NOVEMBER 2015
KiwiSaver ROUND TABLE OUR EXPERTS DISCUSS GETTING ADVICE TO MEMBERS
What the industry said about FAA
Where do you find inspiration?
Marketing digital strategies
LEAD STORY
UP FRONT 04 EDITORIAL Advice proves its worth 07 OPINION 10 PEOPLE
14 KiwiSaver ROUND TABLE
New appointments
OUR EXPERTS DISCUSS GETTING ADVICE TO MEMBERS
What are the big issues facing KiwiSaver providers and members at the moment? How can the industry get New Zealanders to engage with financial advice on what might soon be one of their biggest financial assets? ASSET magazine assembled some of the industry’s main players to ponder the big questions.
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{DUSTY AND DY – CHALK AND CHEESE}
REGULARS
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{OPEN TO QUESTION} { INVESTMENT }
{ INSURANCE }
{ ASSET ADVISER }
06 Were clients worried by market volatility?
26 What to do about NTUs
24 Find your spark
30 How bossy should you be?
20 Industry calls for change
34 KiwiSaver data crunched
28 Digital marketing
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UP FRONT
{ FROM THE EDITOR }
KIWISAVER ADVICE DIFFERENCE BETWEEN A FRUGAL AND A COMFORTABLE RETIREMENT? money at the first sign of a market wobble. Not surprising, really. Those who stayed put have already been rewarded as markets ticked back up again. Savers who moved their money at the bottom have missed out on that recovery and done little apart from solidify their losses. But still there is no industry-wide move to encourage KiwiSaver members to seek advice. In fact, recent research showed the market share of adviser-distributed KiwiSaver funds was declining. Across the Ditch, we’ve seen evidence that superannuation investors left to take a DIY approach have portfolios that underperform those managed by a professional.
IF ANYONE NEEDED PROOF OF THE VALUE of financial advice to KiwiSaver clients, they got it just a couple of months ago. When the markets turned down in August and September, ANZ reported a big increase in the number of people moving from growth funds to more conservative options. Most were young people, aged under 35. Some may have moved because they are in KiwiSaver with the aim of buying a house and need their money in the near future. But a lot of these young people will have many decades ahead before they need to access their investments and are exactly the type of investors who should stay in riskier funds. ASB reported a similar experience. But ANZ said it had far fewer switches among clients with financial advisers.
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MARKET WOBBLE It seems those people who have a plan, know what their goals are and have someone to consult when they get worried are less likely to be spooked and move their
.G W OODRETURNS.CO.NZ
MORE ACCESSIBLE Why not take action in New Zealand to ensure something similar doesn’t happen here? Increasing development of bank mobile technology in particular means KiwiSaver accounts are more accessible than ever and makes it all the more important that people know what they are doing with theirs. It is hard for advisers to make KiwiSaver pay at the moment but that does not mean that obtaining advice to KiwiSaver members should be written off as too hard. KiwiSaver providers, the Commission for Financial Capability and adviser associations should be working together to develop a strategy to deliver information to those who need it, before they realise its importance. With thousands of dollars potentially at stake, we cannot afford to leave people floundering with little idea of how KiwiSaver even works – something with the potential to be their biggest asset. We talked to some of the big players in the KiwiSaver industry about their views on what could be done to improve. Susan Edmunds
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 SUBEDITOR Phil Campbell CONTRIBUTORS Mike Moore, Tony Vidler, Russell Hutchinson, PAA, David Whyte 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
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OPEN TO QUESTION
TRUMAN MACARTHY, FORSYTH BARR
DID YOU HAVE MANY CLIENTS GET IN TOUCH BECAUSE THEY WERE WORRIED BY THE SEPTEMBER MARKET VOLATILITY? I maintain a “high-touch” model with clients, which means a lot of work but has benefits which works well during periods of volatility. It is part of my objectives for people to have buy-in to their portfolios through involvement in the decision-making and making sure there is comfort with regular contact. Clients have also enjoyed strong returns for some time now which means they are generally very happy and able to accept some negative performance. For those who are just starting portfolios we have normally implemented a DCA approach so they have been able to access some cheaper assets.
WHAT DID YOU ADVISE THEM? There will always be the odd client who reads something and worries about their situation. They call and we recheck objectives and clarify what we have actually bought. We always discuss how volatility is normal, regular and important to managing money. I appreciate the fact they want to call and work through any issues.
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GRANT DAVIES,
HAMILTON HINDIN GREENE
DID YOU HAVE MANY CLIENTS GET IN TOUCH BECAUSE THEY WERE WORRIED BY THE SEPTEMBER MARKET VOLATILITY? I had a few panicked callers, but most clients understand that markets fluctuate from time to time.
WHAT DID YOU ADVISE THEM? Investors who panic when the market hits turbulence indicates they may not have their asset allocation correct. It’s important to have a well-diversified portfolio that includes bonds and defensive assets as well as the growth assets that many investors gravitate towards. Investors uncomfortable during the turbulence we saw through August and September should go back and reassess their risk profile to ensure their asset allocation correctly reflects their appetite for risk. Rates achievable in fixed interest instruments may not be as exciting, or as high, as the returns you can get in equities, but fixed interest performs a very important role of insulating a portfolio from downside if the market has a pull back. The turbulence we saw recently was a timely reminder of that, with the added benefit that the New Zealand market has more than recovered any losses from that period.
MICHAEL DOWLING,
STRATUS FINANCIAL SERVICES
DID YOU HAVE MANY CLIENTS GET IN TOUCH BECAUSE THEY WERE WORRIED BY THE SEPTEMBER MARKET VOLATILITY? No. The reason is that in our business the advisers have always been proactive. We went through the mid 1990s and 2000s and find keeping clients in touch with what is happening and increasing communication when things are going down means clients feel more reassured. Instead of just calling when the market moves up and you can tell them they’ve made money, in hard times we might step up from six-monthly calls to every three months.
OPINION
{ REGULATION }
DOESN’T APPLY TO ME Are financial advisers in for a reality check? On three counts, David Whyte thinks it’s a possibility.
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{ DAVID WHYTE }
ecent indications from a few reliable sources suggest that the status quo experienced by financial advisers is about to be upset even more than it was with the introduction of regulation
in 2010. This isn’t intended to be scaremongering or offering negative speculation, but more a suggestion that advisers conduct a reality check and start to think about a strategy that takes account of an evolving future. For some time now, many advisers have looked at the changes being brought about by legislative and regulatory initiatives and concluded that it doesn’t apply to them. On three fronts, I believe that may be about to change. Education: When the original legislation was drafted, NZQA level 5 qualification was on the cards for every financial adviser. The government of the day retreated from this stance, introduced the QFE structure, and determined adviser status by so-called product complexity. While the QFE category may well survive the current view – albeit with a different title, hopefully, for the benefit of consumers – the demarcation of adviser status based on the products used is unlikely to be retained. This has significant implications and the question arises – will the review favour reducing the educational requirements and standards, or will there be a move toward all financial advisers attaining a minimum level of educational standards in their chosen area of operation? As a clue, it should be noted that the Federal Government in Australia has recently accepted the recommendations of the Murray Inquiry that
The unavoidable impact of an evolving regulatory regime is the time, money and effort required to meet the demands of said regime made specific references to raising the minimum standards of education for financial advisers. Even the most complacent must realise that the education issue is likely to apply to them. Cost: The unavoidable impact of an evolving regulatory regime is the time, money and effort required to meet the demands of said regime. The natural response is to find ways to mitigate or share costs in order to maintain financial viability. Coupled with the current review of life insurance commissions, the clear implication is that advisers will seek collective structures and organisations to dilute the impact of increasing expenses. Such organisational structures will inevitably be the focus of the FMA's supervisory and monitoring resources. The regulator has clearly and unequivocally stated that “governance and culture” is a priority of their strategic risk management of the industry over the next three years and that they intend to be actively investigating those entities that appear on the Financial Services Provider Register. To quote from the FMA document ; “We expect boards and directors of financial services providers, both big and small, to set a strong tone at the top to ensure that customer outcomes are central to organisational strategy, culture, and conduct.” Those who see the collective model as a safe haven should consider whether the concept of governance is likely to apply to them. Those who are managing such organisations need to consider carefully whether it is
appropriate to attract members who do not believe governance and culture applies to them, and the impact that this denial is likely to have on the regulator’s view of their organisation. Disclosure: At the recent INFINZ Conference, Liam Mason from the FMA made references to the role of disclosure in the adviser/client relationship. His reference to client bias in decisionmaking goes to the heart of behavioural finance and economic theory. Indeed, the only aspect not mentioned is the influence of natural adviser bias in the relationship, which can also impact on the way either a risk or investment programme is a managed. But the significance to the regulator of addressing disclosure that is merely a data download couldn’t be clearer. The manner in which disclosure information is delivered will need to address the client’s particular preferences and behavioural biases. Specifically, the method of disclosure will need to be seen to provide an understanding to the client of the key aspects – and be able to demonstrate that this understanding is present. As part of the review process of the FAA, disclosure is likely to be required of all financial advisers. Still think “doesn’t apply to me” is an appropriate conclusion? If advisers are apprehensive about education, cost, and disclosure, it would be wise to review the current business model, as these issues are potentially the unavoidable outcomes of the developing regime and the current review process. But solutions are available; embarking on a modest level of research and investigation will provide access to a variety of products, tools, and online platforms addressing the key issues mentioned. The NZ financial services world is no doubt undergoing rapid, significant and critical change, but if it’s any comfort, this isn’t the first time such change has taken place on the planet. Hence, the presence of solutions, now available to NZ advisers, which have been developed and fine-tuned by those who have boldly gone where no one had gone before. David Whyte is managing director of consultancy firm DCW Management, amember of the FDR advisory council and a former director and chief executive of the Ginger Group.
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UP FRONT
{ NEWS FROM NEW ZEALAND }
More code changes planned
KiwiSaver hits negative returns
Changes being proposed to the Code of Conduct for Authorised Financial Advisers are fine-tuning to ensure it is fit for purpose, the chairman of the committee administering the code says. It was announced recently that the Code Committee is to start a formal consultation process on some changes it is considering. The code sets out the rules that AFAs must abide by, covering qualifications, conflicts of interest, CPD requirements and advice suitability. Committee chairman David Ireland said most changes were being made to recognise the new Level 5 certificate, the minimum qualification standard for AFAs. It will be set as the default and the code's alternative qualification scheme will recognise the old qualification for a period so that those advisers currently going through that qualification have time to complete it. The code also needed to be updated to address changes as a result of the Financial Markets Conduct Act coming into effect, he said.
KiwiSaver accounts took a hit for the first time in years in the September quarter. Morningstar’s data showed conservative funds were the only positive performer, with an average return of 0.2% over the three months. The aggressive category performed the worst, down 4.47%. Fisher Two was the top performer in the conservative category, as it benefited from exposure to direct property. Generate topped the moderate Category, which Morningstar said was because of its strong security selection. Milford was the best-performing balanced category as it dialled back its exposure to growth assets. AMP Nikko and Forsyth Barr did the best in the growth and aggressive categories because they had the most exposure to New Zealand equities. On a long-term basis, Aon Russell and ANZ topped most categories.
FundSource announces new partnership FundSource says it has entered a new strategic partnership to resume qualitative research. Darren Howlin, managing director of research at Australian unlisted managed funds service Research IP and former research manager at Lonsec, will conduct the research on FundSource’s behalf. He will research the NZ industry under the FundSource brand. FundSource will start to offer qualitative research reviews of New Zealand managed funds from next month and will be arranging fund manager visits. It was announced in April that FundSource was dropping its qualitative research functions and partnering with Financial Express to provide a new quantitative tool.
NZX head of markets Mark Peterson said that was providing reporting of investment data, software analytic tools and performance analysis. “We are confident this partnership will result in improved data analytics for FundSource clients, while providing access to global fund data, and better access to FundSource’s comprehensive historical database,” Peterson said. “As part of this partnership, FundSource will also make its Investor Hub and Analytics products available to clients. We will have more information on the products and pricing over the coming weeks.” NZX has hired Glen van Echten as the head of its Fundsource business and its product and sales manager.
