around distribution and advice attached with the scheme.

In this issue of ASSET we present our annual survey of schemes based on their annual reports. Also this year we have surveyed all schemes asking a series of questions about which distribution channels they use.

This survey coincided with the consultation paper from the Code Committee which looked at whether there should be a new designation of adviser, between an RFA and AFA who is allowed to advice on KiwiSaver – a KFA as we called it.

Code Committee chairman David Ireland argues that there are just not enough advisers to deal with the two million people who are members of the scheme.

But that’s not really the problem.

There are two other issues which need addressing.

The main one is that very few KiwiSaver scheme managers are prepared to use third party, a.k.a independently-owned financial advice firms, to distribute their products.

Of those who do, some use AFAs only and others allow RFAs to offer the scheme under a class advice model.

This attitude from scheme providers harks back to the old days of tied agents.

There is no doubt the land grab that started when KiwiSaver was launched is in full swing. There is also little doubt the banks with their size, distribution force and access to customers are all-conquering.

The battle for advisers is a little like Custer’s Last Stand.

This attitude from scheme managers suggests that the issue is not the lack of advisers as the Code Committee tried to address, but the lack of willingness by providers to use advisers.

The second issue here is that the level of remuneration advisers can earn from KiwiSaver is so low many advisers are loath to get involved. We detail remuneration levels for sign-ups and trail commissions in our feature. They are not significant and this can be sheeted back to the original design of the scheme.

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There is no doubt the land grab that started when KiwiSaver was launched is in full swing. There is also little doubt the banks with their size, distribution force and access to customers are all conquering.

The Government Actuary at the time, David Benison, made it clear that paying fees was not acceptable.

However, to counter that, advisers who have built up significant funds under management with KiwiSaver are adding a good, regular income stream to their businesses.

The argument that advisers should do KiwiSaver work on a fee-based basis just isn’t something that will happen. You just have to look at the drivers which made people sign up in the first place – free money from the Government, tax breaks and employer contributions.

Members look at it as a bit of a gift horse and something they deserve, rather than something they should be going out and paying for advice.

Philip Macalister Publisher Correction In the Open to Question section of the last edition of ASSET, the photographs of Craig Pope and John Milner were switched. We apologise for the error.

HEAD OFFICE 1448A Hinemoa Street, Rotorua PO Box 2011, Rotorua P: 07 349 1920 F: 07 349 1926 E: editor @assetmagazine.co.nz PUBLISHER Philip Macalister EDITOR Susan Edmunds CONTRIBUTORS Bruce Cortesi, David Whyte, Amanda Morrall, Russell Hutchinson, Mike Moore.

DESIGN Jonathan Harding ADVERTISING SALES 07 349 1920 027 437 7527 SUBSCRIPTIONS Dianne Gordon P: 0800 345 675 E: subs@assetmagazine.co.nz ASSET is published by Tarawera Publishing Ltd (TPL). TPL also publishes online money management magazine Good Returns www.goodreturns.co.nz and The NZ Mortgage Mag All contents of ASSET magazine are copyright Tarawera Publishing Ltd. Any reproduction without prior written permission is strictly prohibited.

ISSN 1175-9585

OPINION

{ OPINION }

Politicians should back off super

After all, what do these people know when compared with the view expressed by someone in NZ, who is so vastly experienced and familiar with all aspects of a well-structured superannuation model?

Australia has somehow managed to accrue A$1,562,320,000,000 in super funds as at June 2013, and millions of Australian citizens have accrued substantial sums in their personal super accounts and can look forward to significantly comfortable retirement lifestyles.

{ DAVID WHYTE }

A

few years ago, while serving on the ISI (now FSC) Board, an Australian colleague recently arrived on our shores and appointed to the board, shared a view with me that on his arrival in the NZ market, he got the distinct impression that something was missing.

It was a superannuation industry.

Put simply, Australia has one – NZ does not.

In a recent trip to Britain and Australia, I was struck by the financial media’s close attention and in-depth reporting of all matters relevant to superannuation, ranging from investment vehicles, administration platforms, taxation, legislation, product providers, and distribution. In fact, all the input factors which comprise a vibrant, dynamic, and vital industry, and which makes an important contribution to industry, commerce, and consumers, in a progressive community.

Returning to New Zealand to learn that the Retirement Commissioner recommending lifting the age of retirement by two years is merely “trying to have people pay more and get less” was a shock.

After all, what has the Commissioner to gain by making such an outrageous suggestion? Forget that some pretty wellqualified authorities have made similar suggestions, and ignore similar moves overseas to seek sustainability of retirement income for aging populations in the OECD territories.

The further anomaly in NZ is the provision of retirement benefits to the richest and poorest members of the community Of course, the Australians – and others – long ago realised that government has little or no business in the provision of retirement income. Establishing private superannuation funds was, and still is, intended to shift the burden for the provision of retirement income away from the state and into the hands of private enterprise. Successive British governments tried various models, shapes, and combinations, but no British government has proved to be a successful, sustainable, and viable provider of long-term retirement income.

Now poking a stick at the PM for accusing the Retirement Commissioner of conspiracy to deprive consumers is bound to attract howls of derision from right-wing supporters and some academic theorists.

And I admit to not being a dedicated fan

of Friedman’s Chicago School of Economics or of unfettered free market capitalism – the United States government expropriating my AIG shares without compensation cured me of that view once and for all, thanks a bunch.

But levelling such accusations at the Retirement Commissioner truly beggars belief.

Apart from the complete lack of personal motive for making such a recommendation, the Retirement Commissioner’s position is entirely supportable and arguable, and to dismiss it without more appropriate and considered examination is entirely imprudent.

There are a number of countries coming to terms with the shifting demographics of their populations and making provision to extend the normal retirement age of their statefunded schemes. This is entirely logical as the current accepted age of 65 was set when average mortality – and therefore the length of time an individual would expect to call on the fund – was much less than it is now.

Of course, this only remains relevant if the retirement fund is preserved exclusively for the purpose of its establishment, i.e. providing retirement income. If, as New Zealand has embarked on, it is regarded as a home purchase vehicle or an emergency reserve fund in time of economic hardship, then the concept is forfeit.

There may be provision made in the event of a terminal illness, or for occupations which, by their nature, do not have a longterm earning prospect but apart from these circumstances, retirement accrual funds should not be accessed by beneficiaries until retirement age is reached.

More howls from the theorists about New Zealanders not liking their funds being “locked-in” – well, I don’t recall anyone asking about the introduction of GST specifically, so why should the terms and conditions of a private retirement benefit scheme be any different from the introduction and application of GST? The further anomaly in NZ is the provision of retirement benefits to the richest and poorest members of the community, irrespective of their financial circumstances.

Also, operating a “taxed-taxed-exempt” regime only ensures a growing proportion of the community will not be contributing to the tax take, placing a heavier burden on the remaining taxpayers. With a declining birth rate, and no certainty surrounding future immigration patterns, it seems to me that this government is deferring an issue for their successors to face up to at some undefined point in the future.

Keeping New Zealand financial advisers strong 0800 88 22 88 05

OPINION

OPEN TO QUESTION CAREY CHURCH

STEVE BARTON

GAVIN AUSTIN

WHAT DO YOU THINK OF THE REGULATORY REPORTING REGIME FOR AFAS AS PROPOSED BY THE INDUSTRY?

WHAT DO YOU THINK OF THE REGULATORY REPORTING REGIME FOR AFAS AS PROPOSED BY THE INDUSTRY?

WHAT DO YOU THINK OF THE REGULATORY REPORTING REGIME FOR AFAS AS PROPOSED BY THE INDUSTRY?

I don't have a problem answering relevant questions if they are clear and make sense, I understand the purpose, and it doesn't add significantly to my compliance duties.

The draft questions indicate that understanding how all the different AFAs operate and run their business in practice will be another steep learning curve. Based on the draft questions, I am not convinced that this will add value to the industry.

I agree with it to a certain degree. But they are treading on dangerous ground in terms of privacy issues with adviser income. No profession in New Zealand has to report their income to a statutory body as part of their mandatory reporting requirements, other than to the IRD. I think they’ve gone too far in that area but if would be interesting if they disclosed what bank advisers were making.

The FMA also seems to have a pretty high staff turnover. There’s too much private information there that could potentially be used for other purposes.

MONEYWORKS

WHAT ALTERNATIVES ARE THERE? Next year, and every five years after that, the FMA should do an extensive questionnaire of all AFAs. Give us plenty of notice, and six weeks to complete it. Give us the option to decline to answer, then use this information to draw a picture of the industry.

Then, based on this information, each year, do a “project” around a theme, which will take AFAs no more than 15 minutes to answer. One year ask questions on how and what fees we charge, another year, ask about our external research providers, another year, ask us about how we go about segmenting our clients.

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PASCOE BARTON

WHAT ALTERNATIVES ARE THERE? Is it a general survey, is it a make-work or is to try to see what’s going on? If it’s to see what’s going on, they should be able to do that with a representative audit.

This still leaves it open to advisers to be fictitious with the figures they put in there.

Advisers that would put in the fictitious figures are the ones they’re trying to catch out, anyway. If the FMA turned up here we could generate a report sample of the client returns and reports. It’s not difficult.

We could generate a set of accounts or look at previous years’ balance sheets.

ABC

They have to be able to get a better picture of the make-up of the industry and regular reporting is one way of doing it. Some of the information they want is going a little too far, especially around personal remuneration. I don’t think they have any legal direction to be able to go that far.

I don’t see how relevant to the FMA it would be. If an adviser is earning $40,000 and is happy and providing an appropriate level of service, what difference does it make? Those who are earning $400,000 have a larger client base and might have some other resources to help them earn that money. Some advisers are authorised and operate within the constraints of the code and some you wouldn’t say are running a professional business but they really enjoy what they do.

WHAT ALTERNATIVES ARE THERE? I would encourage advisers to make submissions. Some of this seems to overlap with the AML reporting requirements. The FMA should be looking to eliminate any duplication.

IN NEXT MONTH’S ASSET

Investing for income – what advisers need to know.

Which dispute resolution scheme best fits your business?

New Zealand’s AIA boss profiled, from boxing gloves to tangi cover.

07

UP FRONT

a new appointment email details { PEOPLE } Ifandyoua have picture to editor@goodreturns.co.nz

and in 2006 establishing a second company, Moorhouse Mortgages, is now the South Island Key Account Manager for TNP. Kirsty McAlpine has also joined TNP as an administration assistant. She has more than 15 years' of finance experience in New Zealand and the United Kingdom.

FROM INSURANCE TO BANK ROLE

Geoff Annals

ACCURO CEO RESIGNS Geoff Annals has taken over as chief executive of Accuro Health Insurance after the resignation of Bruce Morrison.

Annals had been a director for eight years, and chairman of the board for the past four years.

“This is a good news story," Morrison says. "I am proud and sad to be leaving

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Kirsty McAlpine

Accuro, but at the same time I can return to my home and my family knowing I have left Accuro in the best possible hands.”

FORMER NON-BANK LENDER JOINS TNP Louise Ledger, who founded the South Island’s first non-bank first tier mortgage company Global Home Loans in 2000,

Ross McEwan, a former managing director of First NZ Capital securities and chief executive of National Mutual Life Association of Australasia/AXA New Zealand started his new role at the helm of the Bank of Scotland this month.

He will be paid almost $2 million a year, as well as $667 million a year in lieu of a pension.

His career history includes 25 years in the New Zealand and Australian insurance and investment industries.

EVENTS MANAGER APPOINTED Fidelity Life has appointed Lisa Hill as its new events manager.

UP FRONT

mode when things need to be sorted”.

She has been in events management for more than 13 years.

She will be responsible for running all of the firm’s big events, including roadshows and conferences.

Fidelity Life CEO Milton Jennings says: "Our events and corporate sponsorship activity is a key element of how we engage with financial advisers and we are thrilled to have someone of Lisa's capability join our growing marketing team."

Investment product specialist Sean Butler has also moved into a marketing role with the company.

Lisa Hill

Hill started with the company this month. Before that, she had run her own events management company, Beautiful Events, which specialised in wedding planning.

She says she knows how to make things happen and can “roll into stealth

AMP RESHUFFLES LEADERSHIP ROLES AMP now has a chief actuary rather than outsourcing the work to Australia.

Greg Bird has been appointed to the role. He is responsible for all actuarial and pricing functions. He has more than 10 years’ financial services experience and has held a number of actuarial, finance, strategy and risk management

roles working in Australia, New Zealand, India and the UK. Blair Vernon is now Director of Advice and Sales. He has expertise across distribution, marketing and strategy and a deep understanding of the New Zealand financial services market, developed over more than 20 years in the sector. Before joining AMP in 2009, Vernon held a number of executive roles with Bank of New Zealand and the NAB Group and the National Bank of New Zealand. Vernon is responsible for sales, both direct to AMP customers and via AMP’s adviser networks.

Jeff Ruscoe is now chief customer officer. He started with AMP in 2002 and has held a number of roles including General Manager, Customer Services. As Chief Customer Officer, he is responsible for AMP's product and marketing teams and serving AMP's customers through its distribution channels. Ruscoe's career in financial services includes roles in strategy, sales, distribution and product at AMP and marketing and investment roles at the Medical Assurance Society and the Public Trust.

NZ Financial Services Group

Join a group that’s leading the way in helping Kiwis achieve their financial dreams Two of New Zealand’s leading groups; Allied Kiwi and Loan Market have merged to create one of the largest financial services companies in the country. Allied Kiwi’s advisers and Loan Market’s mortgage brokers work within a network of over 500 members that offers home loan, insurance and other financial services across New Zealand.

All advisers under the NZFS Group umbrella have exclusive access to MyCRM, our world-class sales and client management platform. It’s just one of the tools we offer that will make your business more efficient and give you the competitive advantage in the marketplace.

To find out more about a group that’s committed to making it easy for you to grow your business and to focus on your client’s needs contact us today.

To speak to one of the experienced NZFS Group team call 0508 87 87 88, email info@nzfsg.co.nz www.nzfsg.co.nz

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UP FRONT

{ NEWS FROM NEW ZEALAND }

How much research must advisers do on equities?

Advisers have a heavy workload keeping up to speed with the IPOs on New Zealand’s equity markets.