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UP FRONT
{ NEWS FROM AUSTRALIA }
Systemic issues
TAL loadings on obesity
Peter Kell Australia’s financial advice sector could not write off high-profile problems as a case of a “few bad apples”, the Australian Securities and Investments Commission (ASIC) deputy chairman, Peter Kell, said. In an address, he told the Association of Financial Advisers conference the issues arose out of poor structures and poor advisers. "I think we'd all be kidding ourselves if we said the problems in the industry are just the result of a small number of bad apples,” Kell said. “I think there have been more systemic issues.” A major issue identified by ASIC was that organisations and people had not identified the poor advisers or reported them, and when they moved to a new organisation, no references indicated their past behaviour. Kell said ASIC expected organisations to act promptly to rectify problems. He also wanted firms to protect whistleblowers. More than 78,700 Australians have visited the online site with more than 62,200 searches completed. The majority of these searches have been for the name of a particular planner (32,100), followed by location searches (26,000) for someone accessible and local and speciality searches (3,600) where consumers are looking for a specific skill.
Life insurer TAL has changed its body mass index (BMI) calculation loadings to better reflect the risks involved in insuring obese people. General manager retail distribution Niall McConville said the industry had been accepting overweight customers at standard rates. “As an industry, we are continuously working towards long-term sustainability and there is an industry need to review what is classed as standard risks,” McConville said. “We believe in appropriately pricing risk, based on available evidence, to ensure our ability to pay claims in the future.” TAL reviewed the rapidly increasing prevalence of obesity in Australia and the subsequent need to price risk more accurately, he said. As a result, premium loadings will now be charged for overweight and obese customers who might have previously been accepted at standard rates across all benefit types. The BMI loading will increase with the rise of a customer's rating on the TAL BMI tables.
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ASSET UPDATA FRONT ADVISER
a new appointment email details { PEOPLE } Ifandyoua have picture to editor@goodreturns.co.nz
SOVEREIGN’S NEW DISTRIBUTION BOSS Sovereign has appointed a new chief distribution officer, who used to head one of Australia’s adviser associations. Richard Kilpin will lead the distribution team, which is responsible for the distribution of products to advisers, banks and corporate partners through New Zealand. Kilpin was most recently chief executive at Milennium 3, part of ANZ Wealth. There, he led one of Australia's biggest dealer groups, with 440 advisers in more than 290 practices. Before that, he was chief executive of the Australian Association of Financial Advisers.
announced soon. Director of markets oversight Garth Stanish has been made director of capital markets. The FMA said he would deliver an end-to-end contact point for capital markets participants and issuers. Simone Robbers, currently director of primary markets and investor resources, will be director of strategy and risk. "Robbers will lead another new function to provide senior leadership of the development of the FMA’s regulatory strategy and the coordination of that strategy with co-regulators and government agencies. This role also includes leadership of the FMA’s corporate risk management function." The new structure takes effect December 1.
She will be based in Sydney and will lead a team of 20 analysts. Holmes reports to Michael Holt, global head of equity research.
NEW SHARE ADVISERS Three advisers have joined the SHARE network. Two – Colin Thoms and Dryden Thomson – are based in Christchurch. In New Plymouth, AFA Alan Warden, a CFP and CLU, has also become a SHARE adviser.
FSCL BOARD MEMBER RE-SIGNS
John Berry
BERRY APPOINTED PUNAKAIKI DIRECTOR
Simone Robbers
FMA CHANGES EXEC TEAM FMA has revised its organisational structure. Nick Kynoch has been appointed general counsel, in an expanded role including litigation, enforcement, corporate legal, regulatory policy and governance of the FMA itself. Sarah Coleman has been appointed director of people and capability. A new communications director will be
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Carolyn Holmes
Pathfinder Asset Management cofounder John Berry has been appointed a director of the Punakaiki Fund. The fund invests in early-stage and emerging New Zealand internet, technology and design-led growth businesses. Berry has been appointed as a director alongside Mike Bennetts, chief executive of Z Energy, and Bryan Hutchins, director of Real Journeys. All three are shareholders in the fund.
MORNINGSTAR MAKES RESEARCH APPOINTMENT Morningstar has appointed Carolyn Holmes director of equity research for Australia and New Zealand.
Financial Services Complaints Ltd board member Bruce Cronin has accepted another two-year term. The FSCL board has resolved to limit board appointments to a maximum of three three-year terms for all members, which will be staggered to ensure continuity.
AMP CAPITAL APPOINTS PROPERTY BOSS AMP Capital has appointed Nick Cobham portfolio manager of the AMP Capital Property New Zealand portfolio. Cobham will be responsible for delivering the strategy, growth and investment performance of the portfolio, which includes a diversified portfolio of office, industrial, retail and development properties worth more than $1 billion. AMP Capital head of property funds management Chris Judd said Cobham would commence his new role in late November. Judd said he was delighted to welcome such a respected property professional to the AMP Capital Property business, which is experiencing significant global growth.
ASSET PROFILE DATA ADVISER
{ INVESTMENT }
Graham Duston
THE OLD FIRM: DUSTY AND DY
One of the enduring partnerships in the funds management industry has been that between Graham Duston and Derek Young. Philip Macalister catches up with them to hear their story.
D
usty is a familiar name to many of the financial planners who have been around the industry for a long time. While he started off life in the funds management world at National Mutual he has spent time with many of the leading firms during their heydays. Amongst the names on his CV are Armstrong Jones, ING, TOWER and ANZ. Added to that many of the people he has worked alongside are significant industry figures. Old-timers will know names like Peter Byrne, Paul Fyfe, Ralph Stewart and Anthony Quirk. Dusty has been out of the limelight, or more correctly the IFA circles, since he moved to Christchurch in 2002 to establish SBS Bank’s fund management arm Funds Administration New Zealand. If you have heard of the business it is more likely under the name FANZ. Thankfully, some may say, SBS is about to have a rebrand and the FANZ name will be replaced with something more marketable and aligned with the bank. Dusty and DY are chalk and cheese in many ways. The former fronts the business, does the marketing and is seen around the place. Meanwhile DY is in the back room making sure everything is running smoothly and keeping the cogs of the funds management business turning. It turns out that is a pretty big job and there are some fundamental lessons they have learnt along the way. Currently FANZ has 15,000 clients and $900 million in funds under management, counting the funds in its recent joint venture with Staples Rodway. The goal is to keep growing. Reaching the $1 billion mark “ will be a really nice moment,” Dusty says. But to get there Dusty and DY have to keep re-engineering the business. They both agree that re-engineering is a bit like servicing a car. There is a mileage, or in this case funds under management, figure which triggers change. In this business it is the $500 million, although that is changing a little because of the impact of KiwiSaver which is a more scalable business model. “If you don’t re-engineer and evolve them you will have issues down the track,” Dusty says. They both say that in funds management you never arrive at your destination. “The moment you think you have arrived you’ve made a mistake,” Dusty says.
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Derek Young
DY reckons: “It’s a bit like arrogance in sport. If you think you’ve won the game before you kick off you ended up with a Japanese situation [referring to how South Africa lost to Japan in the recent Rugby World Cup tournament].” Dusty says when he looks back over what has happened in the funds management industry in the past 25 years are the are plenty of examples where firms have disappeared because they haven’t evolved. “There’s been a bit of hubris and they have blown up,” he says.
RE-ENGINEER OF FALL APART Part of the current re-engineering at FANZ is the roll-out of its DIMS service Synergy which sees Dusty reappear in the IFA space again. Synergy is a joint-venture with Consillium, which offers a low-cost, compliant DIMS service. While DIMS was a regulatory response to the Ross Asset
ASSET PROFILE DATA ADVISER
Management Ponzi scheme, it will be good for consumers and makes advisers look at their business and segment their customer base, they say. “All advisory firms need to look at their offering for each particular market,” Dusty says. He says FANZ has done just that and will use Synergy for “mass market” clients with up to $250,000; the mass-affluent market of $250,000 to $1 million are serviced by FANZ’s Private Wealth division and over $1 million, the High Net Worth clients come under Staples Rodway.
GETTING A BREAK Both men got into the industry in similar ways, straight out of university. “Somebody gave me a break. It was as simple as that,” Dusty says. DY had graduated as a chartered accountant and was looking for a job. “A role as an auditor didn’t really appeal to me.” He was recruited into TOWER Trust Services which was run by Peter Baynes. Other notable people to join the firm then included Frank Jasper, now at Fisher Funds, and Cameron Watson, who is associated with Craigs Investment Partners. At that stage Young joined TOWER, Dusty was at Armstrong Jones, which was run by Paul Fyfe. Their lives and careers became intertwined as DY played tennis with Fyfe and later Dusty was recruited to TOWER by Ralph Stewart. Looking back to that period both agree it was the “Golden Era” for funds management and there were big personalities, fierce rivalries but underneath it was a desire to do what was right for the industry and clients. The two of them first met at an infamous financial planning conference in Fiji in 1994 which was organised by one of the predecessor organisations of the current IFA. Another thing they agree on is the industry has changed in the past 20 years and it doesn’t have the character of the past. “It’s certainly not that personality driven the way it used to be,” Dusty says. “Some may say that’s a good thing.” DY though suggests it may have become “too PC”. “Everything is much the same.” Nine years ago the partnership nearly came to an end when Dusty had a brain haemorrhage while swimming. He was lucky to survive the grade three haemorrhage where the mortality rate is 50%. But he learnt a few things about life, and life insurance. “When you have that experience you spend a lot of time to thinking when you are lying in hospital.” A question that occupied his mind was: “Is this what I want to do?” The answer was yes. “It was an affirmation for me. I was passionate about what I want to do.” Having the haemorrhage also gave him a different perspective on life. “You end up seeing the world in a richer colour.” When he gained consciousness and saw his wife Megan he said two things: “The first thing I said was ‘I love you, Megan’. The second was ‘get the policy documents’.” Megan was worried they would have to bring up their three young children with Dusty on a sickness benefit but he was well-insured. “I’m a great believer in insurance,” he says. Meanwhile when DY got to Christchurch to see his mate the first words were: “Prospectus. Prospectus. Prospectus.” FANZ was in the process of registering a new prospectus that needed director sign-offs otherwise they would be out of the market. So off DY went collecting signatures. While Dusty and DY seem like an odd couple sometimes they work well as a team for a couple of reasons. One is that they have a complementary set of skills. “We are not always in agreement with each other,” DY says. “But we tend to arrive at some conclusion, but come at it from a different perspective.”
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LEAD STORY
{ KIWISAVER }
KiwiSaver's
ADVICE PROBLEM ASSET magazine assembled some of New Zealand's KiwiSaver experts to discuss how KiwiSaver members could be encouraged to engage with the scheme.
LEAD YROTS STORY DAEL
Participants: John Body, ANZ Wealth; Blair Vernon, AMP; David Beattie, Grosvenor Financial Services; David Boyle, Commission for Financial Capability; Henry Tongue, Generate KiwiSaver; Jonathan Beale, ASB; and Richard James, NZ Funds.
WHERE DO YOU SEE THE KIWISAVER MARKET AT THE MOMENT? John Body: Obviously the membership numbers we have got and the rate of growth of KiwiSaver is good, but it is not yet a working retirement-saving solution for New Zealanders. That’s because of things like contribution rates, and also some of the challenges around the changes that have been made to it over recent years; which dented the confidence in KiwiSaver. Blair Vernon: I think it's a great component of a retirement-savings strategy. We don’t have the whole piece in play, though, and I think the biggest challenge is that there is a community apathy about retirement preparation. How do you solve the nearly 40 % non-participation?. It probably doesn’t worry Treasury, because they’re saving a whole bunch on MTCs, even at a reduced rate. My worry is the number of people who are in KiwiSaver, even contributing at low levels, but somehow equate that to what I call the “Chocolate Box Retirement”- the beach house somewhere at Pauanui, or whatever else, and they think they’re going to get there because they signed up for this thing called KiwiSaver. The reality is, even at three plus three, that ain’t going to probably get them there. David Beattie: When you look at trying to put yourself in a reasonably good space at retirement, you have just got to start saving early. We have seen that there isn’t enough saving going on with too many of the KiwiSaver members at the moment, and now with the kickstart having been reduced, the rate of younger enrolments has just completely fallen away. David Boyle: KiwiSaver members invest in very conservative product; a very low kind of correlation to growth assets compared to income assets … everyone around this table would also suggest that getting the right fund would be probably one of the most important decisions that will help New Zealanders’ financial wellbeing. Henry Tongue: The super fund is 80% growth assets, and KiwiSaver is 55% income assets. We put everybody into default funds, and that is how KiwiSaver has grown. I think the real challenge we face in industry, is getting out in front of Kiwis and explaining the differences between contribution rates and how that affects your long-term chocolate box retirement, and also the right fund choice, because that is going to make a massive difference. We move $30, $50, $100 billion from 55% income to 80% growth and you’re going to see a huge gain to the populous. Jonathan Beale: One thing I haven’t seen change that much over the last seven or eight years is people’s engagement. When I was in the UK I contributed to my pension funds because there was a tax incentive to do it. It made me want to do it; it made me want to contribute and
"Getting the
right fund would probably be one of the most important decisions that will help New Zealanders’ financial wellbeing." -David Boyle
I got a good retirement at the end. Richard James: The critical thing is that it's a workplace saving scheme, and if you look globally, employers play a significant role in helping individuals to address that. I don’t think individuals are going to address it on their own, and their most trusted source is their employer and the most influential source is their employer. I think the critical thing for phase two is trying to enrol their employer in that responsibility as well.