Chapman Tripp partner Roger Wallis said he could not remember another period quite like the one the market is currently experiencing. “With the strength of the products being made available and the interest in it.”

The Financial Markets Conduct Act will see a shift to shorter prospectuses to help investor understanding. But AFAs will still need to familiarise themselves with the supplementary information about offers, which will be available online.

Smaller deals on the secondary market were also being lapped up almost as fast as they could be produced, he said. “Advisers have had to get up to speed very quickly.”

Wallis said there was a risk that advisers would find they had so much paperwork to wade through, that it was not worth advising on equities products. Some would find their businesses could not continue as they were under new regulatory requirements. “Adviser models are under examination.”

Some would need to move to a fee-for-service model to justify the time it took them to thoroughly research each product.

KiwiSaver advice debate not necessarily over Although plans to allow nonAFA advisers to offer advice on KiwiSaver were scrapped, there may

be new opportunities to explore when the qualification is finalised.

The Code Committee, which administers the Code of Professional Conduct for Financial Advisers, has released a revised draft of a new version of the code. Several changes had been made to the initial version that was put out for public consultation, including the removal of the suggestion that nonAFA advisers be allowed to offer advice on the scheme via a KiwiSaver pathway.

Chairman David Ireland said: “In the end, with the arguments raised against it and the possible consequences, it was not something we felt comfortable pursuing at this point.”

The committee had decided instead that AFAs who have not completed the investment strand should be able to offer advice on the first-home withdrawal aspect of KiwiSaver.

He said the committee would look again at the KiwiSaver endorsement once it was formally part of the qualifications framework, and see what it involved.

further queries to Tate.

He said the work Mudford had done had been very valuable for the organisation. She had been focused on preparing the institute for a new direction, with a greater focus on the provision of professional career pathways for IFA members, he said.

The move was because Mudford wanted more professional development opportunities, he said. “I support her but it’s disappointing that she can’t do that with us. But there’s no ill feeling. We’ll start the process to look for a replacement.”

The next CEO’s job description would be slightly different, with a greater focus on member pathways.

Tate said the IFA would seek someone who wanted to stay three or four years in the job. He would not be putting his own hand up for the role.

Rodney Bourke-Shaw

Act penalties insufficient Penny Mudford

Tate hopes the next IFA boss lasts longer Institute of Financial Advisers president Nigel Tate says the resignation of his organisation’s chief executive after less than a year came as a surprise.

Penny Mudford announced she plans to stand down from her position at the end of the year, and said the move was for professional reasons.

She said it would be business as usual until the end of the year because she has a lot of projects still under way. She directed

A former FMA regulator says the fine handed to adviser Rodney BourkeShaw was not severe enough, but the Financial Advisers Disciplinary Committee had its hands tied.

Bourke-Shaw advised his clients to put their money in Ross Asset Management.

They lost millions and the FADC censured him for not disclosing his concerns about Ross. He gave up his AFA registration and was fined $4000.

Gavin Austin, who was a senior adviser in retail surveillance at the FMA, said the fine was too small.B ut he said there was nothing the FADC could do.

“The only way they could fine him was because he was in breach of the standard terms and conditions and did not comply with the Code.”

Keeping New Zealand financial advisers strong 0800 88 22 88 010

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UP FRONT

{ NEWS FROM AUSTRALIA } shares was improving, although fund managers still preferred to invest globally.

More than 70% thought Australian shares were fairly valued.

Investors warned off online insurance

Optimism lifts Australian investors and advisers are confident about the future, according to new data from Wealth Insights.

More than 300 financial planners and focus groups were consulted for the survey, which shows improving confidence among investors and a willingness to move out of cash and back into the market.

Managing director Vanessa McMahon said there had been a significant improvement over the past 12 months.

Nearly 75% of investors were telling advisers that they were somewhat confident or confident about the future.

Fund managers bullish about shares Australian funds managers have a bullish outlook on international and domestic shares, a survey by Russell Investments has shown.

It found that optimism about international and Australian

Wealth managers Centric Wealth has warned investors against getting their insurance online, because the complexity of their situations could mean claims are rejected.

Jon Pillemer said some of the group’s clients had bought life insurance without advice and had inadequate cover as a result.

"The solution is to purchase life insurance through a risk adviser who is going to focus on more than just the type of your policy and the level of cover," he said.

"By understanding your personal and financial circumstances, they will be able to assess how these will impact your insurance needs now and in the future.”

Australian regulators told to ease off small businesses Australia’s Productivity Commission says regulators could do more to reduce the compliance and enforcement burdens they impose on small businesses.

It said regulators should understand the effect their regulations had.

“A regulator's culture and attitude towards business can be as important as the content of the regulation itself.

There is still significant scope for improvement in the way regulators engage with small businesses,” said Commissioner Dr Warren Mundy.

Association questions Ombudsman Australia’s Association of Financial Advisers (AFAs) has questioned some of the basic operating procedures of that country’s Financial Ombudsman Service (FOS).

It says the service’s operations have reduced confidence in external dispute resolution providers.

In a submission to the independent review of FOS, the AFA highlighted a number of areas that were problematic.

In particular the AFA highlighted that complaints could be made at no-cost to consumers but financial services providers had to pay, even if they won the case, and that outcomes of cases were binding on financial services providers but not on complainants.

The association also stated that FOS is expected to provide assistance to complainants to draft their complaints — a service not offered to financial services providers — while providers had no avenue of appeal, even in the event where there was a clear error made in the judgement of a case.

The AFA also questioned the level of claims which could be settled by FOS, claiming the increased limit of $280,000 was well beyond the compensation powers of magistrates who were typically limited to award payments of $100,000.

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PROFILE

{ PROFILE }

S

Sam Stanley

NZX LEADER VIEWS SMALL MARKET AS KEY TO VISION Kiwi sacrifices London but returns home to find advantages in small market By: Susan Edmunds 012

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am Stanley may have found more space at home for his family when he returned to New Zealand from Britain but the size constraints in the sharemarket took some getting used to.

But he says identifying the opportunities that a small market offers is a key part of his vision for the NZX. Stanley returned to New Zealand in 2011, after more than 15 years in financial markets and front-office foreign exchange roles.

He and his wife owned a house in London but when their children, Louis and Rosa, reached 8 and 5 respectively, they decided it was time for a change. The options were to sell up and move to a house in the country in Britain or move home to New Zealand. Stanley admits the move to the Southern Hemisphere was a wrench. “It was extremely hard to do but we wanted the kids to grow up as Kiwis.”

Stanley joined the NZX as head of business strategy and sales. “I got an interview with Mark Weldon…There wasn’t really a position available but we were talking about the potential at NZX. The markets-type role suited both of us.”

Although what is being traded is quite different, many things were the same between the foreign exchange markets and his new role in equities, Stanley said.

He had more of a sales focus than an operational role – his experience in that environment appealed to the NZX – and his entrepreneurial skills transferred well.

“There’re a lot of similarities with the requirements in setting up something new.

You need to be a risk taker.”

Stanley can see a lot of synergies between his international experience and what is required of him now. He said NZX was keen on his experience in setting up new innovations. His experience as a trader also stood him in good stead, he said. “I understand the way traders and brokers operate because I was one myself.”

At first, he was surprised by the realities of the sharemarket’s size. “I didn’t quite understand the challenges the market has in being relatively small. London is by far the biggest in the world… it’s a lot more difficult to launch a new product over here because resources and people are stretched in many different ways.”

Fund managers and brokers have to work across many areas in New Zealand, he said, whereas in a larger market they could get away with specialising on a slither. “Here, people work pretty hard. They’re usually quite stretched. Some things have higher priority than others and quite often you’re competing with other initiatives because resources and people’s time are scarce.”

But Stanley says the small market also has its advantages. “You get to know everyone pretty well.”

PROFILE

Some commentators have raised concerns about the New Zealand sharemarket’s size making it incapable of dealing with the inflows that are expected as a result of KiwiSaver.

Stanley said it was not a problem for the market so much as an opportunity.

Businesses needed to be encouraged towards capital raising. “When you look at the listing of new companies on the NZX, it’s so necessary. There’s a lot capital there to be deployed, that’s looking for an investment home. When new companies come on to the market as an IPO, there’s money there to invest. There’s a big opportunity to grow the market and provide a home for that capital.”

But he said New Zealand should never expect to find a place for all of it.

“That’s absolutely fine. As a relatively smaller economy, you can’t expect that for every dollar in KiwiSaver, there will be an investment in New Zealand. Some will be invested here and some will go into global equity markets.”

Stanley said he had developed a close relationship with fund managers, working with different products the NZX was looking at launching.

“The vast majority are pretty skilled at what they do,” Stanley says. “The market is not that big but the quality of fund managers is decent. There’s high expertise in a lot of areas. There are certainly some aspects where fund managers don’t have so much experience as those overseas, such as in equity derivatives, but there’s a pretty good understanding of the local market. Better than offshore fund managers that have to cover many markets.”

Fund managers operating in New Zealand had to be multiskilled, he said. “I think overall New Zealand fund managers are punching above their weight compared with their

As a relatively smaller economy, you can’t expect that for every dollar in KiwiSaver, there will be an investment in New Zealand. global counterparts.”

Stanley said he mostly dealt with AFAs on exchange-traded funds (ETFs). He heads up SmartShares as well as SmartKiwi, FundSource and Market Data.

He said most advisers seemed to have a “decent feeling” for passive index trading investment. While awareness of ETFs was lagging countries behind such as Australia, Britain and the US, it was starting to grow. AFAs would also benefit a lot from the growth in KiwiSaver funds under management, he said.

“It’s a long game. It’s a difficult environment for them. Standards have been raised and a lot of cost has been introduced to the industry. Regulation is a good thing but it’s still difficult. But from the point of view that there’s all this money coming into the market from KiwiSaver, that should be a good opportunity for quality AFAs.” Advisers who told clients they would take 1% or 1.5% to manage a portfolio and give advice were probably better positioned than those who were remunerated by the provider, he said.

“And it’s not just AFAs. Investors need to get comfortable around paying for stuff.

It’s difficult for professionals in the industry to do a lot for nothing … chipping away for $30 a year on KiwiSaver. We need to move to a structure where retail investors feel comfortable paying a percentage for an expert. Standards have been raised.”

Being able to identify opportunities and look at things in different ways were a key part of the role. Stanley is getting ready to launch equity derivatives this year and says some sectors of the market will need to get up to speed on the opportunities there. “It’s a great tool for fund managers on the buy side to use. There’s a hard core of investment managers in the market who will use it and others will become more au fait with it down the track.”

He said fund managers could use derivatives as a hedging tool, or if they wanted to down weight quickly. “They can sell futures contracts rather than entering the market, selling stocks.”

Derivatives would also be useful for fund managers wanting to move large amounts between countries because it would eliminate problems of illiquidity. “If you have $100 million to move, it’s difficult to do that.

Futures are an efficient and cost effective way to do that.”

Others would use derivatives for arbitrage or speculation purposes, to enhance fund income.

More ETFs are also being launched.

A new fund will enter the market at the end of this year or early next.

Stanley hopes to return to Europe to work at some stage but says for now the NZX is a good place to be. “The diverse nature of the business means that I cover so many different products and get to meet great people within funds management.”

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COVER STORY

{ KIWISAVER }

Getting

KIWISAVER to the masses One of the biggest issues with KiwiSaver is how it is distributed, particularly the action of the banks, which are churning customers.

Philip Macalister looks at what is happening and which scheme managers are prepared to embrace independent financial advisers.

A

s part of our annual KiwiSaver survey we asked managers about their distribution using third-party channels, such as independent financial advisers.

The results are stark. Just 10 of the 31 manager formally use and remunerate financial advisers to distribute their products.

Several other managers said they were happy for advisers to use their products but they wouldn’t remunerate them for doing so.

While registered financial advisers can offer KiwiSaver to customers under class advice rules, firms such as NZ Funds and AMP will only let AFAs use their product.

The attitude of KiwiSaver managers to advisers is potentially a real hindrance to IFAs growing their business.

If you believe, as many people say, KiwiSaver is the key to the future prosperity of advisory firms, then KiwiSaver managers

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Undoubtedly one of the biggest issues in the market is the aggressive attitude banks are taking towards getting people to switch to bank-run schemes

are holding the development of the industry back.

Arguably the major change in this area over the past year has been ASB’s decision to close the FirstChoice fund to new business.

First Choice was the bank’s fund for advisers to use. In fact the large majority of the $209 million in the scheme and its 15,054 members came from advisers.

ASB general manager wealth and insurance Blair Turnbull said the main reasons for the move were cost and also the brand. He said it cost as much to run First Choice as it did to run the main fund.

And there was no reason to use a nonASB brand.

The bank hasn’t decided as yet when or whether it will combine the funds funds.

While it said “ASB no longer distributes KiwiSaver through third-party adviser channels”, Turnbull said it still supported

COVER STORY

advisers in principle.

“I would see KiwiSaver as a core of an AFA [business],” he says. The bank would welcome with “open arms” advisers who could demonstrate professionalism, trust and high standards to the bank.

But the focus has been on the ASB side of things this year. “We haven’t focussed too much on the AFA side…Our intention is to support AFAs.” Undoubtedly one of the biggest issues in the market is the aggressive attitude banks are taking towards getting people to switch to bank-run schemes.

The growth of BNZ’s fund shows how powerful they can be. It has gone from zero to more than $100 million in funds under management in the space of six months.

Considering the average balance in the fund is just over $4000, it it is a fair assumption to say that nearly all of its members have been

poached from other providers.

AMP managing director Jack Regan says it takes 30 seconds for a bank QFE member to get people to switch between KiwiSaver schemes and it takes AMP 30 minutes to get them back again as an adviser has to run through the risk profiling process on the phone with the KiwiSaver member.

Regan suggests banks are “mis-selling” by getting people to change schemes by telling members they can come to the bank and see their KiwiSaver balance online or on their bank statement.

He tells a story where one of AMP’s corporate superannuation clients had nine members switch to bank schemes on the premise they could easily access their balance.

But only one of these people realised they were switching schemes.

What is more worrying is that by switching

they lost their insurance cover, which came as part of the group scheme and also some employer and other contributions.

Regan says the banks’ actions are “not consistent with the regulated advice world we operate in”.

However, he also says it is not AMP’s job to take the matter up with the Financial Markets Authority.

“It is not our job to squeal,” he says. If the company did take that position it would just be accused of trying to protect its own commercial interests.

Only one of the big banks allows advisers to use its fund. That bank is ANZ. Its SIL Fund has been renamed in the past year to OneAnswer.

Whether ANZ will follow ASB’s position on funds is unclear, but many people we spoke to would not be surprised if it combined funds.

AMP, while not a bank, can almost be

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COVER STORY

{ KIWISAVER } KiwiSaver for IFAs FAs USED Yes

Yes

BROOK PROFESSIONAL KIWISAVER SCHEME

Yes

Yes

LAW RETIREMENT KIWISAVER SCHEME

Yes

Yes

0

0

FIDELITY KIWISAVER SCHEME

Yes

Yes

$30

25

GENERATE

Yes

Yes

Variable

25

FISHER FUNDS KIWISAVER SCHEME

Yes

Yes (see note)

ND

ND

TOWER KIWIPLAN

see Fisher

AMP

Yes

No

0

20

GROSVENOR KIWISAVER SCHEME

Yes

No

$30

50

NZ FUNDS KIWISAVER SCHEME

Yes

No

0

20

SIL/OneAnswer

Yes

No

0

15-25

CRAIGS INVESTMENT PARTNERS kiwiSTART DEFINED SCHEME

Yes

No

0

25

MILFORD KIWISAVER PLAN

Yes

No

0

0

SMARTSHARES KIWISAVER SCHEME

See comment

0

0

ANZ KIWISAVER SCHEME

No

na

na

na

OnePath

No

na

na

na

ASB KIWISAVER SCHEME

No

na

na

na

BNZ

No

na

na

na

SUPEREASY KIWISAVER SUPERANNUATION SCHEME

No

na

na

na

CRAIGS INVESTMENT PARTNERS kiwiSTART PERSONALISED SCHEME

No

na

na

na

FORSYTH BARR KIWISAVER SCHEME

No

na

na

na

KIWIBANK KIWISAVER SCHEME

No

na

na

na

GARETH MORGAN KIWISAVER SCHEME

No

na

na

na

MEDICAL ASSURANCE SOCIETY KIWISAVER PLAN

No

na

na

na

MERCER KIWISAVER SCHEME

No

na

na

na

LIFESTAGES KIWISAVER SCHEME

No

na

na

na

STAPLES RODWAY KIWISAVER SCHEME

No

na

na

na

SUPERLIFE KIWISAVER

No

na

na

na

WESTPAC KIWISAVER SCHEME

No

na

na

na

FIRSTCHOICE KIWISAVER SCHEME

No

na

na

na

classified as one because of its size and default status.

Only the AMP KiwiSaver Scheme is available and only AFAs and category one-accredited QFE advisers can distribute the scheme.

“We don't permit RFAs or Category 2 QFE advisers to distribute,” Regan said.

AMP has developed its in-house 360 team to service clients directly and it does offer online services, which have annoyed some advisers.

Regan says KiwiSaver is “profitless” and

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doesn’t think it makes a lot of sense for advisers unless they take a very long-term view.“KiwiSaver is profitless growth for you and us.”

He says there are question of sustainability around advice, but advice can be a good differentiator.

Overall, retention is fundamental to the success of the business.

Four Strategies

IFA distribution of KiwiSaver can be split into four categories

ND

ND 25 max

➊ Schemes that allow AFA-only distribution ➋ Schemes that also allow RFAs to sell their scheme under class advice

➌ Schemes that aren’t opposed to IFA distribution but won’t reward advisers with either a sign-up fee of trail commission (or both)

➍ Those that won’t allow any IFA distribution.

Newcomer to the market Generate Investment Management is primarily

x

COVER STORY

COMMENTS Remuneration depends on agreement. Either an initial sign up fee or ongoing trail commission, or both.

Not aware of RFAs using scheme, but would allow.

Only Mike Pero Mortgages RFAs.

AMP has developed its in-house 360 team to service clients directly and it does offer online services, which have annoyed some advisers.

Only AFAs and Category 1 accredited QFE advisers can distribute the scheme.

Upfront paid 12 months in arrears.

Trail varies depending on fund.

Some third party advisers offering KiwiSaver to their clients. Generally restricted to kiwiSTART Defined only.

Milford will let AFAs use fund but won't pay anything.

Active Growth Fund on AON platform No philosophical problem with RFAs or AFAs distributing.

No official agreements in place for trail commissions.

focused on distributing its product with RFAs using a class advice process as opposed to using AFAs. Henry Tongue says that an RFA has to go through a training and accreditation process which takes several hours. They have to sit a test and get 100% to pass.

The company has about 80 accredited advisers and is raining about five a week.

It has also reached agreements with most of the insurance dealer groups to sign up members.

Tongue describes what Generate is doing

The table shows that there are four approaches taken to IFA distribution of KiwiSaver. Most managers do not allow independent financial advisers to distribute their funds. A small group allow only AFAs to use their funds and another group allow RFAs to use their funds under a class advice model. Another group said they had no objection to third party distribution, but wouldn't pay for it. The only managers who refused to fully disclose information was Fisher Funds and AON.

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COVER STORY

{ KIWISAVER } as the same as what banks do.

“It’s successful and we are copying them.”

When a Generate customer needs advice, they are referred to an AFA at Generate or to an AFA whom the company has relationship with. However, the company is currently in the process of setting up its own QFE. Tongue says there is a choice of growing funds through advertising or supporting advisers. Generate would rather pay money to advisers in the form of commission than spend up big on advertising.

He says it’s a trust relationship and the company is better to encourage this through remunerating advisers.

The company will pay an 25 basis point trail commission and the sign-up fee is between $40 and $240 depending on whether the member is contributing and which income band they are in.

Another company that embraced RFA-distribution was Fidelity. As part of its TOWER Life deal, it sold its KiwiSaver scheme to Grosvenor. The two companies already worked together in life insurance, with Grosvenor using Fidelity policies for its TriMax offering and both only use advisers for product distribution.

Where they varied on KiwiSaver was that Grosvenor only used AFAs and the few people in its QFE to distribute its funds.

Fidelity primarily used RFAs and the class advice model.

“We’ve been quite pure to the model,” Grosvenor marketing manager Andrew Lendnal says.

But since it took over the Fidelity scheme in September, it now offers funds through RFAs under class advice.

Lendnal said Fidelity had developed a good accreditation process which was run past the Financial Markets Authority as part of the due diligence process.

Grosvenor managing director Allan Yeo says it runs a two-tiered remuneration model. Advises are paid a $30 sign-up fee, but the Grosvenor one is paid 12 months in arrears.

Yeo said that process was set up so it didn’t have to try and work out a clawback arrangement.

Grosvenor sales have a 50 basis point trail and Fidelity half that.

Yeo says Grosvenor is very focused on helping advisers with KiwiSaver and has developed a suite of tools to assist them.

This includes an online tool which produces a statement of advice and it also has some retention tools to help advisers keep clients when they are encouraged to switch to another scheme.

Yeo acknowledges the trail is higher than others offer but says the company is in a partnership with advisers. It is hard for advisers to have equity in a product and this was a way of giving them some “ownership”.

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{ JACK REGAN } There are question of sustainability around advice, but advice can be a good differentiator.

- Jack Regan

{ CARMEL FISHER } We haven’t found an absence or lack of AFAs is hindering us in KiwiSaver.

- Carmel Fisher

“KiwiSaver is a joint venture between us and advisers. We expect advisers to be proactive in servicing clients,” he says.

Grosvenor had about 580 accredited advisers but culled that number to about 300 when regulation kicked in. It has added another 400 advisers through the Fidelity acquisition, bringing the total to around 700.

One of the KiwiSaver managers with the biggest mix of distribution strategies is Fisher Funds.

While managing director Carmel Fisher refused to disclose the company’s remuneration levels, they are understood to be varied across the various books it has acquired in recently years including Huljich, TOWER, NZ Credit Unions and First NZ Capital.

ASSET understands Fisher Funds no longer pays trail commissions on former Huljich business.

Fisher describes what the company does as a multi-pronged approach to distribution.

This includes direct sales, sales managed by the firm’s staff, independent financial advisers and now bank distribution through its new shareholder TSB. She said they all worked and the company needed to have multiple touch points with customers.

It appears the main focus is direct sales. All Fisher Funds staff come under the company’s QFE and can talk to KiwiSaver members.

Fisher would not say how many of the firm’s staff were AFAs. However “we haven’t found an absence or lack of AFAs is hindering us in KiwiSaver”.

As part of the TOWER Investment deal, Fisher has access to the TOWER Financial Advisory Services (TFAS) advisers, who also sell Fidelity/TOWER insurance products.

She said TFAS advisers had not been very proactive in selling KiwiSaver but that was starting to change.

The company is active in direct marketing, especially online and using social media.

Although TSB acquired a stake in Fisher Funds, it still hadn’t finalised its distribution strategy. Currently TSB has no AFAs and Fisher Funds is training Fisher says there is a clear delineation in roles. “TSB don’t want to become investment advisers,” she says. “They need to stick to their core competencies.”

While Fisher uses independent financial advisers it hasn’t been a big focus for the firm.

“We haven’t been that active in trying to encourage independent advisers to sell our KiwiSaver… It’s not a priority,” Fisher said.

COVER STORY

Key KiwiSaver data ASSET Magazine's 6th annual KiwiSaver survey provides a good picture of how each scheme provider is doing in the market. The following graphs show average member balances and which schemes have been winning (and losing) the battle for members. Banks have been winners here, but overall Milford Asset Management has been winning on most counts. You can get hold of the full KiwiSaver survey from ASSET Magazine by calling 0800-345675 or emailing survey@kiwisaver.net.nz

➊

➋

➊ Average balances: The top 10 KiwiSaver providers are head and shoulders about the rest of the pack when it comes to average balances. The Top 10 split into two groups of five with the five biggest generally being managers who target professionals including Brook, Craigs Investment Partners and Medical Assurance. The other two in the top five are Milford Asset Management and SmartKiwi. These two managers have totally different strategies with Milford being an active manager with a big marketing budget and SmartKiwi using exchange traded funds and having next to no distribution or marketing budget.

At the other end of the scale Fisher Funds started off with having respectable average member balances in the year ending March 31, 2011 but now languishes as having the fourth lowest average member balance.

➌

➋ Transfer winners: Measuring transfers is a tricky subject as it can be done on members and dollars won or lost. In this graph we illustrate how the banks have clearly dominated the transfer market with five of the top six places dominated by banks. Again the standout performer is Milford Asset Management. The other two non-bank KiwiSaver providers who have done well are Fisher Funds and NZ Funds.

➌ Getting out of default: One of the two big issues for managers is getting members into funds which are appropriate to their risk profile. The other is around contribution rates.

In this graph we show how many members have been enrolled in default funds then moved to another provider.

Keeping New Zealand financial advisers strong 0800 88 22 88 019

SPECIAL REPORT

{ KIWISAVER } prepare a template Risk Assessment and Compliance Programme to assist nonaligned advisers. This saved advisers quite a large legal bill and made it easier for them to transition into the new AML world. We provide full training, compliance support, sales support and more. We know that non-aligned advisers are our distribution channel. Effectively we are business partners so anywhere we can help advisers - we will, because it allows us both to grow our businesses.

A.M: With over 50 KiwiSaver schemes already in the market, why start another?

H.T: There are two million people in KiwiSaver and another two million still to join, including one million more employees, so KiwiSaver is still in its infancy. The total number of schemes is around 50 but over 90% of all KiwiSaver funds are with 6 providers, so there is room for new schemes with new investment choices.

We did a lot of research and identified what we thought were two big gaps in what was being offered. Firstly, there was simply a lack of advice being given on KiwiSaver. Secondly, the majority of KiwiSaver schemes were offering a very similar investment product that was fairly vanilla, it was hard to tell them apart. We knew that if we could offer a high quality international investment product and go the extra mile to help AFA and RFA advisers successfully provide advice on KiwiSaver, then we could be competitive.

A.M: There has been a lot of discussion recently on the lack of advice being given on KiwiSaver and especially on RFA advisers giving advice. Do you think RFA’s giving advice on KiwiSaver will lower the standard of advice being provided?

H.T: KiwiSaver is not a complex product and giving advice on it should not be complex either. AFA’s are always going to be able to provide more indepth personalised advice on KiwiSaver and that definitely has its place.

I often hear the statement that when members have balances of $100,000 or more they need AFA personalised advice and I don’t argue with that statement. However, there is only a very small part of the KiwiSaver population with that type of balance.

AUT research shows only 10% of Kiwis have received advice and other surveys put that number closer to 20%. KiwiSaver is a long term retirement investment.

More people should be in growth funds as they are expected to outperform conservative funds in the long run.

When KiwiSaver was started six years ago the default funds were set up so Kiwis could get in and enjoy the benefits of KiwiSaver before they had to make a decision about

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which scheme to be in. Average KiwiSaver member balances are closing in on $10,000 so now is a good time to get some simple straight forward advice on KiwiSaver and make the next move.

We need RFA’s to give advice on KiwiSaver as there are simply not enough AFA’s in the country. RFA’s have the same obligations as AFA’s to provide care, diligence and skill when giving advice to their clients and Generate has access to AFA’s should an RFA’s client require personalised advice.

A.M: You mentioned that you are offering a high quality international investment product. How does that make you different from your competitors?

H.T: The majority of KiwiSaver schemes are offering similar investment products.

However when you look at what is offered in Australia, the US and UK, people can invest their superannuation in very high quality global fund managers. That’s what we do, we invest the equity part of our KiwiSaver scheme in global funds run by market leading investment managers who have outstanding track records over a long period of time. Names like Magellan Asset Management, Platinum Asset Management, T. Rowe Price and Berkshire Hathaway. Recent research

by FundSource on Generate highlighted that Generate gives KiwiSaver investors access to “many funds not previously available in KiwiSaver” and “international equity managers that have significant scale and resources and employ talented investment specialists around the world.

They have produced very robust long term track records of investment performance.”