DO YOU THINK WE’RE GETTING TO A POINT WHERE PEOPLE’S ASSET IS GETTING BIG ENOUGH THAT THEY ARE ACTUALLY ASKING FOR HELP? Beattie: If I needed any more evidence I got it in August, when the markets for the first time since KiwiSaver started had a decent setback. Admittedly they have bounced back a bit again. We have only got 40 staff in our business and they all enrolled in our scheme obviously – by choice. I’m their nominated internal adviser, just to give them a bit of a hand all through the process. They have left me alone and they have never really asked me any questions for seven years. Three of them wanted to talk to me one-on-one during August because they had checked their balances
and they had lost $2,000 of cash as far as they were concerned. Immediately there’s people there who needed some help, and they were just a sample of three out of 40. Boyle: The big fear is once they see the value go down, the first thing they would think is someone has taken some of their money, because it's never gone down because of the contributions that have been going in. But also, if they did realise that loss at the bottom, the time to draw it back if they went into something more conservative would put back years of savings. Beale: You can fund-switch any time you like on ASB KiwiSaver digitally. The day the markets went down, everyone wakes up in the morning and, “Oh, the markets have gone down.” That day 241 people switched to cash. Boyle: It's tough enough for a KiwiSaver member to know what they’re invested in, let alone what impacts of the market will have. But they’re getting a bit of a real-life picture now. I guess, coming back to your fundamental question, this is where advice, or at least access to great-quality information to help mitigate those changes, it’s just got to be so important to work in. Body: Every financial event in the history of mankind has been on the front page of the newspaper, so that is not going to change. The issue is when our members are in a fund and they don’t understand their ultimate goal, and they don’t understand that in that 30-year time there is going to be volatility. They’re not equipped with the knowledge to be able to say, “Yeah, I knew this was going to happen once in 10 years and this is part of the plan.” Vernon: When 241 people switch to cash, the worry is if no one intervenes they’re actually now potentially on a very different trajectory, especially for the next few years. So the question is how proactive is the industry already, in terms of stepping up to contact those members you serve today and make sure they’re in the right fund, they understand their contributions; exactly all the stuff we’re talking about. That’s financial damage occurring right now in your client base if you haven’t actually gone out and talked to them. Boyle: The industry, let’s face it, has done an outstanding job to promote KiwiSaver to New Zealanders as a way of starting a savings programme for their retirement, and the whole objective was to get as many people that wanted to or could afford to, to get access to the benefits. The changes, we’re always going to probably have to deal with that. There will always be different amendments to KiwiSaver as it evolves. But I wonder what we can do now as a collective industry to drive some of these key messages and/or access advice for those when they need it, but that is going to be dependent on individual circumstances. Beattie: I think we have got nine months to sort this out. I think my greatest fear is that, as the markets unfold over the next six months, between now and March, when people will get their annual statements which are sent out three months after that, if we have a significant downturn we are going to have 2.4 million people receiving an account where their
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"If you talk to
a lot of 20-year -olds about KiwiSaver, without the home-buying capability they wouldn’t contribute." -John Body
balance has gone down. You won’t have 241 people switching to cash, there will be 240,000 people wanting to switch to cash. Vernon: I don’t think that’s the case, actually, if you have product providers who talk to their clients proactively and figure out that they’re in that fund. So the question is, for all the people who have got KiwiSaver clients, how many are you calling on a daily/weekly basis to make sure that they won’t get that surprise in the mail? That’s the issue. I think the regulator is at risk of asking as well. Beale: We’re in 2015 and we’ve got 465,000 people in ASB KiwiSaver, and you can’t call all of them. You need to use digital methods to give them the tools and the ability to understand what they are in and why, and that these things happen to make it an engaging experience, so when it does go down, the tool and the information you provided them makes sense. So they make a contribution the following day because they’re thinking it is a little bit cheaper to put money in. It is a fallacy that we have got to start calling and speaking to everybody. I go on to Amazon and buy something and it says, “People like you just bought this, do this.” Now in the KiwiSaver market, “People like you tend to be this age and do this, this is how they react and these are the sort of things you should be thinking about.” We’re behind people who are selling books and records. We need to start to moving with the times and
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using those sort of tools. James: We’re not selling books; it’s more like we are selling pharmaceuticals. You cannot go online and compare pharmaceuticals and make buying decisions. You have to go through somebody who knows how to prescribe those pharmaceuticals. Instead of doing risk profiling, which I think is nonsensical, what we should do is stress test their portfolio and say, “What would have happened to this portfolio in ’87 or in ’98 or in ’94?” Because people can understand that; it would have gone down by 1% and it would have taken me 36 months to recover. So our education, I think, has to be focused on concepts that investors are capable of understanding. Vernon: I’m not advocating ringing every person, but the reality is we are facing a community who have got very low levels of financial competency and all of those things are foreign. Body: I kind of disagree that we need to make it harder for people to self-serve, because we’ve got to react to how our consumers want to buy. The modern consumer basically is saying, “Ninety-nine per cent of my research is done online and then I make my buying decision, potentially or most likely with a human intervention in this part of our industry.” So I think the obligation on us is having education, information and then the ability for a human interaction when people actually need to go that next level. Putting artificial barriers and saying, “No, you can’t switch, or you can’t see your balance online,” we’ll just lose every under 50-year-old. Vernon: But do you think there is an obligation if you are going to switch, as the receiving institution, to have some inquiry as to where they switching from? The reality is we know right now there’s a disparity in the market going on, and there are people switching who aren’t aware of what they are foregoing in that switch activity, because the provider presenting the switch brochure to them is going, “I’m just going to tell you about this.” Boyle: That’s all they can do, depending on the level of advice. Vernon: I’m interested in understanding the point at which the industry collectively have some accountability to think about the receipting of a switch and the extent to which that client may actually be financially disadvantaged. Tongue: Let’s say 47% of the whole of KiwiSaver’s populous is in conservative and default; that’s because of the mechanism we used to get everybody into it. Quite simply, when we survey of our clients, one of the biggest responses is, “I don’t need to talk to you about KiwiSaver because I’m in it.” And then you say, “Do you know the difference between a growth and a conservative fund?” They all say no. We have got to get people to understand a couple of really simple things - asset allocation, risk and reward and those kinds of simple messages. Vernon: The reality is I have got clients who switch unwittingly and receive less contribution from their employer because the employer is
prepared to make a contribution to a certain scheme, and as soon as they switch their contribution rate goes down. That’s a financial loss to that client that they were totally unadvised on. If you talk to an AFA, they would say they are up against it. Certainly if you look at the volume of their feedback in things like the FA review, they’re feeling like it’s pretty tough going. KiwiSaver is obviously a pretty low return product for them at the present point in time and they’re also up against a lot of switching activity. Often people coming out of growth funds actually into just whatever they tick the box, it's actually dialled down their exposure because they don’t know because they’re just not engaged. The reality is we know that is a challenge; the challenge is going to manifest itself, I agree, when people get their annual statement next year, or actually, sadly, it might not manifest itself for five or 10 years when they get to retirement and go, “Oh, gee, that wasn’t quite what I had in mind.” James: Isn’t the logic to try and promote more life-cycle-type methodologies for people? Everyone appears to have sort of pushed back on it, because they don’t want to encourage people to take risk if they don’t consciously make that choice themselves. But the reality is it deals with a lot of the issues about people feeling the need to have to make choices all the time. Beattie: So they force them into taking on a bigger risk, which is the risk of not achieving what they need at retirement. James: There is also consciousness amongst
"About 95%
of people say they want to get started on their own and they don’t want to talk to somebody." -Richard James
LEAD STORY
"I think the
education point could be done on a monthly basis." -Henry Tongue
investors; if they know they’re in a wellstructured life cycle, it should diminish their feeling of needing to do something in a market event, or in a life event for that matter. Beattie: The education needs to start with the people making the regulations, educate them about what is the greater risk, and say the default fund being a conservative fund is capped at 25% growth assets must be switched to a Life Phases because that is less risk. Tongue: I think the education point could be done on a monthly basis. Let’s not do it at the point of switch or transfer, or any of those points when we have to get on the phone and speak to these people and then you have got the client sitting there with two people going down the phone at them. Why aren’t we doing it now? If we have got these statements coming out next year, we should be doing things on a monthly basis. Vernon: What we are up against is actually mass apathy. More people are worried about getting their download for iOS9 last week than about their KiwiSaver. James: We’re doing workplace programmes, and about 95% of people say they want to get started on their own and they don’t want to talk to somebody. I think first and foremost it is because they are embarrassed about their financial
situation. Secondly their perception is that it is going to be more expensive than the benefit they are going to receive in that near term. And it's that delayed gratification thing; it's a long time away. For a lot of people retirement is not a particularly exciting concept; particularly because our people tend to be mid-career in their 40s and 50s and retirement is slightly depressing. Boyle: That brings this longevity aspect - you have got 22% of New Zealanders still working over 65 today, and that’s going to increase because of the aging population.