Further Fundsource highlighted “the access to various international equity managers in different countries and sectors provides diversification benefits in a portfolio”.

A.M: You say that Generate will go the extra mile for advisors, what exactly does that mean?

H.T: As an example when AML came in to force in July, we used our lawyers to

A.M: You are a new scheme.

Why should advisers feel confident putting their clients with Generate?

H.T: One of the great things about KiwiSaver is that by law all KiwiSaver investments are held by a corporate trustee. That means client money doesn’t go to the scheme providers but instead is held in trust by one of about five corporate trustee’s. The scheme provider simply gives the trustee instructions on how to invest your clients KiwiSaver funds.

Generate uses Public Trust, which is the only corporate trustee owned by the New Zealand Government. In addition, we have a highly experienced investment committee chaired by one of New Zealand’s most successful fund managers – Warren Couillault - and we invest in market leading international equity managers.

A.M: Some media reported that you are a fund of hedge funds. Is this correct?

H.T: No our underlying funds are primarily equity long only funds with a minority of equity long and short funds.

Although equity long and short funds can be termed hedge funds, they have been around for a long time and are well understood. We think their ability to lower volatility and enhance risk-adjusted returns are well suited for long-term investment in KiwiSaver.

A.M: How do your fees compare to other providers?

H.T: Because we invest in underlying funds our fees are higher than the default funds. However, we strongly believe that investors should compare after fee returns and not just fees A.M: How have you been reaching out to advisors?

H.T: We have been working with the major dealer groups and through them getting in front of advisors whether it be at conferences, workshops or online videos.

We have built a lot of great relationships in a short space of time and we encourage any advisors who are interested in finding out more about the Generate KiwiSaver Scheme to get in touch with us on 0800 855 322 or info@generatekiwisaver.co.nz

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PAA NEWS

AFA the KiwiSaver way A tailored competency is required to enhance KiwiSaver advice to the public following the release of a Code of Conduct review. By: Bruce Cortessi

A

much debated topic at the recent PAA Roadshows was the recommendation by the Code Committee to create a specific KiwiSaver AFA designation.

This topic has been hotly debated since the release of the Code Committee Consultation Paper reviewing the Code of Professional Conduct for AFAs last month.

They have since backed away from this suggestion, and instead said AFAs who aren't investment qualified should be able to offer advice on the KiwiSaver first-home withdrawal option.

It is important when considering this issue that we look at it as financial advisers.

Yes, we must consider the effects on our industry as a whole, but more importantly what this would mean for consumers and the level of service we are able to provide them with.

The Code Committee felt that in order to enhance the accessibility of KiwiSaver advice to the public a tailored competency path was required. There is a large gap in the market, a group of customers who are receiving sub-par advice in this area – or worse, no advice at all.

Advisers who qualified would have been able to give personalised advice on KiwiSaver but not on other investment products, and would have been regulated as a full AFA. Obviously, every adviser is aware that the limitations of advice are determined by one’s Disclosure Statement and Scope of Service.

This proposed change came as a result of the 2012 survey carried out by the Code Committee, in which many AFAs expressed a want to be able to provide a simplified advice model to those clients who are carrying out simpler or lower value transactions, without the full compliance and fee scale associated with personalised advice or an investment planning service.

The current level of accessibility to KiwiSaver advice for New Zealanders is shocking. There are approximately two million active KiwiSaver accounts, and fewer than 2000 AFAs able to provide personalised advice on these products. A constant flow of people is signing up for KiwiSaver, youths in particular as they enter the workforce, and a clear need for these people to receive a better quality of advice in making one of the most important, and potentially first, major financial decisions of their life.

The initial opt-in to KiwiSaver could not be considered as complex advice. Yes, these accounts will grow substantially over the years and as this happens there will absolutely be a greater

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need for a full financial planning service which would be carried out by an AFA who has completed Set D, and whose Disclosure Statement and Scope of Service states that AFA is qualified to provide this service. Those who required a full financial planning service from the initial sign-up would seek the advice of an appropriate AFA who is able to provide this service as per their disclosure statement, as is the current practice.

The younger generation seek a simple and effective process in signing up for KiwiSaver and many are not willing

PAA NEWS

Let us put aside our egos and think about what is genuinely best for our industry and customers in the long term. to pay the fees associated with seeing an AFA. Many of those joining would not be aware that advice is available from places other than their bank or peers. When you consider the experience of a typical customer signing up to KiwiSaver there is a lack of advice. Many blindly make a scheme selection, or allow their banks to choose for them. Banks are selling these products to children, or to parents on their behalf, without making them fully aware of what it is they are signing up for. Many people have no idea of their scheme details, or any understanding of the terminology used. Is this really in their best interest?

The number of AFAs in New Zealand has changed very little since regulation came into effect – in fact, it is slightly down on previous years. Having a KiwiSaver specialist strand in the Level 5 Certificate in Financial Services would enable more RFAs to move into the AFA space – something we as an industry should be actively encouraging. The addition of a KiwiSaver is not intended to lower the professional standard of AFAs; it would be a means, however, of up-skilling many advisers, increasing customer confidence and allowing our industry as a whole to provide a better service.

In encouraging more advisers to step up to AFA status we are empowering the adviser

industry to embrace further education.

The added compliance requirements can be off-putting for some RFAs who see it as too much red tape. Many who have completed the qualification have, however, chosen to remain “un-Authorised” to avoid the added costs and regulation associated with reaching AFA status. In an industry which relies so heavily on continued training and education to remain relevant, advisers must continue to seek professional development opportunities and expand their knowledge base.

We do not believe that the introduction of a KiwiSaver-only AFA would result in loss of business to those AFAs specialising in investment, a concern expressed by some.

The customer base we are talking about are not your multi-million dollar asset holders, or those with vast portfolios (or any portfolio at all perhaps!) KiwiSaver advice should be accessible to all New Zealanders regardless of social standing or financial status. It is inappropriate for the industry to deny access to advice through a suitably qualified adviser based on the level of advice through adviser demarcation or "protection of one’s patch".

KiwiSaver for many people is the first and most important investment choice they will make, and will mark the beginning of their financial journey. These changes are about making this accessible, while lifting the profile of the financial adviser industry in New Zealand.

A key part of what the PAA aims to achieve is increasing public awareness of the financial adviser services available to them, and encouraging a more positive view of the industry. This is something that all involved in the financial adviser industry should be looking to achieve. There is already a lack of trust in financial advisers, and a lot of the publicity we receive is negative and based around those who have been deceptive, abused power and done wrong by clients. It is unfortunate that the actions of some have resulted in negative press for all. We now have the opportunity, however, to provide a great service to the public. It is time for our industry to create a positive buzz by providing the best possible services to our clients.

Let us put aside our egos and think about what is genuinely best for our industry and customers in the long term. In order to develop and maintain a dynamic industry for customers and build quality knowledge and expertise within ourselves we must continue to change and develop, and with more proposed changes to the structure of the Level 5 Certificate in the works it is likely that more issues like this will arise.

your business, your future, your choice

Independent thinking for advisers by advisers

• Advocacy at the highest level (Government) • New CPD portal, with structured learning capacity • Business training for advisers • PAA Friendly Guides for Advisers • ASSET magazine and Mortgage Mag (monthly) • Monthly newsletters, and industry updates • Industry conference in Auckland – May 16-17 2013 • Regional meeting programme • National Roadshows • Professional Indemnity Programme and Group Life Cover • Seven holiday homes And a dedicated team to assist you Website: www.paa.co.nz

Professsional Advisers Association Inc, PO Box 911 335, Victoria Street West, Auckland 1142 Phone: 0800 275 722, Fax: 0800 275 712 Email: admin@paa.co.nz

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INSURANCE

{ INSURANCE }

No one owns your clients – not even you In a time of great change, the full effect of regulation is like a rising tide, but excellent advice with bank channel advisers is always available

{ RUSSELL HUTCHINSON }

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INSURANCE

W

ho owns your clients?

If you answered "I do", you're wrong.

Obviously I’m not talking about your renewal commission – you may have great terms which mean you own your renewal commission. But language counts. You do not, in fact, own your clients. Even though you do, of course, understand that and claim that talking about client ownership is just casual industry jargon… right there is the problem. If you’ve put industry jargon ahead of the client then you have a problem.

Chris Gilchrist in UK’s Money-Marketing put it well when he wrote that, “Old-style advisers’ relationships with their clients did not extend past their value to the adviser.”

The trap is that if some advisers cannot see beyond the value that the client has to them, rather than the value they can offer the client, how can they meet code standard 1? So forget the idea of ownership, because it might infect your thinking about your business, and you can’t have that.

This is important, because right now is a time of great change. The full effect of regulation has not been felt, but it is like a rising tide, hard to spot with the naked eye but very, very strong. Added to that there are always environmental changes and a big issue for advisers is that banks have discovered that they can sell insurance.

There are some excellent bank advice channels, but the bank channel advisers need to concern themselves with most is the branch network.

In some ways the branch network is adapting to cope with exactly the same forces you may be grappling with in your business. The transactional business that branches used to do all the time has been shifting to ATMs and online for a long time.

Now the bank branch must have a much bigger role than handling the money.

Financial advisers moved out of collecting premiums several decades ago, and stepped up into offering advice.

However, a lot of that advice was still pretty transactional in nature. It was at the bottom end of the advice ladder: Getting quotes, helping clients with applications, understanding policy terms and choosing cover amounts.

As the banks are now moving into this space there are really only a few options – move up the advice ladder, retire, or join

I would like to see every adviser move up the advice ladder.

New Zealand needs plenty of financial advisers, and we have discovered that we don’t have enough. a bank. I would like to see every adviser move up the advice ladder. New Zealand needs plenty of financial advisers, and we have discovered that we don’t have enough. When I accidentally talk about work in detail with family, or friends, before their eyes inevitably glaze over, they sometimes suspect madness. They say you can hardly walk down the street without getting approached to take out a home loan or some insurance. Almost every haul of junk mail includes some financial services.

At least a third of all cold calling on the telephone seems to be in our territory. But the problem is that most of them don’t offer advice – all they offer is a product pitch or deal. They are all the equivalent of the folks that walk the suburbs on fine days trying to get you to switch power companies.

Of course a deal or a pitch can be great.

Some clients will like them. Some of them will be your clients. What’s wrong with it is that it is suited to high volume operations offering no advice, and their clients will stay with them so long as the deal is good – or move to grab the next good deal.

Until they need some proper advice.

Sooner or later, life serves up a problem too complex to be dealt with by the nice folks in the bank, or the calculators on the website, and the solution may involve bringing together different services from different companies in order to make it

work. Sometimes the problem takes the form of something that has happened because of one of those great deals the consumer took without thinking too much – terms they don’t like and find it hard to get out of, a declined claim, an unexpected price hike, or they read a newspaper article about how their insurance should connect to their trust, or they notice they have the wrong occupation class in the income protection and the bank actually won’t insure spray painters…

When they realise that they will stand there, almost dumbfounded blinking in the sun trying to make out the search results on their phone in the bright light of realisation that they have no idea who can offer them good advice. Or maybe they won’t realise that’s what they need and they will be talking to a friend about what a mess it all is and how unfair the outcome is and the friend will say “you need a good financial adviser, try mine, he’s great…”

You probably already offer a mixture: Some great financial advice when called for, and some transactional type of work when it isn’t. The challenge is to shift your whole business focus to finding the clients who need great advice and focusing your energy on them. All the others will just take up time and may end up bringing heartache, like a transactional client who complains later because they thought you should have given them better advice.

The mix is confusing, not just for clients, but for you. Focus is the magic that makes your business really work. The advice proposition needs to be worked out, and fundamentally it is an ongoing service.

That’s the difference between a long-term relationship of the trusted adviser and the transactional folk – whether there is any point meeting after the deal is done.

The work is definitely hard. You have to think about the advice triggers, the questions clients have, and what kinds of answers they need. You have to think about how to charge for advice, and what the processes will look like so that you aren’t burdened with unique work all the time – or maybe you are and you can charge appropriately for it.But it all needs to be worked out.

Once you have, though, you can smile at the counter staff as you do your banking because they will just be growing your future clients.

Keeping New Zealand financial advisers strong 0800 88 22 88 025

SPECIAL REPORT

{ INSURANCE }

AIA on a mission to break the cycle of under-insurance Three years into his insurance tenure, chief executive of AIA New Zealand, Wayne Besant, talks candidly about the cycle of under-insurance that plagues the industry and how to break it.

S

tep inside the boardroom at AIA and you will find it at the top of the Exco agenda. Pop into the Operations hub and you will see evidence of it in the business decisions being made. Take a seat in the staffroom and you will hear it in passing conversations. A belief that the cycle of under-insurance can be broken appears to have taken hold.

By all accounts, this is a far cry from the AIA of old and fighting talk from a key player in the New Zealand life insurance industry. Can it be done? "Absolutely," says Besant "and we have a mandate to do it. At around 2% of GDP, our insurance penetration remains one of the lowest in the OECD. Not to mention that each year there is not a lot of new business, and premium increases are primarily CPI and age-related. With the diversity of the New Zealand population now beginning to outgrow the range of our collective solutions and access points, as an industry we clearly have much more to gain than we have to lose."

Known for his optimism, Besant goes on

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to describe the silver lining that is available to anyone who really wants it. "From where I stand the market is wide open, both for insurers and advisers. With the changing face of New Zealand, we have more communities to reach than ever before.

New channels and products that provide entry points into the market will fuel rather than constrain traditional advice models.

And with technology there is still so much more we can do for existing customers.

It's exciting."

Nevertheless, the issue of underinsurance is not new and yet to be solved.

Besant is critical of the industry response to date which he says has largely focused on sizing the problem, pointing to existing product solutions and putting the ball back in the court of consumers. What will AIA do that is different?

"The one-size-fits-all approach won't work, our market is too diverse," says Besant. "Our focus is on engaging communities. We have already built strong connections and designed initiatives to support many under-served New Zealand communities - Asian and Maori

Advisers are critical to rebuilding the life insurance industry and we believe there's a big opportunity for both new and existing advisers to expand their reach into the New Zealand market.

SPECIAL REPORT

in particular. To develop the right solutions we must better understand the people we serve."