IS COMPULSION SOMETHING WE SHOULD DO? Vernon: If we as a community want to have a whole bunch of people arrive at retirement without the financial means to adequately look after themselves, then that’s the trajectory we are on. I think KiwiSaver is fantastic, but the reality is we have still a lot of people that aren’t going to arrive at what we would collectively think as a desirable place. So is there a rule for that? I think we have got to be able to have that conversation. There’s a lower threshold now [for compulsion], isn’t there, because the kick-start has gone. The question is whether the MTC is a trade-off, and I worry that will just be another challenge. But I think the idea of co-contribution
– employers and employees being involved – and encouragement from the government, whether that’s member tax rates or whatever it is, that part is still quite important. That’s the fundamental magic space. Beale: Is it right to have a retirement saving scheme that you can take your money out and buy your first home? Vernon: We know all the issues of Auckland and house prices, but we’re seeing lots of people withdraw their money in other parts of New Zealand as well for first homes. In many cases that’s just dialling up their consumption of the bigger house because they can leverage money against debt. Boyle: If New Zealanders are going to be in a situation where there is less ownership when they get to retirement, then that’s something we worry about. That means that they’re going to have to save more be able to pay that cost of renting and that gets really hard as well. I guess my fear would be to see people take advantage of the HomeStart, but then stop making contributions in KiwiSaver, but my understanding is that the majority continue with their savings through KiwiSaver because they’re getting the employer contribution. Body: If you talk to a lot of 20-year-olds about KiwiSaver, without the home-buying capability they wouldn’t contribute. So it kind of does get them on the journey, and I think we probably lose very few of them as contributors. What it means is when we are delivering advice, we’ve got to say, “When you’re 20 and you have your first advice engagement, you know your retirement saving is going to go to zero at some point and then you have got a trajectory.” But there’s a continuum, if you take Richard’s
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"There is a
shortage of good-quality advisers. For the ones who are good, getting a client into KiwiSaver is too hard upfront." -David Beattie point - 95% start off by themselves and then, as they move further down the track, that’s where you probably have some of the technology and tools come in … James: The problem is, of those 95%, 90% of them do nothing. They say they want to get started on their own. As part of our workplace programme, we give them this free technology that we have built, it's called “My Wealth” and it helps them map their financial future; it includes the house and all those things. There’s about 10,000 of them signed up, and they have gone to the effort of putting their data in there but virtually none of them have done anything. Boyle: You can lead them to go through the whole process of understanding what’s going to be right for them, but if they don’t make that decision… We see that on Sorted. We’ve got nearly 40,000 people logged in, putting their data in to give them a bit of a benchmark where they are today, but it's that next step. Body: Would you guys consider running a more brutal campaign? Comparing the person who has saved and the person who hasn’t? Boyle: I think we are looking at how we
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could connect or bring to life some of those messages, and I’m not a real fan of the fear factor. As an industry, we tend to see fear as part of, if you don’t save you’re going to have a crappy retirement, or if you don’t have insurance you’re going not be covered and lose; all those fear factors. It’s about choices. The consequences can be negative, but everyone has choices. There’s providers offering free advice, but my understanding is that people aren’t taking that opportunity up. Is it because they are fearful that they’re going to get sold something else, or is it they don’t understand what the value of that advice is? Beattie: There’s definitely trust issues there. We have advisers embedded in our business model, and of course, having become a default provider, we have made a conscious effort to actually contact every single one who defaults in and engage with them right from day one. We get to a point in the conversation where it is clear that they just need some advice, and we have got advisers who are there on standby ready to be referred to. As soon as that is put in front of these people, they go, “No, I’m fine. No, thanks.” But it's all part of the whole package – “No, I don’t care.” So there’s a real aversion. Body: I wonder if part of it is not the financial budget for advice, but people’s time budget. Our experience is when customers ring us and say, “Am I in the right fund?” They want an answer within probably three minutes at the very, very outside. So we would say, “Well, people like you are in this type of fund, but can I ask you some questions about your own situation?” Then you lose them. Beattie: One of the encouraging things that we pick up from our call centre, who do make these outbound calls, and we do contact every single one of them, 50% of the people we do end up contacting are actually switching, making an active choice. That is not through a hard sell or anything. That is just taking them through a very simple, not taking up too much time, just a little bit of profiling and a little bit of education around things. Invariably they actually get it quite quickly. They go, “Actually, I should be in a default one. I’m 25 years old. What am I doing in that one? I should be in the high growth one, shouldn’t I?” James: Might be different when the high growth fund is showing negative-12 for the year, rather than positive-12 for five years or whatever the number is. You know what I mean? There would be a different conversation. Vernon: For us it runs at about 40% make an active choice. Lots just stay where they are, so that’s cool. But you have gone through the process, understood their profile and all that sort of stuff. For the most part they actually appreciate the call. Beale: We are slightly different. We started
on the journey of contacting KiwiSaver new joiners and devolved. They actually didn’t want to engage with us. We did an experiment of phoning people in a superannuation master trust who had a higher balance and phoned them and they all wanted to speak to us. I think people have got to understand that KiwiSaver, from a customer point of view, is becoming more of a commodity that they have. This fascination around transferring; when we ask people why they transfer their KiwiSaver, they want it in one place. Around 30% of them are saying, “I want it with my bank. I’m seeing it as part of, I have got my mortgage, I have got my transactional bank here, and I am going to have my KiwiSaver with you.” Boyle: Do you not think, though, technology in the future, it doesn’t actually matter where it is? There are ways now you can probably feed it into one place anyway. That is an advantage
"My worry is
the number of people who are in KiwiSaver, even contributing at low levels, but somehow equate that to what I call the “Chocolate Box Retirement”" -Blair Vernon
LEAD STORY
"When I was
in the UK I contributed to my pension funds because there was a tax incentive to do it. It made me want to do it." -Jonathan Beale
today that probably won’t be that much in the future, with the smartphones we are getting.
WHAT IS ONE THING THAT INDUSTRY COULD DO TO HELP GET THAT FINANCIAL ADVICE LEVEL UP THERE? Body: I think, for me, it’s affordable, accessible, and the industry needs to make sure its standards are high. I think it has got to be easy to find, and high-quality and cheap. Vernon: The advice has to be actionorientated, so we don’t have a nation of “I’m gonna, I’m gonna, I’m gonna”. You have got to do something. My worry is the advice is overly complex and static; it doesn’t drive action. Beattie: There is a shortage of good-quality advisers. For the ones who are good, getting a client into KiwiSaver is too hard upfront. Boyle: I think the advice model that we know today is not going to be an effective platform to meet KiwiSaver members’ needs for tomorrow. So perhaps, given the breadth that KiwiSaver has for New Zealanders and the number, it is more than a product. Access to advice or to give advice should be a lot easier, specifically perhaps just for KiwiSaver as an option so that it is limited. Beale: The number-one question we get asked is, “Am I in the right fund?” Now, it is very difficult to answer that question in the way that you want to answer it today. Or, “How much should I put in?” They are real simple basic questions, but our current structure about how you give advice makes it almost impossible to answer it in the way that the customer wants it
answered in a clear, easy, engaging manner. James: We have to turn advice into a profession. That is what is going to bring young people into wanting to be a financial adviser. Boyle: In fairness, you could have 20,000 new advisers in New Zealand. If there is not the need or perceived need by the consumer to get that, then you are never going to see that industry grow either. Beattie: I don’t think the profession is seen as a career path for the sort of people you want to attract into it. Part of that was because for a lot of financial advisers you cannot make a living purely off the investment advice in lump sum; you have to include risk. The current risk model is sending all the wrong messages in terms of the behaviours that that is encouraging.
SO THAT IS LIKE CROSS CONTAMINATION?
Beale: Yeah. There is a bias. If I am an adviser, there is an absolute bias now there, isn’t there? Beattie: Upfront commission is the business model. Beale: If you took away that bias, would there suddenly be more people wanting to give KiwiSaver advice? It would be a good question to ask. Vernon: You would start to figure out how many people can make it by delivering advice. If you have the advisers there, how do you actually remunerate them around that? Does the customer have to pay for it? Beattie: Ultimately. James: And the more directly the customer pays for it, the more they will trust it. I mean, customers don’t trust commissions in my view. It is a deterrent if they think somebody is being remunerated in the back door.
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{ FAA REVIEW }
Industry
calls for change Criticism of the current Financial Advisers Act has poured in, in response to the Government's recent review issues paper. Almost every aspect of regulation has been picked apart, from the names advisers are called to the way they are paid and the qualifications they have. ASSET magazine looked at the key themes. ADVISER DESIGNATIONS: IS THE CURRENT SYSTEM OF REGISTERED, AUTHORISED AND QUALIFYING FINANCIAL ENTITY ADVISERS WORKING? Massey University: The term “registered financial adviser” is misleading for consumers. Westpac: The general public believes the term RFA means the holder has completed education or gained experience in order to hold the title. However, this term simply means the holder has passed a credit check, is a member of an approved disputes resolution scheme and is registered on the Financial Services Providers Register.
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Partners Life: The term “financial adviser” should only apply to AFAs as AFAs are the only advisers who are adequately qualified to provide advice across the broad spectrum of financial products. For all non-AFA advisers, the term "financial advice" and the corresponding "financial adviser" categories should be replaced with terms that more accurately reflect the forms of advice these advisers are permitted to give, such as "insurance advice" and/or "mortgage advice”. Nigel Tate: Consumers who know of the different types of adviser think of a registered financial adviser in the same way they think of a registered medical practitioner. Financial Services Council: The term “registered financial adviser” does not give the
consumer an accurate understanding of what these advisers are allowed to provide them advice about and the level of competence they have to do so. SiFA: Requiring all financial advisers to meet the minimum requirements for authorisation as an AFA but with a focus on the competencies needed for each individual’s stream of service is considered to be a more appropriate solution. PAA: While it is appropriate to tailor the conduct requirements to different advice needs, we recommend this distinction should be made at a conduct standards level within the Code of Conduct, not as a basis for categorising advisers into different types. Securities Industry Association:
ASSET INVESTMENT REGULATION DATA ADVISER
Some have suggested that only those providing personalised advice should be able to use the term “financial adviser”. On the face of it, this would seem to be an elegant solution but, as with any label, it can risk misinterpretation, if the actual service being provided by the adviser in any particular circumstance is not actually an advice service. Consilium: We believe the solution is to have separate categories based on the type of product, rather than the complexity of the product. If advisers give investment advice in any capacity, they should be licensed as an investment adviser. If they give insurance advice, they should be licensed as an insurance adviser. ANZ: Customers are frustrated at not being able to access product-related advice, which they often perceive as financial advice. AMP: The different categorisations and adviser obligations undermine the FMA’s aim of ensuring that sales processes and advisory services reflect the consumer’s best interest, by driving differing standards of advice, disclosure and conflict management. This makes it difficult for consumers to assess the quality and suitability of advisers and their advice. A situation is also created in which consumers need more than one adviser to meet their financial needs. BNZ: Educating the public on this to a point where there is sound understanding [of the different categories] is likely to be a challenge. BNZ submits a preferable solution possibly to require RFAs to be more aligned with those of
other advisers, who are subject to a code of professional conduct. The QFE model already places significant compliance requirements on their adviser services.
DISCLOSURE - DO CUSTOMERS UNDERSTAND THE DISCLOSURE DOCUMENTS THEY ARE GIVEN? HAVE WE GOT THE RULES RIGHT IN TERMS OF WHAT CLIENTS NEED TO BE TOLD?
Clients are tired of continuous disclosure but accept it due to the relationship they have with me. -Peter Leitch
Strategi: The primary and secondary disclosure statement provides a degree of confusion. It is recommended that only a primary disclosure statement be required, and this should contain more information. SiFA: The primary and secondary disclosure statements might be considered adequate but are not very useful or practical. Westpac: The information disclosed by RFAs should be the same as for AFAs. This would mean the addition of information on remuneration qualifications and areas of expertise. The AFA disclosure is too long and complex for consumers to readily understand. Taken together, Westpac’s AFA primary and secondary disclosures are 15 pages long. Securities Industry Association: The disclosure obligations for RFAs should be the same as for AFAs. The purpose of disclosure is to provide clients with detailed information relating to any conflicts of interest, including fee/remuneration in order for their
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clients to make an informed decision on whether to procure the services. Such disclosure information is necessary to meet the objectives of the Act. Peter Leitch: Clients are tired of continuous disclosure but accept it due to the relationship they have with me. Partners Life: We believe there should be mandatory disclosure requirements for all advisers to disclose any interest that could reasonably be expected to materially influence the advice being provided to the consumer. Massey University: RFAs need to disclose the range of products that they are able to assist with. If their product range is restricted, for example to less than half the market, an RFA should be unable to recommend a product as being the “best� for the client. RFAs should also be required to disclose how they are remunerated, including the receipt of commissions and/or other incentives. Insurance and Financial Services Ombudsman: RFAs should be obliged to disclose fees and commission to consumers.
The primary and secondary disclosure statements might be considered adequate but are not very useful or practical. -Robert Oddy, SiFA
Commissions provide a necessary function within the industry that cannot be adequately substituted by other forms of remuneration -Naomi Ballantyne, Partners Life
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Financial Services Council: A simpler, more consumer-friendly, information source would be more helpful including clearly telling the customer if they are in the sales or financial advice process. Few clients read disclosure statements in detail and most just glance at them. Consilium: Consumers are overwhelmed by the amount and type of disclosure. The key for disclosure is that consumers understand exactly how an adviser is compensated, how much they are paid or have the potential to be paid by every source. BNZ: Current disclosure assumes retail customers have a level of financial knowledge that many simply do not. AMP: We believe that the same disclosure requirements should apply to all advisers, and needs to be appropriate for the type of service being provided by the adviser. All advice disclosure needs to be simplified and meaningful to the consumer. The disclosure documents today are too lengthy and contain too much boiler plate information.
We would support mandating maximum document length. ASB: Simplification of the disclosure requirements, particularly by category two QFE advisers, could be done in conjunction with increasing consumer financial capability. Sovereign: Sovereign believes that one solution to the underinsurance and inappropriate churn issues is to level the playing field on disclosure of commissions. Currently, when they sell category two products, AFAs and RFAs do not have the same commission disclosure requirements. Sovereign believes that this unevenness provides a mechanism that could encourage inappropriate churn. Anecdotally, we have heard of instances of AFAs becoming RFAs to take advantage of the reduced disclosure requirements.
IS THE CURRENT LEVEL FIVE QUALIFICATION FOR AFAS SUFFICIENT? SHOULD THERE BE A REQUIREMENT FOR RFAS, IF SUCH A DESIGNATION CONTINUES TO EXIST? PAA: We recommend that all advisers should meet minimum qualification levels. We suggest that for advisers not yet qualified at the level five standard, a three to five-year transition to that qualification be allowed. All advisers would then be required to maintain a professional development plan, available to the FMA for review. We support different combinations of the level five course work requirements being specified by the Code Committee for different types of advice situation, which in effect would allow for standards appropriate for insurance and mortgage advice. Massey University: One of the major issues with the current AFA education requirements is that it is tending to lead to a vastly lower levels of skill in the industry than was the case pre-regulation. Before the code, financial advisers seeking to follow global trends as well further distinguish themselves as professionals were aiming to obtain a level seven qualification via a Graduate Diploma and CFP/CLU. The need to obtain level five before obtaining the AFA designation discourages new entrants from continuing on to the level seven qualification. A level five qualification, however, is only acceptable as an interim measure or for lower level category two specialities. The reason for this is that a level five qualification has a very low theoretical content and is more suited to staff involved in routine back-office procedures than expert advisers. Even if content headings
ASSET REGULATION DATA ADVISER
indicate some complexity, the very limited classroom hours ensure that AFA is very limited. Consilium: AFAs should have a degree and pass an entrance exam they have to resit every so many years. ANZ: A diploma or tertiary-based learning for AFAs, and some form of CPD should be required. A sliding scale of qualifications and experience should apply to financial advisers relevant to the products on which they are able to advise. ASB: No evidence exists that the current formal education standards are inadequate or resulting in consumer harm. We believe that raising them would not in itself result in better consumer outcomes. It should be recognised that formal education is only one aspect of competency and that there are other equally important aspects to competency, for example, continued professional training, on the job learning, mentoring and supervision. AIA: We would be concerned if increased education and competency requirements led to a significant number of experienced RFAs leaving the industry. AIA recommends that experienced advisers who have worked in the industry for a number of years be allowed to continue to do so.
Revenue to a practice through the payment of commissions is a suitable way of structuring a business. For advisers who have provided advice to two to three generations of clients, and often on a commission basis only -Peter Leitch SHOULD REMUNERATION BY COMMISSION BE RESTRICTED OR BANNED?
Risk commissions should be universally reduced to about 25% of API and should be paid annually. -Nigel Tate
Strategi: Commission should be retained but a restriction placed on the level paid, for insurance products no more than 60% of annual premium should be paid upfront. SiFA: Commissions represent but one form of remuneration received in the main by self-employed financial advisers who, as with any other business, need to meet expenses [including significantly increased regulatory compliance costs], invest into the business to ensure future viability, and receive an income to support their own families. We do not subscribe to the view that any form of payment, irrespective whether commissions or alternatives, should be banned or restricted by regulation. However, we support the requirement for all payments and inducements to be fully disclosed to consumers before advice and/or product implementation. Westpac: There is insufficient evidence of commission selling causing actual harm. Peter Leitch: Revenue to a practice through the payment of commissions is a suitable way of structuring a business. For advisers who have provided advice to two to three generations of clients, and often on a commission basis only, this advice has not been any less relevant because there may have been, or continues to be revenue paid to the adviser. Long term relationships can be based on revenue from commission, from fees, or a combination of both. Partners Life: Commissions provide
a necessary function within the industry that cannot be adequately substituted by other forms of remuneration. Commission structures enable advisers to remain independent from product providers, so restrictions could cause advisers to stop offering such advice, ultimately leading to a lessening of competition in the market and an increase in the existing under-insurance gap. Nigel Tate: Risk commissions should be universally reduced to about 25% of API and should be paid annually. Massey University: Within the insurance advice sector clients are not at present prepared to pay sufficient fees to allow commissions to be banned. The ideal solution would be a restriction of upfront commissions and an increase in trails in such a way that overall adviser income is not substantially reduced. TripleA: We believe that transparency of all incentive payments to advisers whether direct or indirect in nature needs to be a core guiding principle. Financial Services Council: Robo-advice models suggest that in the future advice will be “free”. Furthermore, there is little appetite among New Zealand consumers to pay for financial advice, except in limited circumstances where they are prepared to pay a fee for a financial plan. Accordingly, an industry solution should be sought for commission. Consilium: Commission should be banned for investment advisers but not insurance advisers. AIA: New Zealand has a significant underinsurance problem and regulating and/ or capping commission will further compound this issue. AIA does have concerns around the level of production based or “soft” remuneration paid to RFAs which include things such as merchandise and overseas trips. While, as previously stated, we believe sustainable commission models help ensure that we retain a suitable number of RFAs within the industry to service consumers we have concerns that the provision of “soft” remuneration is not always in the best interest of consumers. AMP: Our calculations indicate that premiums are inflated by up to 30% in NZ compared with Australia, largely we believe as a result of higher commission levels. With commissions at these levels we have little sympathy for those in the industry who raise the cost of compliance as arguments against regulation. The current standard of advice regulation is lower than that applying internationally in circumstances where NZ “advisers” are earning significantly higher premiums than their international peers. It should be made clear to a consumer that those unwilling to invest in compliance systems and controls are not advisers, they are sales people, and the consumer does not have the same safeguards. In our view, the current commission model in NZ is driving high cost and risk and thus limiting affordability and accessibility to the detriment of insurance adequacy for consumers.
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PRACTICE ASSET DATA MANAGEMENT ADVISER
{ BUSINESS RESOLUTIONS }
Where do you get your inspiration? Sometimes you need to take a step back to see what sets you apart, writes Mike Moore.
{ MIKE MOORE }
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e are all busy, busy, busy. Doing the stuff. Sometimes to the extent that you forget what you are meant to be providing to your clients: Leadership and inspiration. The reality is that we have to assist our clients to make the tough decisions now, if they are going to achieve the outcomes that we are promising. This is not about a 20-page spreadsheet of quotations; it is about giving them
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the courage and confidence to make the decision there and then. In turn, this means that we need to share some of our inspiration. We need to give them the emotional crutch to make the pragmatic decision. In turn we need to be inspired. I have been fortunate enough to attend meetings such as the Million Dollar Round Table, and Top of the Table and I was truly impressed that those at the top end of their profession took the time and cost out to attend these meetings.
SHARE WITH CLIENTS They did not do it for fun. They did it because they needed to stoke their own fires to be really excited about their professional advice, so that they could share that with clients. That opportunity still exists. A few weeks ago Peter Morrison, of Summit Brokers, motivated by Mat Page of the local MDRT committee, travelled the country speaking to many advisers. Not so that they could get education credits but so that everyone could share in his inspiration. Some 240 people attended those meetings and are buzzing about the refreshment of their
inspiration and ideas. It is probably worthwhile to ask yourself, "when was the last time I attended something like that, rather than just attending something boring but which draws maximum education credits?" To be inspiring for our clients we need to conserve our inner fire. Very few of us can remain constantly upbeat, and we need to ensure that our energy is available to those clients at the time that they need it the most. It can be on retirement date, at claim time, but most often when they are making their decision about putting their plan into place. My first obligation is to stoke my own fire so that I have some heat to spare!
CLIENT BASE Secondly I need to have a good range of positive anecdotes and outcomes that I can share with clients so they can get a feel of what the decision they are contemplating is going to do for them. Lastly I need to make sure that my client base is full of people that I can provide with a positive influence. It is not surprising that in our business a significant number of older advisers are choosing to streamline their practices. By that
PRACTICE ASSET DATA MANAGEMENT ADVISER
we mean that they are selecting out the 100 or 200 people they want to deal with into the future and selling the balance. (Win, win all around). The clients they keep are receiving a lot more attention. The clients they have sold are being well looked after by the new owner. As you can well imagine, the purchaser is very fired up about providing a highquality service to those new clients, having paid a worthwhile capital sum to acquire that opportunity. Older advisers have spent their lifetime accumulating clients, not always fitting their profile and have decided that it is high time that they conserved their energy for those that they are going to go forward with, and hand over those that they are not likely to help to someone who can. The old 80/20 rule provides for 20% of your clients providing 80% of your revenue and deserving of 80% of your time.
REVIEWING AFFAIRS It is a bit unfair, because at least in theory all clients should be treated equally and given every opportunity to review their affairs. Practice does not always, however, follow theory. So how are you going to get excited for next year? By the time you are reading this, it is getting towards the end of a very successful 2015 and you are starting to get your plans together for next year. Downtime is the best time to stoke your fire. First, there is plenty of family relaxation, but also starting to think
about what services and ideas you can take to your key customers next year. Here is a thought: why don’t you pretend that you are back in your first year as an adviser and you are full of nervous energy? You are fine-tuning your approach to potential new clients and what you have to offer. If you look around your existing customer base, have you actually delivered on those promises? No doubt you are promising them that you have their interest at heart, you are capable and resourceful enough to provide professional advice and that you will regularly review their changes in circumstances. Do you actually do that all the time? If you fire needs stoking there are plenty of opportunities. Your various professional associations will have access to any number of high-quality colleagues who each have their story to tell. Mat Page heading MDRT in New Zealand was so excited about the recent roadshow that they are planning another for early February. He tells me that they have three different but excellent speakers and further details will follow.
FINE JOB In the advisory space you sell leadership. There are lots of people with degrees and other qualifications out there who do a fine job of writing a 50-page report but the truly successful ones bond with their clients. They help them from their experience in making the tough decisions. When they are needed they are there with compassion care
and concern. Why don’t you spend some time over your summer break re-charging your batteries, and thinking about what inspiration you are going to take to your clients in 2016? Because it is near the end of the year, we at Mike Moore Marketing Limited offer our very best wishes for the New Year. For us this has been an outstanding year and because of the shift in emphasis out there in the market, we are going to add an additional service next year by providing a high-quality and professional valuation process. We are finding a number of advisers are part of a corporate arrangement and are keen to do several things. Firstly in arranging their own estates they need to be aware of the current and future values of their practice. Secondly they are often involved in internal share purchase arrangements, again requiring a valuation. The more progressive like to get their business valued every year or two so that they can map out their successes and plan for future developments. In the meantime, we hope you have as much fun for the rest of this year as we plan to. Mike Moore is the owner of Mike Moore Marketing, which offers consultancy services to advisers wanting to buy, sell or grow an advice firm
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PAA NEWS
{ PAA }
NTU rates. What are we doing about it? We have the data and distribution. Let’s put it to work for the consumer.
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hat are the underlying reasons for the increase in insurance NTU (Not Taken Up) rates? Is the industry working collaboratively enough and utilising the data available to get to the bottom of the issue to best serve the interests of consumers? Good questions to consider given that this issue – while not new – is affecting a growing number of New Zealanders. Darrin Franks, PAA board Member, shares his views: From the conversations I have had and the research I have done, increasing NTU rates appear to be an issue across the market. It represents cost to insurers, advisers and most importantly, to clients. The sheer volume of clients classified as “impaired lives” is increasing. It could be a risk tolerance issue at the insurer or reinsurer level; it could be a demographic issue – for example, more people in an older age bracket are looking for cover and it stands to reason that they may have more health issues; higher prevalence of health issues in some communities; or it could be a combination of these and other issues. The industry needs to work together to understand how it can be more relevant to consumers who represent a higher degree of risk to insurers. After all, aren’t we in the business of covering risk? Distributors should be seen as an extension of the suppliers, and suppliers should be seen as an enhancing the distributor solution delivery. For without product, risk liability solutions are more difficult. Until that thinking gets into the water supply, these consumers will continue to be underserved. From the client’s perspective, they have gone through the advice process, and through
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An adviser’s job is to make sure that people don’t die financially before they die physically. To achieve that, you need options that account for all different levels of risk – not a one-size-fits-all offering. that process understand that they are unable to get cover, or on affordable terms, based on existing products. But still – rightly so - want options. They understand that the insurer feels that they can’t quantify the risks associated with, for example, heart disease, diabetes and the like, but want cover for everything else in a comprehensive fashion. With the staggering improvements in medical science, there’s a good chance that something else could cause death well before their pre-existing conditions. Without comprehensive cover, the default product has been Accidental Death, which is inadequate. An adviser’s job is to make sure that people don’t die financially before they die
physically. To achieve that, you need options that account for all different levels of risk – not a one-size-fits-all offering. Smart insurance product manufacturers understand their reason for being. One solution is Guaranteed Acceptance products. If you are in the modern world of advice, these can be viewed as a sub-set of the entire advice process; they are a way to enhance the advice proposition and support clients whose needs have been exposed through the advice process. Or in other words, they are not necessarily a go-to product, but one that becomes an option once needs and risk issues have been identified. Back to the initial question: With the vast improvement in the availability of data, what can we collectively do to close the submissionto-issue gap and provide appropriate solutions for clients with a higher degree of risk? What can we do together to really and empirically understand the issues and then tailor solutions that are not just about selling product, but about meeting consumer needs? Product innovations like Volo are going to prove to the industry that you can get real time access to data, which means you can quantify risk on a real-time basis. Over time and through data insight on an individual level, we’ll potentially see rate tables that are no longer lineal. The result? Based on lifestyle behaviour, 34 year olds could end up paying less for their insurance than a 28 year old. Revolutionary stuff. This issue is not going away. If you think logically about the improvements in medical science, people don’t die anymore, they just get sicker. So it follows that with time, we are going to see more and more impaired lives. The question is, what do we want to do about that. Time to get our heads together.