However, the adviser community today serves by far the broadest population in the market. Where do they fit in? "Advisers are critical to rebuilding and maintaining the life insurance industry and we believe there's a big opportunity for both new and existing advisers to expand their reach into the New Zealand market."

"For our part, we will actively support advisers who are looking to generate sustainable growth," Besant continues.

"They will get the best of everything we have to offer."

According to Chief Operating Officer, Steven Brunskill, what AIA has to offer is second-to-none. "Over the last two years, we have made an unprecedented level of investment into the technology that supports both advisers and customers and it’s just the beginning - we have many more exciting developments in the pipeline.

What's more, amongst a wider group of highly engaged people, we continue to have the best Underwriting and Claims

teams in the business.

We have organised our New Business area to ensure we can accelerate quality new business and deliver exceptional response times relative to market.�

Of course there's always a flip side.

Besant goes on to explain that advisers who blatantly churn business will be turned away. "We all know there is an unhealthy level of churn in the industry. That kind of business is ultimately costly for everyone the customer, the insurer and the adviser.

It perpetuates our low growth environment and is preventing the industry from moving forward. It does nothing for our industry.

We will play our part by focusing our efforts on sustainable business."

At last check AIA also had three complementary channels to its traditional Retail and Corporate Solutions adviser business. The Asian-focused AIA Financial Services Network and recently launched AIA Agency team aim to support both existing advisers and new agents to reach key demographic markets. In 2012, AIA also launched in partnership a direct Funeral plus Unveiling product with the

specific purpose of engaging traditionally under-served communities, such as Maori and Pasifika.

Although adamant these and more initiatives are necessary in order to connect with under-insured segments, Besant resolutely includes the traditional adviser community in the equation. "We already work with advisers who target these communities - in fact, they are some of our biggest contributors - but we would love to see more focus in this area. Whether primary or secondary opportunities, such as upsell, new-to-market business is a growth opportunity for everyone."

Having made several structural changes to the business over the last few years, AIA New Zealand is committed to its course. “It's about future-proofing our business and helping to build a sustainable industry, one step at a time," Besant concludes.

"Change is never easy, but our people believe in this because they know it's the right thing. We're under no illusions that the challenges are great - but the opportunities are greater."

Read more about Wayne Besant at http://executivecomms.com/articlewayne-besant/

027

PRACTICE MANAGEMENT

{ PRACTICE MANAGEMENT }

ADVISER BURN OUT Advisers struggle to navigate financial sea

{ MIKE MOORE }

Y

esterday I met with a client, a very experienced and competent risk adviser.

As part of a stream-lining process I asked him for details of his daily activity, the paperwork involved and how it impacted on income and profit.

After half an hour of explanation including copies of all the draft information

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and file notes etc, I felt very tired.

The volume of service work and compliance was impressive.

As part of our business we are finding that a large number of advisers are struggling out there. Not for the reasons you might think. It is just that the amount of time available to see clients and carry out all other parts of the client process

while maintaining enthusiasm and energy is getting increasingly harder.

Regular readers of our articles will note that we have a consistent approach on how to get the best out of your business.

I think that it is high time that we also talk about the survivability of being an adviser.

The average age is still pretty high and regrettably a lot of us in middle age are not

PRACTICE MANAGEMENT

Ask CCH

Body corporate unit size poser QUESTION:

As part of our business we are finding that a large number of advisers are struggling out there. Not for the reasons you might think. quite as energetic as when we first started out. Of course, it is a huge advantage that there is no time expiry on being an adviser.

When I started many years ago, I was an apprentice to an adviser who was 74 years old and still very productive. But smart people do learn how to pace themselves, so they can continue on with good health, good attitudes and brimming with enthusiasm.

Here are some suggestions that you may wish to apply to your own life, to ensure you survive and prosper: Why don’t you find out what it is ➊ that you and you alone can do and do more of that? As an adviser you carry out dozens of tasks every day, almost all of which cost you time and money and energy. On our website you will find a check list. If you open it you will find a whole list of daily activities that most of us do on a regular basis.

I was lucky enough to have time to take a deep breath after a long holiday and work out that almost all of the things that I did on a daily basis could be much more efficiently and cheaply done by somebody else.

I fell in love with the idea to the extent that I travelled to America to attend the Dan Sullivan course which teaches a philosophy of determining one’s unique ability and delegating everything else. The outcome of that is to either double or treble your income or if you prefer limit your working hours and energy so you can carry on well past the time that others have fallen by the way side.

Deal with the people you like. ➋ We do a lot of work with advisers in helping them streamline their customer base. Typically I invite then to select the 200 clients that they wish to carry on with into their later years and I sell the

rest to another adviser. This achieves the objective of being able to put more time into the clients that fit your profile and less time into clients who deserve better. They should be with an adviser who values them more than you do. It may seem a bit harsh but the spring in the step and the increase in vitality of those advisers who have followed this advice is apparent almost immediately. The other thing they find is they end up with many more clients who look like the top 200, because they have the time to really look after them.

As always, clients prefer people who look like and sound like themselves.

Income. Worrying about income ➌ is not only a huge problem for your clients; it is also the case for most advisers.

All the changes of the last few years have increased the cost of doing business as an adviser. The income, however, is either unchanged or even dropping. It is vital that you value your own advice and charge accordingly. Your clients are dependent on your process, procedures and ideas, and it is vital that you are around for the long haul to see them to fruition. It is probably a good idea to get a couple of people to sit on your "board" for your business and look at it from a purely business sense to make sure it is efficient and that resources are correctly allocated. You are certainly not doing clients any favours if you are not earning enough as an adviser to give them the full attention they deserve.

Stress less. The responsibility of being a good adviser requires you to transfer ➍ a lot of your direction and energy from yourself to your clients. I see so many people, particularly older advisers, who are simply getting worn down. It is absolutely vital that you take plenty of time off. Do not work six days a week and do have other interests outside the practice. I am sorry if I am starting to sound like a doctor but I find the very top people in our profession look after themselves so they can in turn look after their clients.

It is fair to say that there has been a 10-year gap in the development and recruitment of advisers. This has left a yawning gap between the bright eyed bushy tailed young things coming in and the hardened veterans on their way out. If we are to provide clients with the quality advice that will help them navigate their financial sea then it is important that those of us with a bit of white hair have good plans in place so that we can carry on well beyond superannuation date.

A block of seven residential units managed by a body corporate was destroyed in the Canterbury earthquakes.

One of the units was larger than the other six, which were of equal size and shared the same ownership interest (previously known as "unit entitlement" under the Unit Titles Act 1972).

Insurance premiums for the seven units were not calculated in terms of each dwelling’s ownership interest, which meant the premiums were invoiced disproportionately, possibly in error.

The insurer has paid out the proceeds of the insurance claim. The body corporate has not yet passed a special resolution to determine the application of insurance money, as allowed by s 136(4) of the Unit Titles Act 2010.

Should the insurance settlement be apportioned between the proprietors (i.e., unit owners): * In terms of their payment of the insurance premium, or * In terms of their ownership interest?

ANSWER:

It is assumed that all seven proprietors will resolve not to apply the insurance money to reinstate the unit title development and will resolve to cancel the unit plan.

It is likely that a court will distribute the insurance payout according to the existing ownership interests, unless a valuer can now properly reassess the post-earthquake value of the demolished units, taking into account market sales of the units, free of pressure, before the earthquake.

Cancellation of unit plan and decision not to reinstate unit title development Sections 177–189 of the Unit Titles Act contain the provisions relating to cancellation of unit plans. The body corporate has two options: • Apply to the Registrar of Lands for cancellation of the unit plan (s 177) • Ask the High Court to cancel the plan under the “just and equitable” criteria outlined in s 188.

On cancellation, the underlying fee simple (freehold) estate (or leasehold, as the case may be), including the common property, vests in the owners in the shares that their ownership interests bore to the development as a whole immediately prior to cancellation (ss 38(3) and 180).

The application for cancellation of the unit plan must be accompanied by a certificate from a registered valuer reassessing the ownership interests and proposed ownership interests (if any) of all the units in the unit title development (s 177(7)).

REFERENCE: Unit Titles Act 2010, ss 38, 136, 177–189, 210

Get fast answers to your everyday tax and legal questions...

The CCH Question and Answer service allows you to ask CCH Analysis everyday questions on tax, trusts and investments.

Be the one who has All the answers  s ubstitute your research time with income earning work  b uy yourself more time by having someone else to do the research  h ave peace of mind with the support of a second opinion  s ave consultant fees for simple queries  g et answers to your complex questions  k eep accurate records, as answers are provided in writing  e xtend your areas of expertise by having expert support in a variety of fields

Call CCH today to find out more on 0800 500 224 or go to www.cch.co.nz/qanda References: Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill.

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KIWISAVER

{ KIWISAVER }

Independence

pays off Charging for advice is no hurdle for advisers who are having to turn clients away.

BY: Amanda Morrall

Susanna Stuart

I

n a world of trailing commissions and cosy relationships with KiwiSaver providers, fund managers and insurers, Stuart and Carlyon has purchase with the paying public.

Devoid of the usual kickbacks that define the industry, the Auckland-based independent advisers are overrun with demand. So much so in fact, that they’re

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now in the enviable position of having to turn away clients.

“The public is craving the work that we provide but sadly there are so few of us around,’’ principal Susanna Stuart says.

It’s a high quality problem to be sure, all the more impressive for the fact that the firm (which bills at $300 an hour) doesn’t undertake any marketing. Stuart

says their unique status as an independent has turbocharged their referral base from solicitors and accountants who want to ensure their clients’ interests come first.

“We haven’t had time to even put in a marketing strategy we were rushed off our feet from day one. We’re in a very good space,’’ Stuart, author of books Your Family Fortune and Start Talking Sense, says.

Within the industry, number count of independent advisers is cloudy. According to a recent report prepared by financial journalist David Chaplin, of the 1895 authorised financial advisers currently registered, only 325 qualify as independent.

The vast majority are associated with banks and stockbroking firms, with AMP alone accounting for half of the AFAs. While the distinction between independents and those working to manage risk on behalf of their institutions may be lost on the general public, Stuart and Carlyon’s referees place a premium on it.

They in turn are loyal to that system of delivery taking on clients only who have been referred via accountants and solicitors.

Because of this referral system, the clients she and co-principal Deborah Carlyon (they also employ two “paraplanners”) take on are typically well established financially. Most seek guidance around inheritances, divorce settlements or investment gains.

“They’re usually at a crossroads of some kind in their life and they want to know what to do. For example, the kids have left home and are finished university or there’s been a death or divorce in the family.’’

Stuart and Carlyon pride their business on taking a more holistic approach than most to financial planning, taking what initially presents as a life stages problem and blending it into a long-term plan.

“We do have a much broader approach

KIWISAVER

than most,” Stuart says.

Part of that broad-brush, integrated approach means bringing in other experts where necessary and even helping clients with such things as basic as banking.

“When you are dealing with the whole client’s financial picture you get into all corners,” Stuart says. “I’m helping a client with a will right now and coordinating with their solicitor. In some cases, I will even go to the bank to sort out problems for a client.”

As good as business is now (she and Deborah have around 70 clients each on their books), Stuart bemoans the fact so few are willing to go the distance for their clients.

“I wish there were because there is such a market for a financial adviser who takes care of their clients, particularly as they reach retirement age.’’

Given the higher net worth of Stuart’s clients, KiwiSaver typically forms a modest part of projected retirement savings income.

As a consequence, discussions around KiwiSaver tend to centre on specific financial goals, for example earmarking the money for travel, major appliances or car upgrades.

“KiwiSaver is usually only a fraction of their overall mix of things they have to do to prepare for retirement. We’ll suggest people have their own investment strategy, whether that’s from a business, residential property, or a diversified investment portfolio. “ Before going into business with Carlyon in 2004, Stuart spent 11 years working for Pricewaterhouse Coopers. She says the experience helped to give her a deeper more balanced knowledge of financial issues affecting clients.

In her discussions with clients, many of whom are seeking to become financially independent before age 65, Stuart encourages them to think about how they want to live in old age and more specifically how much it will cost them before targeting returns.

“I get people to try to work out on Sorted.

We tend to look at what the client already has or owns in terms of the overall mix. We try to work with a client in terms of the discussion about risk org.nz how much capital they need to accumulate if they want to be financially independent. Once you can visualise that figure, then you can work backwards and figure how you’re going to make them up.

“We look at how much KiwiSaver is going to realise, how much the sale of the main home (if that’s the plan) is going to realise, etc., and map out a plan from there.’’

Knowing how much they’ll need to live off in retirement can be one of the trickiest calculations for clients,’’ Stuart says.

“We use an Australian retirement spending benchmark of A$56K for a comfortable retirement.”

The actual savings discipline and capital is less of a problem for most clients she sees.

“We tend to work with people who are financially motivated. They recognise the important of planning, and knowing where you are heading.’’

In her capacity as an adviser, Stuart helps to put in place the strategies necessary to take them there.

“We tend to look at what the client

already has or owns in terms of the overall mix. We try to work with a client in terms of the discussion about risk (risk profile) what they feel they can invest. We say, ‘This is the return that you have to get to meet your goals and this is the risk you have to take’.

Then if they aren’t prepared to take that risk we go back to the drawing board and look at the possibility of having less than they maybe wanted in retirement.”

While KiwiSaver is, for most of Stuart and Carlyon’s clients, a saving mechanism for capital expenditures, Stuart admits that for younger folk it will play an increasingly important role in retirement welfare.

“For younger people that’s their only means of accumulating savings because it’s locked in till 65.”

With her older clients who have multiple retirement assets outside of KiwiSaver, Stuart does income modeling with and without the New Zealand Superannuation.

Despite the current Government’s view that the NZS entitlements are not at risk, she’s not optimistic, even if it’s not a huge concern for her level of client.

In terms of advising clients and helping them to rate and evaluate KiwiSaver for themselves, Stuart worries about the lack of information which she suggests is “sadly lacking.’’

Morningstar is one of her main sources and she decries providers themselves for not being as open and transparent as they could be.

If improvements are to be made here or information to be gleaned, one gets the sense Stuart will battle on behalf of a client.