PAA NEWS
PRACTICE MANAGEMENT
{ BRAND BUILDING }
MARKETING
DIGITAL STRATEGIES Is social media a waste of time? No, writes Tony Vidler, who says the medium enables customers to engage with each other.
I
{ TONY VIDLER }
t should be the “no brainer” of marketing if you want to be seen and heard: be where your audience already is, rather than set up somewhere else and hope they come and listen to you. Be where they are… or, better yet; where they are going to be next. Cyberspace is where the customers are right now. Literally, “right now”, as you read this magazine. The only question that really matters from a marketing perspective is: which planet are your ideal customers on in that particular universe? Before answering, consider this: over 3 million Kiwis regularly access social media sites, which is 95% of the total internet audience in the country. I am willing to hazard a guess that a lot of the 5% of the total internet audience who do not access social media are mostly established professional services providers. That is a little bit of a slap in the face to the readers, and I don’t mean to be rude; however, had I a dollar for every adviser who has opined to me in the last five years that “social media is a waste of time” I would have retired already.
DIGITAL PLATFORMS Let’s be clear: social media is just a way of describing a variety of digital platforms that enable consumers to engage with each other. Other digital platforms which achieve the
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same purpose, but with different structure or technology, are email, SMS, Skype, and websites. In the main, financial services has incorporated digital marketing strategies and tactics into daily business life, except when it comes to social media. Financial advisers are definitely beginning to switch on to the potential of social media for marketing and customer engagement now, but still appear to be tentative in general terms. For instance, nearly all advisers have a
LinkedIn account by now, but more than half appear to have done little more with it than compile the briefest of summaries, and perhaps connected to a few peers and school buddies. They’ve fenced off the section but haven’t really built anything on it.
JOB HUNTING Some have done somewhat better and transferred their resume on to their LinkedIn
PRACTICE MANAGEMENT
profile. Not surprisingly, the impression is given that actually they are just looking for another job. It would be fair to say that while the uptake in registering LinkedIn accounts has been nothing short of extraordinary in New Zealand (on a per capita basis with 1.4 million LinkedIn accounts in NZ now), it is still relatively early days for most users getting to grips with the platform and the opportunities it presents. For all the LinkedIn accounts in NZ, there are still only around 100,000 daily visitors on average to the site here. Remember that LinkedIn exists solely as a business networking platform … and clearly many still haven’t figured out what to do with it yet. Shouldn’t that be an opportunity for anyone wanting business owners or professionals as clients? Begin reaching out and connecting and sharing information and introductions.
BRAND FOLLOWING Moving beyond LinkedIn there are myriad other digital platforms which present all sorts of opportunities – depending on who your target market is. Consider the following: ➤ 83% of Pinterest users prefer to follow a brand rather than a celebrity. And approximately 80% of the users are women aged over 35. ➤ 51% of Snapchat’s users are still living with their parents. ➤ The fastest growing demographic for new Facebook accounts in NZ is aged 65+ women. ➤ 64% of teenagers who have a Facebook account (which is pretty much all of them) plan to maintain it, but use it less. ➤ 33% of Twitter users share opinions about products, services and companies regularly, and Twitter regularly features as consumers' “second”
A generic approach aimed at nobody in particular usually results in very poor uptake
leaflet drop in neighbourhood letterboxes. A generic approach aimed at nobody in particular usually results in very poor uptake, which is why so many generic promotions focus on price as the compelling value. Saving money has broad appeal and cuts across market segments. The main problem with this approach from my perspective is that it invariably attracts a high proportion of the clients you do not want: the price shoppers and fee-hagglers.
NEEDS, WANTS, ASPIRATIONS platform on social media. YouTube has over a billion users globally, and it is the second most popular search engine in the world after Google. Over 2.5 million Kiwis use YouTube now. All social media usage is increasingly being done on mobile devices. These are just a few of the known planets in the cyberspace universe, but hopefully enough to make the point that some would be incredibly effective in reaching a target audience – and some would be completely ineffective. It all depends on who you are trying to reach.
MAKING UP THEIR MINDS Therein lies the problem for many advisers who cannot make up their minds about digital marketing or using social media: they don’t figure out who it is they are wanting to engage with and get as clients in the first place. Any type of marketing using virtually any medium will be relatively ineffective if the message does not resonate with any particular segment of society, or type of customer. That is just as true for social media as it is for a
Really effective marketing talks to the desired target market’s needs and wants, and aspirations. The message resonates with them. Before trying to decide whether social media can fit in with a particular marketing strategy the first priority must be to determine who to attract as a client. Only then can you logically decide whether social media in the broadest sense can be an effective way of creating brand awareness and then engaging with prospects. Then the research on which social media platform, or platforms, can be effective can be done, because now you’ve figured out which planet your customers are actually on. If your research and market understanding is thorough you can also begin to work out which planets they are likely to be heading to next. Be there before the majority of your target market is and you’ll be the voice they are listening to and talking about. That’s pretty good marketing.
Tony Vidler runs Strictly Business, helping financial advisers to build better and more profitable businesses.
INSURANCE
{ RELATIONSHIP MANAGEMENT }
LETTING THE CUSTOMER WIN
& WHEN TO CHALLENGE Clients should have an understanding of the fundamentals in establishing goals, writes Russell Hutchinson.
T { RUSSELL HUTCHINSON } 030
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he starting point for almost any advice discussion is probably to assume that the client has come to you for advice, so it would be better if the adviser were in charge. Of course, plenty of clients will turn up at an advice meeting and seek to give plenty of advice, rather than take it. Wealthier people are perhaps more likely to act in this way, but not always. Some advisers tell me all the time that a certain group is always telling them what to do. But some pretty good evidence shows that the take-up rate for insurance hardly budges with differences in ethnicity (Massey University, big study, reliable data). So it seems that "awkward" clients are reasonably evenly distributed across the globe. That being the case, it appears that the question of when you should gracefully allow the client to take their own advice needs further investigation. When in the advice process should this occur? We think the client should accept that there is an advice process. Whatever the details of your specific interpretation of the process is, the six-step advice process is a model, and the client should have an understanding of the fundamentals: in the course of that you are going to gather information and establish goals, identify their current situation, development and make recommendations.
INSURANCE FINANCAL LITERACY Obviously the client can set parameters. But sometimes those will need challenging. That’s the role of providing some information, or basic financial literacy. Without this the client and adviser lack a common language in which to discuss scope limits in a sensible way. Examples include a client thinking that “mortgage protection insurance” includes life, trauma, and TPD, because that’s how it worked at the last bank they visited, whereas the adviser would consider those things separately. A more extreme example is an immigrant client whose definition of insurance was "savings plan" but wanted "something that just pays a benefit if I’m sick"… at this point the adviser must undertake the role of educator, with judicious listening to catch pre-conceptions the client has that need clarification. Once you are past the hurdle of a basic common understanding then the client view must take the lead in objective-setting. They must define, say, budget parameters, or such goals as "ensuring we do not lose the house" and so on. Those goals can be challenged. If the budget is simply way too low your engagement is perhaps going to be a brief one. But best you find out now. Assuming the goals and scope make sense the lead must now return to the adviser for the formulation of recommendations. Those who shirk this duty have brief careers in the industry. But once you have made your recommendations then the client questions, objects, or outright rejects some recommendations. Here is a selection of the most common scenarios. DATA GATHERING The client decides to spend less. Without a lot of groundwork this is hard to challenge. Unless it is completely out of whack with the client’s income and disclosures about budget in the data gathering section it is hard to challenge – especially at this late stage. Many advisers prefer to establish the budget envelope earlier in the sales process. One interesting rule of thumb used is the guideline that an insurance package typically costs between 2% and 4% of salary. What cover, of what quality, and quantity will be determined by the budget. After those challenges the client’s decision must, of course, be allowed to win.
your advice. They might as well have vocalised the worry “I think you’re recommending stuff I don’t need just to make more money out of me.” You must be ready, preferably with good third-party data, to justify why your recommendation is in their best interest. You don’t need to win. This may have been a smokescreen to cover a reluctance to admit a budget limit, and if so you may have to fall back in the end, but they are expecting you to at least parry the assertion. I don’t think I need that much: Happiness can abound at such a suggestion; after all, we can now both snuggle up next to each other on the side of "prudent insurance buyers". They are going to buy. It is now a question of how much. Customers are led astray by the way we present insurance. It appears stupidly cheap for anyone under age 40 to buy a lotto-win worth of life insurance. But in today’s environment that will barely fund an income as big as the married rate of superannuation. A walk through the numbers is obviously called for. Another good strategy is to provide a reference group. The national modal average purchase is just $200,000 for life cover. But if most of your clients buy $1 million, then you should tell the client that, they may happily accept that is a prudent recommendation taken by "most people." If you actually have a testimonial or case studies to hand, even better. But this can end up back at the budget discussion so you may have to surrender in the end. I don’t think they will pay a claim. This comes down to a question of trust. It is vital to pin this down. Does the client mean that this particular company won’t pay? If so, why? Or is it a question of the industry. Fortunately, masses of great materials to support your assertion that lots of claims are made, and lots are paid are available. This is one of those bits of client-talk that must be challenged, as a consultant I have at times failed to challenge clients enough. As I have learned to challenge them more the entire relationship has generally improved. Russell Hutchinson is director of Chatswood Consulting and director of Quality Product Research.