Little wonder, therefore, marketing is a superfluous part of Stuart and Carlyon’s business model.

“We really place the clients first. That’s always been our mantra. Everything we do is about the client and that’s the only way to be; to be professional and honest. We’re very fortunate that we didn’t get caught up in those rotten finance companies. We don’t promise huge phenomenal returns, we just want to meet the clients’ objectives and project their capital.”

ONWARD AND UPWARD

Considering your future?

For background details on our services go to www.mikemoore.co.nz or give me a call on

021 974 231 PO Box 47222 Ponsonby, Auckland 1144

P: 09 520 5131

F: 09 520 5141

www.mikemoore.co.nz

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ASSET ADVISER

{ MANAGED FUND PERFORMANCE TABLES } Name

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price %

New Zealand Insurance Fund Cash AMP KiwiSaver Cash Fund 1.3181 2.77 2.92 3.39 AMP Prem PSS OnePath NZ Cash 1.4223 2.87 3.07 3.31 AMP PSS Select Cash 1.3505 2.58 2.74 2.93 ANZ KiwiSaver-Cash 1.1727 2.85 3.02 3.02 Aon KiwiSaver OnePath Cash 13.7878 2.50 2.71 3.02 Aon KiwiSaver Tyndall Cash 12.6932 3.23 3.38 3.70 ASB KiwiSaver Scheme's NZ Cash 1.2656 2.95 2.65 2.93 Asteron Rtrmnt Savings Plan Deposit 9.8066 3.75 3.37 3.52 Asteron Super Yield Deposit Fund 9.8302 3.75 3.37 3.52 Asteron Superplan 2000 Capital Fund 2.0589 3.62 3.39 3.67 Asteron Superplan Capital Fund 2.4678 3.09 2.86 3.17 FC KiwiSaver Scheme's NZ Cash 1.2644 2.95 2.64 2.92 Grosvenor KiwiSaver Enhanced 1.3428 3.16 3.34 3.81 Income Fund Mercer KiwiSaver Cash -3.05 3.26 3.84 Mercer Super Trust KiwiSaver Cash -3.02 3.18 3.78 OnePath KiwiSaver-Cash Fund 1.2604 2.89 3.10 3.19 SIL 60s + Sup Cash Fund 1.9791 2.30 2.50 2.79 SIL Cash Plus 1.9791 2.30 2.50 2.79 OneAnswer KiwiSaver-Cash Fund 1.2227 2.69 2.88 2.82 Staples Rodway KiwiSaver Conservative -3.00 3.05 3.00 TOWER KiwiSaver Preservation 2538.45521 3.49 3.19 3.46 Westpac KiwiSaver-Cash Fund 1.2295 2.92 2.83 3.08 New Zealand Insurance Fund Cash Non-PIE Fidelity Life Cash Portfolio 3.0949 1.94 1.83 -New Zealand Insurance Fund Equity Region Asia Pacific Asteron Superplan 2000 Far East Fund 1.072 2.37 -4.06 -2.87 Asteron Superplan Far East Fund 1.572 1.58 -4.79 0.47 SIL 60s + Sup Pacific Basin Share 1.7258 3.79 1.15 3.68 SIL P/R Pacific Basin Fund 1.7258 3.79 1.15 3.68 New Zealand Insurance Fund Equity Region Australasia Aon KiwiSaver Milford 2.0741 22.19 15.90 -Asteron Superplan 2000 Trans Tasman 2.8156 24.39 13.30 9.89 Fund Asteron Superplan Trans Tasman Fund 3.6049 23.51 12.53 9.16 Grosvenor KiwiSaver Socially Responsible 1.2223 11.68 5.44 -Grosvenor KiwiSaver Trs-Tasm Sm 1.158 7.02 -0.45 -Coms Shr Mercer Super Trust KiwiSaver Shares -22.50 11.16 7.68 Mercer Super Trust KiwiSaver -26.48 15.00 9.94 TransTasman Milford Active Growth KiwiSaver 2.0737 22.57 16.02 14.87 NZ Guardian Trust GIFs - Small Companies 4.1144 25.32 7.86 9.82 OneAnswer KiwiSaver-Australasian Share 1.146 25.62 15.99 10.44 Smartshares Smartkiwi Growth Fund 0.92202 21.31 7.77 5.10 New Zealand Insurance Fund Equity Region Emerging Markets Asteron Superplan 2000 Emerging Mkt Fd 1.3603 -2.57 -3.58 2.48 Asteron Superplan Emerging Markets 1.135 -3.40 -4.34 1.71 Fund TOWER FreedomPlan-Emerging Markets 2.18695 3.15 -5.17 0.73 TOWER FuturePlan-Emerging Markets 2.18695 3.15 -5.17 0.73 New Zealand Insurance Fund Equity Region Europe Asteron Superplan 2000 European Fund 1.7873 26.95 8.94 4.07 Asteron Superplan European Fund 2.1256 26.12 8.16 3.34 New Zealand Insurance Fund Equity Region North America Asteron Superplan 2000 Nth Amrn Fd 1.6677 20.48 11.47 5.67 Asteron Superplan North American Fund 2.3879 19.62 10.70 4.93 New Zealand Insurance Fund Equity Region Australasia AMP Prem PSS OnePath NZ Shares 1.5991 23.47 15.09 10.54 New Zealand Insurance Fund Equity Region NZ Asteron Rtrmnt Savings Plan NZ Equity 2.66 24.74 13.16 10.21 Asteron Superplan 2000 NZ Shares Fund 2.2569 24.50 13.33 9.93 Asteron Superplan 2000 NZ Smaller 3.53 23.64 7.71 10.36 Compns Asteron Superplan NZ Shares Fund 2.0434 23.50 12.51 9.39 Asteron Superplan NZ Smaller Compns Fd 3.194 22.88 7.00 9.68 SIL 60s + Sup NZ Share Fund 3.6462 25.48 16.21 10.34 New Zealand Insurance Fund Equity Region NZ Non-PIE Fidelity Life NZ Shares Portfolio 4.3094 14.28 5.24 5.66 New Zealand Insurance Fund Equity Region World AMP Prem PSS FD Intl Share Fund 1 Value 0.8726 21.12 5.43 -0.35 AMP Prem PSS FD Intl Share Fund 0.9105 18.01 6.14 0.23 3 Growth Asteron Rtrmnt Savings Plan Intl Eqty 1.9245 22.76 8.17 3.49 Asteron Superplan 2000 Aggressive Fund 1.531 13.01 5.33 2.34 Asteron Superplan 2000 Global Fund 1.5686 21.55 7.78 2.92 Asteron Superplan Aggressive Fund 1.4557 12.22 4.68 1.68 Asteron Superplan Global Fund 1.8687 20.45 6.91 2.13

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60.76 4.79 2.09 153.05 3.01 1.20 250.02 3.65 5.23 3.77 28.67 8.69

-------------

16.00

--

10.39 2.06 1.54 1.51 1.54 19.06 17.33 22.27 196.53

----------

3.18

--

1.19 10.98 0.23 3.05

   

59.91  2.70



17.15   8.73 3.77



1.36



1.44



166.29  9.57  15.01  18.64  0.49

--

2.39

--

2.02 23.58

---

1.65 13.25

---

1.41 12.09

---

4.74



1.39 0.57

 

1.80



1.09  3.66  2.63  1.64



5.19



5.05



3.48 0.53 1.38 4.77 16.65

    

Name

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price %

FC KiwiSaver Scheme's Active High 1.0342 21.80 7.70 3.55 Growth FC KiwiSaver Scheme's Global Sustain 1.5021 25.48 9.56 8.88 Grosvenor KiwiSaver International Share 1.2177 19.98 5.75 -Mercer Super Trust KiwiSaver Global -20.72 9.40 6.41 NZ Guardian Trust GIFs - Global Equity 1.4159 22.38 8.62 3.39 SIL 60s + Sup International Share Fund 2.0675 21.98 8.68 5.46 SIL International Share 2.0675 21.98 8.68 5.46 OneAnswer KiwiSaver-Intl Share 1.0697 22.62 9.22 5.88 OneAnswer KiwiSaver-Sustainable 1.1166 15.98 5.03 2.44 Growth TOWER FreedomPlan - Int'l Companies 2.16765 16.65 7.14 4.75 TOWER FuturePlan - Intl Companies 2.16765 16.65 7.14 4.75 TOWER KiwiSaver Equity 2917.78596 17.80 7.99 5.57 New Zealand Insurance Fund Equity Region World Non-PIE Fidelity Life Aggressive 2.4398 11.82 0.38 2.79 Fidelity Life International 1.7712 15.68 2.31 1.50 New Zealand Insurance Fund Equity Sector Global - Real Estate Mercer Super Trust KiwiSaver Real Assets -12.21 9.16 4.18 OneAnswer KiwiSaver-Intl Property 0.9376 9.95 11.42 4.73 New Zealand Insurance Fund Equity Sector NZ - Real Estate MFL Property Fund 2.6374 14.39 14.12 9.21 OneAnswer KiwiSaver-Australasian Prpty 1.1416 11.02 14.39 8.28 New Zealand Insurance Fund Global Bond AMP Prem PSS Blackrock Global Fixed Int 1.6184 1.97 4.12 6.46 AMP Prem PSS PIMCO Global Fixed 1.8381 0.65 6.56 9.32 Interest AMP Prem PSS SSgA Global Fixed 1.6155 2.54 4.33 6.00 Int Index Asteron Rtrmnt Savings Plan Intl Fx Int 2.792 2.34 4.43 5.97 Asteron Superplan 2000 Global Bond Fund 2.5049 1.83 4.02 6.01 Asteron Superplan Global Bond Fund 2.3693 1.77 4.01 5.99 Mercer Super Trust KiwiSaver Fixed Intr -2.41 4.26 7.50 OneAnswer KiwiSaver-Intl Fxd Int 1.3931 1.13 4.00 5.89 New Zealand Insurance Fund Miscellaneous Fidelity KiwiSaver-Options Kiwi Fund 4.8371 8.74 6.14 6.24 Westpac KiwiSaver-Capital Protect Plan 1 1.5147 20.75 10.60 -Westpac KiwiSaver-Capital Protect Plan 2 1.3596 20.74 10.60 -New Zealand Insurance Fund Miscellaneous Non-PIE Fidelity Life Options Portfolio 3.8182 7.09 4.51 4.33 New Zealand Insurance Fund Mortgages Non-PIE Fidelity Life Mortgage 3.588 3.17 2.74 3.20 New Zealand Insurance Fund Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund 1.064 15.69 8.97 4.21 AMP PSS DynamicMkts Growth 1.3885 15.03 8.47 4.85 AMP PSS Select Growth 1.307 15.21 8.57 4.97 Aon KiwiSaver Russell Lifepoints 2045 5.6463 20.37 11.02 6.93 Brook Professional KiwiSaver Growth 1.3881 19.60 8.55 6.90 Fund Brook Professional KiwiSaver Growth 1.3881 19.60 8.55 6.90 Fund Fidelity KiwiSaver-Aggressive Kiwi Fund 3.298 14.90 6.56 5.87 Fisher Funds Growth KiwiSaver Fund 1.3696 20.79 8.27 11.19 Grosvenor KiwiSaver Geared Growth Fund 1.3292 15.04 5.30 -Grosvenor KiwiSaver High Growth Fund 1.0471 15.03 5.38 3.86 Mercer KiwiSaver High Growth -17.17 9.27 6.86 Mercer Super Trust KiwiSaver High -17.33 9.28 6.83 Growth TOWER FreedomPlan - Growth 2.09689 13.35 6.21 4.94 TOWER FuturePlan - Growth 2.09689 13.35 6.21 4.94 TOWER KiwiSaver Growth 1.20434 14.64 8.92 7.06 New Zealand Insurance Fund Multisector - Aggressive Non-PIE AMP PRP Dynamic 1.5941 14.76 6.89 2.34 New Zealand Insurance Fund Multisector - Balanced AMP KiwiSaver LS Balanced Fund 1.2258 10.78 7.63 5.36 AMP KiwiSaver LS Moderate Balanced 1.238 9.06 6.80 4.95 Fund AMP KiwiSaver TOWER Balanced Fund 1.2852 9.16 6.84 5.77 AMP PSS DynamicMkts Balanced 1.4765 10.10 7.06 5.48 AMP PSS Lifesteps Consolidation 1.4347 8.37 6.23 4.94 AMP PSS Lifesteps Progression 1.49 10.26 7.13 5.54 AMP PSS Select Balanced 1.4276 10.14 7.11 5.47 ANZ KiwiSaver-Balanced 1.2828 12.88 9.28 7.54 Aon KiwiSaver OnePath Balanced 17.8712 13.82 9.65 8.89 Aon KiwiSaver Russell Lifepoints 2025 6.3358 12.37 8.87 7.56 Aon KiwiSaver Russell Lifepoints Bal 6.181 14.99 9.57 7.74 ASB KiwiSaver Scheme's Balanced 1.2265 11.95 7.78 6.27 Asteron Rtrmnt Savings Plan Mgd Neutral 2.4037 13.83 8.45 5.99 Asteron Super Yield Managed Fund 12.1549 14.83 8.51 6.05 Asteron Superplan 2000 Balanced Fund 1.918 13.46 8.01 5.16

2.75



5.29 3.70 1.46 5.59 0.84 10.75 21.45

      

1.64



3.02  27.35  32.09  2.03  0.75  0.86 4.98

 

427.46  8.26  2.25



2.52  8.30



1.22 0.96 1.47 1.20 2.07

    

65.35 10.17 8.72

----

22.55

--

2.77

--

147.42  3.65  31.82  6.49  6.63  6.63  16.51  616.95  3.19  71.60  35.47  7.90  7.70  76.22  105.79  104.51



397.06



237.70



15.34  2.84  7.83  3.71  48.82  548.98  12.05  7.81  33.41  349.32  14.13  18.72  8.28 

Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % Asteron Superplan Balanced Fund 2.4699 12.53 7.13 4.41 61.38  Brook Professional KiwiSaver Balanced Fd 1.3369 14.16 6.48 5.26 1.89  Brook Professional KiwiSaver Balanced Fd 1.3369 14.16 6.48 5.26 1.89  FC KiwiSaver Scheme's Active Balanced 1.2098 12.72 6.99 6.14 24.86  Fidelity KiwiSaver-Balanced Kiwi Fund 6.737 9.52 5.96 5.80 102.80  Fidelity KiwiSaver-Ethical Kiwi 2.6405 14.98 8.11 6.12 10.67  FirstChoice KiwiSaver Scheme's Balanced 1.2239 11.95 7.77 6.34 24.31  Grosvenor KiwiSaver Balanced Fund 1.2737 7.15 5.12 5.18 104.39  Mercer Super Trust KiwiSaver Moderate -10.61 7.08 7.16 32.07  Milford KiwiSaver Balanced 1.3698 16.94 11.59 -- 22.14  OnePath KiwiSaver-Balanced 1.2292 10.77 8.49 7.00 16.26  OneAnswer KiwiSaver-Balanced 1.2957 12.97 9.33 7.70 234.58   Smartshares Smartkiwi Balanced Fund 1.08313 10.99 5.90 4.57 6.61 TOWER FreedomPlan - Balanced Fund 3.0034 8.91 6.29 5.30 11.89  TOWER FuturePlan - Balanced 3.0034 8.91 6.29 5.30 137.84  TOWER KiwiSaver Balanced 3538.53425 10.36 7.26 6.58 322.92  Westpac KiwiSaver-Balanced Fund 1.2364 11.75 8.43 7.14 494.37  Westpac Retirement Plan - Balanced Port 2.6814 10.38 7.10 5.53 92.77  New Zealand Insurance Fund Multisector - Balanced Non-PIE Fidelity Life Balanced 3.427 8.57 4.53 4.95 29.33  Fidelity Life Ethical Portfolio 2.4119 13.42 5.87 -- 0.59  New Zealand Insurance Fund Multisector - Conservative AMP KiwiSaver Default Fund 1.2892 5.56 4.74 4.28 1174.01  AMP PSS Select Income 1.5225 -0.18 3.76 5.26 2.89  ANZ KiwiSaver-Conservative 1.3095 5.79 6.07 6.02 287.15  Aon KiwiSaver Russell Lifepoints Cnsrv 7.1092 6.07 7.14 8.10 52.79  ASB KiwiSaver Scheme's Cnsrv (Default) 1.3349 4.95 5.06 5.53 1764.84  Fidelity KiwiSaver-Capital Guarant Kiwi 2.5366 4.53 4.32 4.36 36.26  FirstChoice KiwiSaver Scheme's Conserv 1.3327 4.95 5.05 5.55 82.11  Fisher Funds Conservative KiwiSaver Fund 1.2262 7.48 6.19 -- 201.82  Mercer KiwiSaver Conservative (Default) -6.73 5.82 6.86 715.56  OnePath KiwiSaver-Conservative (Default) 1.3232 5.23 6.13 6.22 684.38  OneAnswer KiwiSaver-Conservative 1.322 5.91 6.15 6.14 250.13  Smartshares Smartkiwi Conservative Fund 1.27677 8.32 5.54 4.35 2.88  TOWER FuturePlan - Capital Protected 1.1466 1.55 1.86 2.14 34.50  TOWER KiwiSaver Cash Enhanced 1.33447 4.96 5.57 5.42 467.12  (Default) New Zealand Insurance Fund Multisector - Conservative Non-PIE Fidelity Life Conservative 3.6811 4.84 4.10 4.84 36.42 -New Zealand Insurance Fund Multisector - Growth AMP KiwiSaver LS Growth Fund 1.1172 13.68 8.37 4.48 313.44  AMP KiwiSaver OnePath Balanced 1.3716 15.15 10.53 7.66 70.29  Plus Fund AMP KiwiSaver Tyndall Balanced Fund 1.2218 11.82 7.47 5.60 11.29  AMP PSS Lifesteps Growth 1.4021 13.05 7.96 5.02 1.21  ANZ KiwiSaver-Balanced Growth 1.2535 16.52 10.72 8.12 435.46  ANZ KiwiSaver-Growth 1.2171 20.09 12.14 8.64 809.47  Aon KiwiSaver Russell Lifepoints 2035 6.0035 16.55 10.01 7.30 6.89  Aon KiwiSaver Russell Lifepoints Growth 5.9544 18.77 10.65 7.47 12.53  Aon KiwiSaver Tyndall Balanced 12.5359 11.76 7.30 5.65 3.24  ASB KiwiSaver Scheme's Growth 1.1538 15.90 8.89 6.28 331.07  Asteron Rtrmnt Savings Plan Mgd Growth 2.3391 17.19 9.18 6.09 25.68  Asteron Superplan 2000 Dynamic Fund 1.8409 16.20 8.53 5.12 1.91  Asteron Superplan Dynamic Fund 2.1165 15.93 7.87 4.53 17.74  FC KiwiSaver Scheme's Active Growth 1.149 17.03 7.88 6.31 24.87  Fidelity KiwiSaver-Growth Kiwi Fund 6.4969 12.89 6.52 5.28 45.18  FirstChoice KiwiSaver Scheme's Growth 1.1509 15.90 8.88 6.28 20.28  Forsyth Barr KiwiSaver Balanced Port 1.1754 7.10 5.05 3.83 8.21   Forsyth Barr KiwiSaver Growth Portfolio 1.1091 10.34 5.76 3.37 7.32 Grosvenor KiwiSaver Balanced Growth 1.2023 10.52 5.20 -- 39.73  Mercer KiwiSaver Balanced -12.33 7.74 7.04 43.91  Mercer Super Trust KiwiSaver Active Bal -12.35 7.71 7.03 50.02  Mercer Super Trust KiwiSaver Growth -14.26 8.39 6.92 4.57  OnePath KiwiSaver-Balanced Growth 1.1819 13.91 9.70 7.36 18.28  OnePath KiwiSaver-Growth 1.1351 17.19 10.92 7.62 16.44  SIL 60s + Sup Balanced Fund 2.9442 15.03 10.13 7.71 18.27  SIL Balanced Plus 2.9442 15.03 10.13 7.71 74.13  OneAnswer KiwiSaver-Balanced Growth 1.268 16.58 10.83 8.31 216.27  OneAnswer KiwiSaver-Growth Fund 1.2287 20.18 12.21 8.81 154.09  Staples Rodway KiwiSaver Balanced -14.42 10.35 7.14 15.84  Staples Rodway KiwiSaver Growth -12.57 7.44 5.88 8.62  Westpac KiwiSaver-Growth Fund 1.2127 15.19 9.91 7.72 293.12  Westpac Retirement Plan - Dynamic Port 2.8895 13.90 8.86 6.20 95.53  New Zealand Insurance Fund Multisector - Growth Non-PIE Fidelity Life Growth 3.1445 11.73 4.60 4.36 9.90  New Zealand Insurance Fund Multisector - Moderate AMP KiwiSaver LS Conservative Fund 1.3796 5.06 5.41 5.52 154.93  AMP KiwiSaver LS Moderate Fund 1.2926 7.27 6.15 5.06 159.43  AMP PSS DynamicMkts Conservative 1.5205 4.16 4.68 4.91 0.79 

Name

ASSET ADVISER

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Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % AMP PSS Lifesteps Maturity 1.4499 4.26 4.72 4.93 2.70  AMP PSS Lifesteps Stability 1.4877 6.41 5.58 4.95 4.59  AMP PSS Select Conservative 1.5102 4.21 4.70 4.97 10.49  ANZ KiwiSaver-Conservative Balanced 1.3019 9.35 7.78 6.85 288.53  Aon KiwiSaver Russell Lifepoints 2015 6.7675 7.62 7.56 7.85 3.88  Aon KiwiSaver Russell Lifepoints Mod 6.7225 10.47 8.39 8.03 8.75  ASB KiwiSaver Scheme's Moderate 1.2916 7.97 6.42 5.99 478.32  Asteron Rtrmnt Savings Plan Mgd Conserv 2.4068 8.28 6.97 6.30 2.09  Asteron Superplan 2000 Conservative Fund 1.9704 7.70 6.54 5.60 2.33  Asteron Superplan Conservative Fund 2.2062 6.92 5.68 4.85 5.55  FC KiwiSaver Scheme's Active Cnsrv 1.3126 7.91 5.86 6.22 6.62  Fidelity KiwiSaver-Conservative Kiwi Fd 6.8318 6.00 5.72 5.71 44.16  FirstChoice KiwiSaver Scheme's 1.2814 7.96 6.40 5.97 19.37  Moderate Grosvenor KiwiSaver Conservative Fund 1.3182 2.89 5.05 5.50 36.29  Mercer Super Trust KiwiSaver Conserv -6.84 5.46 6.10 2.26  OnePath KiwiSaver-Conservative 1.28 7.90 7.35 6.65 5.78  Balanced OneAnswer KiwiSaver-Conservative Bal 1.3146 9.41 7.84 7.00 83.21  TOWER KiwiSaver Conservative 1.37788 5.96 5.97 6.23 74.26  Westpac KiwiSaver-Conservative Fund 1.2961 5.83 6.19 5.92 1071.38  New Zealand Insurance Fund NZ Bonds AMP Prem PSS OnePath NZ Fixed Interest 1.5582 -1.97 4.87 5.60 2.26  Asteron Rtrmnt Savings Plan NZ Fixed Int 2.6759 1.14 5.72 6.60 1.27  Asteron Superplan 2000 NZ Bond Fund 2.3161 0.61 5.28 5.78 1.60  Asteron Superplan NZ Bond Fund 2.9574 0.62 5.32 5.81 6.94  SIL 60s + Sup Capital Stable 2.4416 -2.10 4.40 4.84 4.07  OneAnswer KiwiSaver-NZ Fixed Interest 1.3594 -1.60 4.87 5.28 5.56  SIL NZ Fixed Interest 2.4416 -2.10 4.40 4.84 7.14  Westpac Retirement Plan - Accum Port 2.9344 0.48 2.44 3.32 21.13  New Zealand Insurance Fund NZ Bonds Non-PIE Fidelity Life NZ Fixed Interest 3.5018 1.75 3.34 3.99 0.55  New Zealand Insurance Fund Unlisted and Direct Property - NZ Asteron Rtrmnt Savings Plan NZ Property 3.3151 ---- 0.89 -Asteron Superplan 2000 Property Fund 1.7878 8.17 12.18 0.52 1.12 -Asteron Superplan Property Fund 1.5781 7.57 11.15 -0.49 1.72 -TOWER FreedomPlan - Property Fund 3.79675 14.98 6.21 4.89 0.99 -TOWER FuturePlan - Property 3.79675 14.98 6.21 4.89 7.86 -New Zealand Insurance Fund Unlisted and Direct Property - NZ Non-PIE Fidelity Life Property Portfolio 3.9327 11.79 9.75 6.75 0.71 -New Zealand OE Cash AMP Capital Cash Advantage Fund 1.28807 3.42 3.55 3.74 243.73 -AMP Capital NZ Cash Fund 1.59133 3.22 3.41 3.80 3306.35 -AMP Prem PUT OnePath NZ Cash 1.2617 2.77 2.94 3.21 4.60 -AMP PUT Select Cash 1.2173 2.51 2.68 2.85 3.89 -ASB Cash Fund -3.15 3.22 3.41 495.80 -Public Trust Cash Management Fund 1.2137 2.07 2.21 2.63 24.15 -TOWER Cash Fund 1.1844 2.47 2.51 2.87 27.12 -Westpac Cash Plus Trust 1.2297 3.06 3.13 3.32 57.73 -New Zealand OE Cash Non-PIE AMP UT NZ Cash 1.7166 1.79 1.83 2.48 2.01 -New Zealand OE Equity Region Asia Pacific Non-PIE AMP UT Asian Shares 1.416 14.32 2.60 4.37 1.37  New Zealand OE Equity Region Australasia AMP Capital Equity Opportunity 1.5574 16.35 13.19 11.99 26.53  Brook Alpha Fund 3.4348 28.62 8.36 8.51 14.91  Brook Tasman Fund 1.1808 29.07 12.90 10.99 7.40  Devon Alpha Fund 1.2313 22.68 9.44 -- 44.31  Devon Trans-Tasman Fund 2.7926 21.72 9.42 8.87 71.96  Harbour Australasian Equity 1.4118 28.97 14.14 -- 49.13  Milford Active Growth 2.0681 22.32 15.94 14.82 655.38  Milford Trans-Tasman 1.6486 23.26 16.06 14.78 188.95  Mint Australia NZ Active Equity 1.5632 32.40 18.07 13.82 12.44  OneAnswer SAC Equity Selection 1.6305 22.47 14.40 9.49 15.42  Blueprint Australasian Shares 1.228 ---- 28.43 -Pie Australasian Growth Fund 3.2541 36.40 30.51 35.71 51.88  Tyndall Aggressive Australasian Equity 1.2557 21.78 9.45 10.15 1.56  Tyndall Small Companies Fund 1.4529 25.07 8.31 -- 0.66  AMP Prem PUT OnePath NZ Shares 1.6225 23.69 15.13 10.54 2.51  New Zealand OE Equity Region Australia AMP Capital Australian Share Fund 2.08534 11.33 3.13 4.99 46.09  Devon Australian 1.138 17.24 4.35 -- 27.68  Fisher Funds Australian Growth Fund 2.72 17.56 5.65 12.45 77.87  Fisher Funds Premium Australian Fund 1.187 18.16 6.04 12.83 53.44  OneAnswer SAC Australian Share 3.5573 19.32 5.13 9.06 36.79  New Zealand OE Equity Region Australia Non-PIE AMP UT Australian Shares 2.256 10.52 2.17 3.32 1.82  New Zealand OE Equity Region NZ Name

Latest 1 Yr Transaction Return Exit Price % AMP Capital NZ Shares Fund 1.94937 20.06 AMP Capital Strategic NZ Shares Fund 1.73324 19.03 Brook Premium Share 1.3564 29.97 Fisher Funds NZ Growth Fund 4.9113 26.30 Fisher Funds Premium New Zealand Fund 1.1458 25.66 OneAnswer SAC NZ Share 2.8195 25.57 TOWER Trans Tasman Equity Trust 3.2986 17.53 Tyndall Core NZ Equity Fund 1.2493 25.51 New Zealand OE Equity Region NZ Non-PIE AMP UT NZ Shares 2.3152 18.74 New Zealand OE Equity Region World AMP Capital Core Global Shares Fund 0.8668 22.81 AMP Capital Core Hedged Global 0.9492 27.04 Shares Fd AMP Capital Emerging Markets Share 0.85058 7.03 AMP Capital Global Shares Fund 1.74602 23.37 AMP Capital Resp Invest Leaders Gl Sh 1.08162 21.51 AMP Prem PUT FD Intl Share Fund 1 Value 0.912 21.24 AMP Prem PUT FD Intl Share Fund 0.9387 18.00 3 Growth AMP Prem PUT SSgA Global Shares Index 1.1588 19.73 AMP Prem PUT SSgA Global Shares 1.4967 26.43 IndexHdg ASB EasyFund World Shares Fund 1.0091 19.40 Brook Walter Scott Global Share Fd 1.1875 16.92 Elevation Capital Value Fund 1.268 20.28 Fisher Funds International Growth Fund 1.2617 18.52 Fisher Funds Premium International Fund 1.2875 18.51 OneAnswer SAC International Share 1.2329 25.16 TOWER Global Fund 3.7116 19.29 New Zealand OE Equity Sector Global - Real Estate AMP Capital Global Propty Securities Fd 1.08549 13.72 ASB EasyFund Global Property Fund 0.9257 8.00 New Zealand OE Equity Sector NZ - Real Estate AMP Capital Listed Property Secs Fd 1.71822 9.55 ASB NZ Property Trust 1.0747 4.85 Mint Australia NZ Real Estate Investment 1.2077 11.55 OneAnswer SAC Property Securities 2.0163 10.74 New Zealand OE Global Bond AMP Capital Hdgd Gbl Fixed Intrst Fund 1.92733 2.50 AMP Prem PUT Blackrock Global Fixed Int 1.51 1.74 AMP Prem PUT PIMCO Global Fixed 1.8455 1.09 Interest AMP Prem PUT SSgA Global Fixed 1.5007 2.50 Int Index ASB EasyFund World Fixed Interest Trust 1.0083 0.03 TOWER BondPlus Fund 1.7568 0.79 New Zealand OE Miscellaneous Fisher Funds Property and Infrastructure 1.3891 15.34 Pathfinder Commodity Plus Fund 0.9664 -7.84 Tyndall Income Fund 1.1493 4.68 New Zealand OE Mortgages Westpac Home Loan Trust 1 2.30 Westpac Mortgage Investment Fund 1 2.38 New Zealand OE Mortgages Non-PIE AMP PMF - Mortgage Investment 152.1453 0.38 New Zealand OE Multisector - Aggressive AMP Capital Growth Fund 1.88675 14.32 AMP PUT DynamicMkts Growth 1.414 14.86 AMP PUT Select Growth 1.2532 14.98 Public Trust Growth Priority Fund 1.4968 16.55 New Zealand OE Multisector - Aggressive Non-PIE AMP UT Dynamic 1.6843 15.84 New Zealand OE Multisector - Balanced AMP Capital Balanced Fund 1.98201 10.83 AMP PUT DynamicMkts Balanced 1.4618 10.02 AMP PUT Select Balanced 1.378 9.98 ANZ Invmt Fds Balanced 1.2683 12.76 ASB EasyFund Balanced 1.1535 11.34 Milford Balanced 1.3668 16.81 Public Trust Balanced Fund 1.6845 9.98 Public Trust Balanced Growth Fund 1.4607 12.61 Public Trust Moderate Growth Fund 1.464 10.59 Westpac Active Balanced Trust 1.5813 11.84 New Zealand OE Multisector - Balanced Non-PIE AMP UT Balanced 1.8391 10.32 AMP UT Balanced - Other 1.5933 10.27 Name

3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 14.48 9.72 470.52  12.72 8.77 431.21  ---- 3.29 20.21 11.92 114.15  20.36 12.47 39.34  16.28 10.38 34.21  12.69 9.55 40.44  13.64 -- 7.79  11.47 6.81 7.24

2.68



3.66 332.97 

14.89 8.42 607.24  0.90 10.90 9.67 5.13

2.49 7.14 6.34 -0.44

92.86  164.46  25.96   2.16

5.97

0.16

1.76



7.13

2.41

2.77



14.57 8.09

4.37 

8.72 6.37 5.21 2.36 2.55 11.33 6.42

137.29  38.09  10.92  15.23  26.62  39.42  74.77 

4.44 --6.80 7.12 7.91 6.26

13.64 7.15 148.72  7.95 2.23 54.82  14.29 -- 18.31   6.58 -4.46 2.69 13.19 7.86 26.66  14.14 8.33 64.78  4.19 3.92

8.10 167.28  6.35 1.43 

6.66

9.36

3.06 

4.33

5.97

3.91

3.13 6.54

-- 21.37  8.40 156.40 



7.09 -- 13.16 -0.70 -- 42.48 6.39 7.53 4.69

----

2.32 2.40

2.65 118.09 2.69 227.59

---

-0.84 -0.34 4.63

--

8.81 8.41 8.47 9.56

5.33 4.99  4.87 3.16  4.85 11.88  7.61 8.10 

8.26

3.46

9.12



7.80 6.96 7.01 8.96 7.13 11.50 7.39 7.97 7.22 7.82

6.13 5.33 5.39 -5.70 -7.15 6.90 6.72 5.88

43.99 3.70 30.45 36.94 72.41 44.37 4.62 9.78 5.57 97.09

         

6.73 6.70

4.43 15.14  4.44 0.86 

Latest 1 Yr 3 Yr Transaction Return Return Exit Price % New Zealand OE Multisector - Conservative AMP PUT Select Income 1.4204 -0.27 3.73 ANZ Invmt Fds Conservative 1.2019 5.63 5.84 ASB EasyFund Defensive 1.282 4.33 4.42 Public Trust Defensive Fund 1.4699 4.03 4.89 New Zealand OE Multisector - Growth ANZ Invmt Fds Balanced Growth 1.3062 16.45 10.55 ANZ Invmt Fds Growth 1.3285 19.83 11.77 ASB EasyFund Growth 1.0738 15.24 8.17 Diversified Wealth Management Balanced 1.1089 4.12 -0.53 OneAnswer SAC Balanced 2.1009 15.10 10.34 Public Trust Capital Growth Fund 1.7129 14.38 8.83 TOWER Multi Sector Fund 2.4001 10.13 7.50 Westpac Active Growth Trust 1.4735 15.05 9.24 New Zealand OE Multisector - Growth Non-PIE AMP PMF - Active Growth 1.8535 9.02 4.43 AMP UT Legg Mason Balanced 1.4033 12.05 3.85 New Zealand OE Multisector - Moderate AMP Capital Conservative Fund NZ 1.96953 4.59 5.24 AMP PUT DynamicMkts Conservative 1.4807 4.13 4.63 AMP PUT Select Conservative 1.4891 4.20 4.67 ANZ Invmt Fds Conservative Balanced 1.2372 8.94 7.41 ASB EasyFund Conservative 1.2412 5.56 5.01 ASB EasyFund Moderate 1.2204 7.38 5.79 Brook Income 1.0638 11.37 -Milford Income 1.2696 15.46 13.18 Public Trust Conservative Fund 1.4681 8.08 6.43 Westpac Active Conservative Trust 1.5081 5.27 5.23 New Zealand OE Multisector - Moderate Non-PIE AMP PMF - Balanced 2.1747 6.29 3.96 AMP UT Conservative 1.8401 3.98 4.29 New Zealand OE NZ Bonds AMP Capital NZ Fixed Interest Fund 1.51671 -0.50 5.13 AMP Capital NZ Short Duration 1.19019 3.45 3.92 AMP Prem PUT OnePath NZ Fixed Interest 1.4577 -2.09 4.76 Harbour NZ Corporate Bond 1.0199 3.49 5.34 OneAnswer SAC NZ Fixed Interest 1.3703 -2.18 4.29 Public Trust NZ Bond Fund 1.6018 -2.17 4.01 Tyndall Corporate Bond Fund 1.0834 3.47 6.12 New Zealand OE NZ Bonds Non-PIE AMP UT NZ Fixed Interest 1.697 -1.24 3.07 New Zealand OE Unlisted and Direct Property - NZ AMP Capital NZ Property Fund 1.61143 11.26 6.43 New Zealand OE Unlisted and Direct Property - NZ Non-PIE AMP UT NZ Property 1.3455 10.20 5.66 Name

5 Yr Size Morningstar Rating Return $M Overall 5.16 4.41  -- 25.08  4.94 112.50  5.48 9.29  --5.52 3.55 7.85 7.49 6.43 6.41

58.39 14.89 18.81 21.03 32.70 3.83 11.35 43.36

       

4.29 17.39 3.86 1.75 5.55 4.87 4.94 -4.91 5.32 --6.18 4.65

 

13.96  1.42  14.65  35.32  270.18  105.32  -3.74 501.23  10.75  80.91 

4.16 35.11  4.39 0.90  7.14 4.54 5.49 -4.73 6.10 --

1556.83  139.96  2.37  111.80  7.36  2.64  117.28 

4.18

0.84 

--

235.43

--

-5.74 2.11

--

Returns are calculated to 31/05/13.

Returns are calculated before tax and after fees, except for the non-PIE categories, which are after tax and after fees. For more information about this table and the methodology behind the data, contact helpdesk.nz@ morningstar.com or go to www.morningstar.co.nz © 2012 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. To the extent that any of this information constitutes advice, it is not personalised and has been prepared by Morningstar Research Limited (a subsidiary of Morningstar, Inc.) without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant Investment Statement before making any decision to invest. Neither Morningstar nor Morningstar’s employees can provide you with personalised financial advice. To obtain advice tailored to your particular circumstances, please contact a professional financial adviser.

033

ASSET ADVISER

{ DATA } ASSET DATA - PIE FUNDS Institution

FROM DEPOSITRATES.CO.NZ

FundName

Min.

ANZ

Call Fund

$2,000

ASB Bank

Cash Fund

$500

BNZ

Cash PIE

Direct Broking Call Account

Rate.

30%

33%

2.60

2.67

2.79

3.11

3.12

3.26

$1,000

3.30

3.44

3.60

Call Account

$1

2.40

2.48

2.60

Heartland Bank

Call PIE

-

4.10

4.28

4.48

Kiwibank

PIE Online Call Fund - Base

$2,000

2.40

2.50

2.61

Kiwibank

PIE Online Call Fund - no withdrawals

$2,000

3.00

3.12

3.26

Nelson Building Society

Lifestages PIE

$10,000

3.75

3.90

4.08

RaboDirect

Cash Advantage Fund

$250

3.30

3.44

3.60

SBS Bank

Lifestages

$5,000

3.00

3.11

3.28

Spicers

Premium Plus

$5,000

2.75

2.85

2.98

TSB Bank

Cash Fund

-

3.75

3.90

4.07

Westpac

Online Bonus Saver PIE - (Potential Rate)

$500

4.00

4.18

4.37

Westpac

Online Bonus Saver PIE (base)

$500

0.10

0.10

0.11

Westpac

Online Saver PIE

$500

3.00

3.12

3.26

ANZ

Term Fund

$5,000

3.00

3.08

3.22

ASB Bank

Term Fund

$10,000

3.00

3.08

3.22

BNZ

Term PIE

$5,000

3.00

3.08

3.22

Kiwibank

Term Deposit Fund

$10,000

3.30

3.38

3.53

RaboDirect

Term Advantage Fund

$1,000

3.25

3.34

3.49

Westpac

Term PIE Fund

$10,000

3.00

3.09

3.22

BNZ

Term PIE

$5,000

3.50

3.58

3.75

Kiwibank

Term Deposit Fund

$10,000

3.30

3.38

3.53

Westpac

Term PIE Fund

$10,000

3.25

3.34

3.49

BNZ

Term PIE

$5,000

3.30

3.38

3.53

Kiwibank

Term Deposit Fund

$10,000

3.60

3.70

3.86

Westpac

Term PIE Fund

$10,000

3.25

3.34

3.49

ASB Bank

Term Fund

$10,000

3.75

3.85

4.02

BNZ

Term PIE

$5,000

3.80

3.97

4.14

Co-operative Bank

PIE Term Fund

$5,000

4.00

4.11

4.30

Kiwibank

Term Deposit Fund

$10,000

3.75

3.85

4.02

RaboDirect

Term Advantage Fund

$1,000

3.95

4.06

4.24

Westpac

Term PIE Fund

$10,000

3.75

3.86

4.03

ASB Bank

Term Fund

$10,000

4.00

4.18

4.37

BNZ

Term PIE

$5,000

3.80

3.97

4.14

Westpac

Term PIE Fund

$10,000

3.80

3.90

4.08

ASB Bank

Term Fund

$10,000

4.00

4.18

4.37

BNZ

Term PIE

$5,000

4.00

4.18

4.37

Heartland Bank

Term Deposit PIE

$1,000

4.35

4.54

4.74

Kiwibank

Term Deposit Fund

$10,000

4.10

4.20

4.41

RaboDirect

Term Advantage Fund

$1,000

4.10

4.20

4.41

Westpac

Term PIE Fund

$10,000

3.85

3.96

4.14

ASB Bank

Term Fund

$10,000

4.10

4.28

4.48

BNZ

Term PIE

$5,000

4.20

4.40

4.59

Westpac

Term PIE Fund

$10,000

4.10

4.20

4.39

ASB Bank

Term Fund

$10,000

4.20

4.40

4.59

BNZ

Term PIE

$5,000

4.40

4.60

4.81

Westpac

Term PIE Fund

$10,000

4.20

4.32

4.51

ASB Bank

Term Fund

$10,000

5.00

5.25

5.49

BNZ

Term PIE

$5,000

5.30

5.58

5.83

Cash Funds

TERM FUNDS - 90 days

TERM FUNDS 120 DAYS

TERM FUNDS - 150 days

TERM FUNDS - 6 months

TERM FUNDS - 9 months

TERM FUNDS - 12 months

TERM FUNDS - 18 months

TERM FUNDS - 24 months

TERM FUNDS - 5 years

034

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6th Annual

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