Bad service. You recommend company x and one says "we used to deal with them back in… and they were useless" or "my sister had her insurance with them, and they were terrible." You may find it tempting simply to roll over and choose another company, but you should probably probe a bit first. In this case the client’s perception of "service" can often be incorrect. What’s more, they are often mistaken about where the blame should properly lie. A bad adviser, a problem with the bank, and an acquaintance who gave a shockingly one-sided account of a problem, may all be uncovered and dealt with. Besides, the client has hired you to tell them what you think. An objection is, often, a request for more information. Of course, in some cases the client may legitimately have a gripe and they don’t have to put the business with a company they don’t like. If they do dig their toes in then you must document their objection as the reason for moving your recommendation – it could be crucial later on if you have to defend a change. In the face of a problem with a claim the client’s memory of the conversation may differ. “I don’t like that brand”: Who knows why? Sometimes they exhibit some strange prejudices. “I don’t want to deal with an American company”, or a supposed ethical preference “they invest in a weapons company” and so on. This is a darned hard thing to overcome, and in truth you do not need to, provided that you have a reasonable alternative. Unlike a service-based or claim-based preference the belief that the client holds is likely to be about their values, and has nothing to do with your advice. Therefore, little is to be gained professionally having an argument with the client about whether they are right to believe the things they think. Of course you must re-state your reasons and document their objection, but it seems best practice is to generally move on. I don’t think I need that: This must simply be dealt with. It calls for a spirited defence. It is, in essence, a question of trust in
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{ 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 1.417 3.22 2.96 2.97 AMP Prem PSS OnePath NZ Cash 1.5156 3.35 3.07 3.10 AMP PSS Select Cash 1.4332 3.14 2.83 2.83 ANZ KiwiSaver-Cash 1.2566 3.66 3.25 3.20 Aon KiwiSaver ANZ Cash 14.6122 3.03 2.72 2.76 Aon KiwiSaver Nikko AM Cash 13.581 3.50 3.27 3.35 ASB KiwiSaver Scheme's NZ Cash 1.3668 3.61 3.27 2.96 Asteron Rtrmnt Savings Plan Deposit 10.5385 3.86 3.64 3.46 Asteron Super Yield Deposit Fund 10.5643 3.86 3.64 3.46 Asteron Superplan 2000 Capital Fund 2.2124 3.60 3.58 3.46 Asteron Superplan Capital Fund 2.6229 3.05 3.05 2.93 Grosvenor KiwiSaver Enhanced 1.4361 3.35 3.28 3.34 Income Fund Mercer KiwiSaver Cash -3.59 3.30 3.33 ANZ Default KiwiSaver Scheme-Cash 1.3485 3.51 3.21 3.21 SIL 60s + Sup Cash Fund 2.0925 3.01 2.62 2.61 SIL Cash Plus 2.0925 3.01 2.62 2.61 OneAnswer KiwiSaver-Cash Fund 1.3072 3.51 3.12 3.06 Staples Rodway KiwiSaver Conservative -3.31 3.34 3.16 Fisher TWO KiwiSaver Scheme-Presv 2717.48505 3.52 3.39 3.25 Westpac KiwiSaver-Cash Fund 1.3153 3.51 3.21 3.04 New Zealand Insurance Fund Cash Non-PIE Fidelity Life Cash Portfolio 3.2055 1.90 1.80 1.78 New Zealand Insurance Fund Equity Region Asia Pacific SIL 60s + Sup Pacific Basin Share 1.9919 6.24 5.23 3.04 SIL P/R Pacific Basin Fund 1.9919 6.24 5.23 3.04 New Zealand Insurance Fund Equity Region Australasia Aon KiwiSaver Milford 2.669 9.96 15.16 14.24 Asteron Superplan 2000 Trans Tasman 3.5572 8.11 14.78 12.07 Fund Asteron Superplan Trans Tasman Fund 4.4972 7.31 14.03 11.34 Grosvenor KiwiSaver Socially Rsp Inv Gr 1.4657 7.35 8.66 6.13 Grosvenor KiwiSaver Trans-Tasman Share 1.1801 -2.32 1.50 -0.73 Milford Active Growth KiwiSaver 2.68165 10.56 15.55 14.47 OneAnswer KiwiSaver-Australasian Share 1.4134 2.61 14.34 13.17 Smartshares Smartkiwi Growth Fund 1.1463 8.79 13.35 8.48 New Zealand Insurance Fund Equity Region Emerging Markets Fisher FreedomPlan - Emerg Mkts 2.47452 6.15 5.56 -0.56 Fisher FuturePlan - Emerg Mkts 2.47452 6.15 5.56 -0.56 New Zealand Insurance Fund Equity Region Europe Asteron Superplan 2000 European Fund 2.4217 18.02 18.90 11.35 Asteron Superplan European Fund 2.8396 17.07 18.09 10.56 New Zealand Insurance Fund Equity Region North America Asteron Superplan 2000 Nth Amrn Fd 2.3613 10.41 17.15 13.07 Asteron Superplan North American Fund 3.3567 10.16 16.54 12.41 New Zealand Insurance Fund Equity Region Australasia AMP Prem PSS OnePath NZ Shares 1.8932 -1.77 12.49 11.94 New Zealand Insurance Fund Equity Region NZ Asteron Rtrmnt Savings Plan NZ Equity 3.3764 8.44 15.05 12.08 SIL 60s + Sup NZ Share Fund 4.4324 2.53 13.75 12.99 New Zealand Insurance Fund Equity Region NZ Non-PIE Fidelity Life NZ Shares Portfolio 5.1446 6.37 9.72 6.14 New Zealand Insurance Fund Equity Region World AMP Prem PSS FD Intl Share Fund 1 Value 1.1661 10.80 16.46 8.85 AMP Prem PSS FD Intl Share Fund 1.2991 18.56 17.69 10.55 3 Growth Asteron Rtrmnt Savings Plan Intl Eqty 2.653 12.97 16.81 10.44 Asteron Superplan 2000 Aggressive Fund 1.9288 13.02 12.30 7.93 Asteron Superplan 2000 Global Fund 2.1367 11.97 15.85 9.88 Asteron Superplan Aggressive Fund 1.8248 12.37 11.64 7.30 Asteron Superplan Global Fund 2.5172 11.53 15.11 9.12 Grosvenor KiwiSaver International Share 1.614 7.28 14.65 8.23 SIL 60s + Sup International Share Fund 2.9421 18.70 18.77 12.01 SIL International Share 2.9421 18.70 18.77 12.01 OneAnswer KiwiSaver-Intl Share 1.5411 19.37 19.45 12.61 OneAnswer KiwiSaver-Sustainable 1.5411 13.31 14.98 8.71 Growth Fisher FreedomPlan - Intl Coms 2.59845 -0.77 9.05 6.45 Fisher FuturePlan - Intl Coms 2.59845 -0.77 9.05 6.45 Fisher TWO KiwiSaver Scheme-Eq 3576.87776 3.03 10.75 7.75
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72.12 4.40 1.38 241.44 3.48 1.42 339.13 3.27 4.23 3.51 23.20
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18.19
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14.33 2.94 0.85 1.25 25.35 23.55 25.81 259.81
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5.04
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0.18 3.07
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99.52 6.19
25.89 15.38 4.44 400.55 19.41 26.30 1.45 21.34
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1.96 15.71
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1.86 15.43
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4.07
1.63 1.97
2.87
5.72
5.80
4.04 0.75 3.52 5.59 32.85 6.82 0.77 12.98 34.44
4.37
2.88 26.37 60.13
Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % New Zealand Insurance Fund Equity Region World Non-PIE Fidelity Life Aggressive 3.1661 11.64 12.20 5.02 5.63 Fidelity Life International 2.2366 5.42 11.85 5.31 3.46 New Zealand Insurance Fund Equity Sector Global - Real Estate OneAnswer KiwiSaver-Intl Property 1.2948 12.80 12.87 12.59 8.08 New Zealand Insurance Fund Equity Sector NZ - Real Estate MFL Property Fund 3.4938 11.49 13.50 13.69 494.11 OneAnswer KiwiSaver-Australasian Prpty 1.5727 13.71 13.94 14.80 12.57 New Zealand Insurance Fund Global Bond AMP Prem PSS Blackrock Global Fixed Int 1.86 5.47 5.22 5.21 2.24 AMP Prem PSS PIMCO Global Fixed 2.1295 4.03 4.95 6.80 2.38 Interest AMP Prem PSS SSgA Global Fixed 1.8565 6.68 5.51 5.40 8.90 Int Index Asteron Rtrmnt Savings Plan Intl Fx Int 3.2112 5.17 5.35 5.40 1.17 Asteron Superplan 2000 Global Bond Fund 2.8471 4.32 4.77 4.92 0.98 Asteron Superplan Global Bond Fund 2.6934 4.40 4.77 4.92 1.66 OneAnswer KiwiSaver-Intl Fxd Int 1.5913 6.74 4.87 5.10 2.63 New Zealand Insurance Fund Miscellaneous Westpac KiwiSaver-Capital Protect Plan 1 1.9969 8.38 14.96 11.22 11.73 -Westpac KiwiSaver-Capital Protect Plan 2 1.7927 8.38 14.96 11.23 9.93 -New Zealand Insurance Fund Miscellaneous Non-PIE Fidelity Life Options Portfolio 4.4023 5.32 6.97 5.46 20.11 -New Zealand Insurance Fund Mortgages Non-PIE Fidelity Life Mortgage 3.8866 4.64 3.64 3.19 2.19 -New Zealand Insurance Fund Multisector - Aggressive AMP KiwiSaver LS Aggressive Fund 1.2643 -1.33 8.67 7.50 205.06 AMP PSS DynamicMkts Growth 1.6152 -1.57 8.10 6.99 3.68 AMP PSS Select Growth 1.5161 -1.55 8.23 7.09 30.83 Aon KiwiSaver Russell Lifepoints 2045 7.1965 7.85 13.58 10.74 10.77 Fisher Funds Growth KiwiSaver Fund 1.6464 5.92 12.04 8.12 987.06 Grosvenor KiwiSaver Geared Growth Fund 1.6922 6.62 11.46 7.04 5.34 Grosvenor KiwiSaver High Growth Fund 1.293 6.07 10.86 6.75 130.24 Mercer KiwiSaver High Growth -6.15 12.43 9.62 85.91 Fisher FreedomPlan - Growth 2.48183 3.96 8.85 6.39 7.24 Fisher FuturePlan - Growth 2.48183 3.96 8.85 6.39 73.30 New Zealand Insurance Fund Multisector - Aggressive Non-PIE AMP PRP Dynamic 1.8569 -0.57 7.94 6.00 103.96 New Zealand Insurance Fund Multisector - Balanced AMP KiwiSaver LS Balanced Fund 1.4292 0.90 7.09 6.69 630.55 AMP KiwiSaver LS Moderate Balanced 1.4338 1.71 6.53 6.19 414.03 Fund AMP KiwiSaver Fisher TWO Balanced 1.5415 5.61 8.07 7.11 23.82 AMP PSS DynamicMkts Balanced 1.6831 0.50 6.45 6.10 3.05 AMP PSS Lifesteps Consolidation 1.6305 1.73 6.07 5.71 7.45 AMP PSS Lifesteps Progression 1.6989 0.49 6.54 6.16 3.11 AMP PSS Select Balanced 1.6301 0.49 6.53 6.17 46.75 ANZ KiwiSaver-Balanced 1.5821 8.40 10.58 9.35 1187.45 Aon KiwiSaver ANZ Balanced 21.5969 6.69 10.30 9.22 21.73 Aon KiwiSaver Russell Lifepoints 2025 7.7762 7.78 10.37 9.07 13.40 Aon KiwiSaver Russell Lifepoints Bal 7.7388 8.11 11.61 9.72 54.20 ASB KiwiSaver Scheme's Balanced 1.5126 7.15 10.14 8.36 687.34 Asteron Rtrmnt Savings Plan Mgd Neutral 3.0031 9.55 11.33 9.10 16.40 Asteron Super Yield Managed Fund 15.2145 9.56 11.69 9.17 20.33 Asteron Superplan 2000 Balanced Fund 2.369 8.70 10.78 8.59 10.16 Asteron Superplan Balanced Fund 3.0088 7.89 9.95 7.75 68.12 Grosvenor KiwiSaver Balanced Fund 1.518 6.11 7.42 6.09 294.71 Milford KiwiSaver Balanced 1.76508 10.06 13.57 11.72 80.78 ANZ Default KiwiSaver Scheme-Balanced 1.5173 8.38 9.92 8.90 58.25 OneAnswer KiwiSaver-Balanced 1.6017 8.57 10.69 9.42 368.53 Smartshares Smartkiwi Balanced Fund 1.28466 6.56 8.30 6.33 8.66 Fisher FreedomPlan - Balanced Fund 3.49411 4.54 7.21 6.33 10.99 Fisher FuturePlan - Balanced 3.49411 4.54 7.21 6.33 128.78 Fisher TWO KiwiSaver Scheme-Bal 4210.24771 5.36 8.35 7.30 486.96 Westpac KiwiSaver-Balanced Fund 1.5137 7.16 10.08 8.76 873.74 Westpac Retirement Plan - Balanced Port 3.2093 5.97 8.83 7.48 100.65 New Zealand Insurance Fund Multisector - Balanced Non-PIE Fidelity Life Balanced 3.9958 5.69 7.41 5.45 167.80 Fidelity Life Ethical Portfolio 2.8999 9.80 9.97 6.83 0.99 New Zealand Insurance Fund Multisector - Conservative AMP KiwiSaver Default (Default) 1.4673 3.97 5.41 4.98 1192.72 Name
Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % AMP PSS Select Income 1.686 6.00 3.24 4.25 2.21 ANZ KiwiSaver-Conservative 1.5261 7.17 6.79 6.56 489.25 Aon KiwiSaver Russell Lifepoints Cnsrv 8.5143 7.60 7.81 7.76 76.12 ASB KiwiSaver Scheme's Cnsrv (Default) 1.5392 5.79 5.95 5.62 2806.91 Fisher Funds Conservative KiwiSaver Fund 1.411 6.41 6.98 6.41 360.96 Mercer KiwiSaver Conservative (Default) -6.20 7.08 6.39 929.57 ANZ Default KiwiSaver Scheme Cnsrv(Dflt) 1.5508 6.57 6.60 6.60 914.40 OneAnswer KiwiSaver-Conservative 1.5402 7.15 6.81 6.59 356.68 Smartshares Smartkiwi Conservative Fund 1.45278 4.60 6.20 5.39 3.96 Fisher FuturePlan - Capital Prot 1.18244 1.50 1.52 1.72 27.21 Fisher TWO KiwiSaver Cash 1.53362 6.02 6.00 5.95 614.94 Enhanced(Dflt) New Zealand Insurance Fund Multisector - Conservative Non-PIE Fidelity Life Conservative 4.1818 6.21 5.59 4.84 84.26 -New Zealand Insurance Fund Multisector - Growth AMP KiwiSaver LS Growth Fund 1.3185 -0.56 8.02 7.13 469.32 AMP KiwiSaver ANZ Balanced Plus 1.7283 7.57 11.07 9.95 147.89 AMP KiwiSaver Nikko AM Balanced 1.5295 9.74 10.83 8.61 21.93 AMP PSS Lifesteps Growth 1.6256 -0.78 7.55 6.73 0.83 ANZ KiwiSaver-Balanced Growth 1.5895 8.97 12.47 10.63 982.71 ANZ KiwiSaver-Growth 1.5802 9.18 14.18 11.82 1658.95 Aon KiwiSaver Russell Lifepoints 2035 7.5268 8.03 12.14 10.01 11.20 Aon KiwiSaver Russell Lifepoints Growth 7.5647 8.12 13.08 10.52 22.91 Aon KiwiSaver Nikko AM Balanced 15.6288 8.95 10.74 8.46 5.60 ASB KiwiSaver Scheme's Growth 1.4585 7.21 12.10 9.43 701.33 Asteron Rtrmnt Savings Plan Mgd Growth 3.0015 10.34 13.12 9.96 29.81 Asteron Superplan 2000 Dynamic Fund 2.324 9.25 12.21 9.22 2.54 Asteron Superplan Dynamic Fund 2.6376 8.43 11.60 8.52 20.76 Forsyth Barr KiwiSaver Balanced Port 1.4712 9.89 8.33 6.60 14.51 Grosvenor KiwiSaver Balanced Growth 1.462 6.35 9.05 6.44 145.94 ANZ Default KiwiSaver Scheme1.4985 8.93 11.62 10.02 68.45 Balanced Gr ANZ Default KiwiSaver Scheme-Growth 1.4741 9.14 13.26 11.09 56.01 SIL 60s + Sup Balanced Fund 3.6709 8.26 11.45 9.96 18.13 SIL Balanced Plus 3.6709 8.26 11.45 9.96 79.30 OneAnswer KiwiSaver-Balanced Growth 1.6103 8.97 12.55 10.73 335.47 OneAnswer KiwiSaver-Growth Fund 1.5983 9.31 14.28 11.90 243.93 Staples Rodway KiwiSaver Balanced -8.02 11.43 10.20 22.78 Staples Rodway KiwiSaver Growth -9.08 11.14 9.11 11.34 Westpac KiwiSaver-Growth Fund 1.5258 7.86 12.00 10.12 562.87 Westpac Retirement Plan - Dynamic Port 3.5585 6.72 10.81 9.03 104.01 New Zealand Insurance Fund Multisector - Growth Non-PIE Fidelity Life Growth 3.7858 6.01 9.25 5.96 62.10 New Zealand Insurance Fund Multisector - Moderate AMP KiwiSaver LS Conservative Fund 1.5669 3.18 5.04 5.26 249.03 AMP KiwiSaver LS Moderate Fund 1.4827 2.13 5.81 5.72 289.03 AMP PSS DynamicMkts Conservative 1.6848 2.59 4.24 4.52 0.97 AMP PSS Lifesteps Maturity 1.6094 2.76 4.34 4.58 2.91 AMP PSS Lifesteps Stability 1.6677 1.72 5.12 5.13 5.33 AMP PSS Select Conservative 1.6759 2.62 4.30 4.56 10.46 ANZ KiwiSaver-Conservative Balanced 1.5625 7.85 8.74 8.04 567.08 Aon KiwiSaver Russell Lifepoints 2015 8.1322 7.58 8.40 8.05 5.04 Aon KiwiSaver Russell Lifepoints Mod 8.2224 7.77 9.67 8.74 15.28 ASB KiwiSaver Scheme's Moderate 1.5413 6.68 7.88 6.98 901.16 Asteron Rtrmnt Savings Plan Mgd Conserv 2.8758 8.20 8.32 7.52 2.55 Asteron Superplan 2000 Conservative Fund 2.3285 7.43 7.75 7.03 3.04 Asteron Superplan Conservative Fund 2.5637 6.50 6.87 6.14 5.65 Grosvenor KiwiSaver Conservative Fund 1.5152 5.87 5.11 5.53 108.23 ANZ Default KiwiSaver Scheme-Cnsrv Bal 1.5368 7.81 8.28 7.79 20.46 OneAnswer KiwiSaver-Conservative Bal 1.5767 7.74 8.74 8.07 123.03 Fisher TWO KiwiSaver Scheme-Cnsrv 1.59018 5.89 6.36 6.21 106.99 Westpac KiwiSaver-Conservative Fund 1.4979 5.87 6.49 6.44 1742.71 New Zealand Insurance Fund NZ Bonds AMP Prem PSS OnePath NZ Fixed Interest 1.7756 8.39 3.58 5.51 2.32 Asteron Rtrmnt Savings Plan NZ Fixed Int 3.0726 8.50 4.95 6.19 1.47 Asteron Superplan 2000 NZ Bond Fund 2.6424 7.81 4.53 5.78 1.39 Asteron Superplan NZ Bond Fund 3.3743 7.86 4.54 5.81 6.73 SIL 60s + Sup NZ Fixed Interest 2.763 8.10 3.34 5.11 2.98 OneAnswer KiwiSaver-NZ Fixed Interest 1.5592 8.88 3.97 5.67 5.65 SIL NZ Fixed Interest 2.763 8.10 3.34 5.11 6.37 Westpac Retirement Plan - Accum Port 3.1649 3.36 2.58 2.92 18.71 Name
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Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price % New Zealand Insurance Fund NZ Bonds Non-PIE Fidelity Life NZ Fixed Interest 3.8385 5.34 3.61 3.82 0.57 New Zealand Insurance Fund Unlisted and Direct Property - NZ Asteron Rtrmnt Savings Plan NZ Property 4.3926 ---- 1.14 -Fisher FreedomPlan - Property Fund 4.45255 10.26 10.43 7.01 0.91 -Fisher FuturePlan - Property 4.45255 10.26 10.43 7.01 7.98 -New Zealand OE Cash AMP Capital Cash Advantage Fund 1.37875 3.32 3.40 3.49 221.99 -AMP Capital NZ Cash Fund 1.62418 3.73 3.43 3.46 3949.54 -AMP Prem PUT OnePath NZ Cash 1.3438 3.30 3.02 3.02 3.49 -AMP PUT Select Cash 1.291 3.10 2.79 2.78 3.64 -ASB Cash Fund -3.06 3.14 3.18 383.50 -Fisher Cashplus Fund 1.255 3.10 2.72 2.65 24.48 -New Zealand OE Cash Non-PIE AMP UT NZ Cash 1.7773 1.85 1.77 1.80 1.71 -New Zealand OE Equity Region Asia Pacific Non-PIE AMP UT Asian Shares 1.8406 17.19 13.43 6.63 1.39 -New Zealand OE Equity Region Australasia Devon Alpha Fund 1.5201 3.18 16.38 10.99 98.20 Devon Trans-Tasman Fund 3.2422 4.99 14.86 10.27 116.81 Harbour Australasian Equity 1.769 2.14 14.41 11.55 111.64 Milford Active Growth 2.66363 10.40 15.44 14.41 661.21 Milford Trans-Tasman 1.87644 3.75 12.12 12.32 221.89 Mint Australia NZ Active Equity 2.0588 9.80 18.68 15.75 46.67 OneAnswer SAC Equity Selection 1.9018 -2.26 11.67 11.23 18.25 Blueprint Australasian Shares 0.0126 ---- 0.15 -Pie Australasian Growth Fund 4.3641 12.40 19.71 22.96 72.22 Nikko AM Concentrated Equity 1.6458 21.36 17.57 11.84 5.17 Nikko AM Australasian Small Companies 1.6707 6.96 12.27 7.53 1.11 New Zealand OE Equity Region Australia AMP Capital Australian Share Fund 2.18655 -2.87 4.43 2.33 24.64 Devon Australian 1.2151 4.12 11.35 6.00 43.28 Fisher Funds Australian Growth Fund 2.7911 3.94 5.51 3.34 56.54 Fisher Funds Premium Australian Fund 1.2217 4.07 5.77 3.61 43.21 OneAnswer SAC Australian Share 3.502 -4.04 5.67 2.81 34.34 New Zealand OE Equity Region Australia Non-PIE AMP UT Australian Shares 2.3131 -0.49 4.50 1.95 1.42 -New Zealand OE Equity Region NZ AMP Capital NZ Shares Fund 2.33318 7.53 14.31 13.29 476.29 AMP Capital Strategic NZ Shares Fund 2.08264 9.86 14.99 12.84 150.82 Fisher Funds NZ Growth Fund 5.9245 2.72 13.03 14.71 121.13 Fisher Funds Premium New Zealand Fund 1.3921 3.30 13.15 14.99 54.03 OneAnswer SAC NZ Share 3.4546 2.98 14.07 13.20 92.54 Fisher Trans Tasman Equity Trust 3.9409 5.07 10.83 10.64 46.93 Nikko AM Core Equity 1.5586 8.72 15.57 12.54 15.92 New Zealand OE Equity Region NZ Non-PIE AMP UT NZ Shares 2.9098 4.43 11.44 10.05 2.65 New Zealand OE Equity Region World AMP Capital Core Global Shares Fund 1.22867 14.69 18.45 10.79 698.52 AMP Capital Core Hedged Global 1.17647 -4.77 11.90 10.84 407.50 Shares Fd AMP Capital Emerging Markets Share 0.92298 -3.82 4.45 1.81 74.30 AMP Capital Global Shares Fund 2.26779 2.75 13.87 10.30 138.23 AMP Capital Resp Invest Leaders Gl Sh 1.37698 -0.31 12.67 9.20 47.90 AMP Prem PUT FD Intl Share Fund 1 Value 1.2213 10.89 16.59 8.72 2.45 AMP Prem PUT FD Intl Share Fund 1.3357 18.44 17.63 10.42 2.24 3 Growth AMP Prem PUT SSgA Global Shares Index 1.6344 15.19 17.80 10.91 4.85 AMP Prem PUT SSgA Global Shares 1.9529 3.07 14.93 12.55 5.31 IndexHdg ASB EasyFund World Shares Fund 1.3301 7.75 15.05 10.39 186.96 Elevation Capital Value Fund 1.4552 7.75 13.26 7.07 21.60 Fisher Funds International Growth Fund 1.5889 10.11 13.33 5.66 27.85 Fisher Funds Premium International Fund 1.644 11.42 14.04 6.18 55.66 OneAnswer SAC International Share 1.7621 21.49 21.61 14.67 136.74 Fisher Global Fund 4.535 -0.52 10.26 6.26 91.34 New Zealand OE Equity Sector Global - Real Estate AMP Capital Global Propty Securities Fd 1.51651 15.11 14.06 13.88 117.56 ASB EasyFund Global Property Fund 1.2771 19.06 13.74 11.37 92.28 New Zealand OE Equity Sector NZ - Real Estate Name
Latest 1 Yr Transaction Return Exit Price % AMP Capital Listed Property Secs Fd 2.20789 15.10 Mint Australia NZ Real Estate Investment 1.5852 13.08 OneAnswer SAC Property Securities 2.7659 13.62 New Zealand OE Global Bond AMP Capital Hdgd Gbl Fixed Intrst Fund 2.19603 5.19 AMP Prem PUT Blackrock Global Fixed Int 1.7299 5.27 AMP Prem PUT PIMCO Global Fixed 2.1337 3.87 Interest AMP Prem PUT SSgA Global Fixed 1.7215 6.47 Int Index ASB EasyFund World Fixed Interest Trust 1.0842 3.70 Fisher BondPlus Fund 2.0169 4.14 New Zealand OE Miscellaneous Fisher Funds Property and Infrastructure 1.7988 5.88 Pathfinder Commodity Plus Fund 0.9276 -0.09 Nikko AM Income 1.2358 8.14 New Zealand OE Mortgages Westpac Home Loan Trust 1 3.25 Westpac Mortgage Investment Fund 1 3.36 New Zealand OE Multisector - Aggressive AMP Capital Growth Fund 2.25164 0.14 AMP PUT DynamicMkts Growth 1.6455 -1.40 AMP PUT Select Growth 1.4529 -1.58 New Zealand OE Multisector - Aggressive Non-PIE AMP UT Dynamic 1.953 -2.14 New Zealand OE Multisector - Balanced AMP PUT DynamicMkts Balanced 1.6651 0.55 AMP PUT Select Balanced 1.5719 0.49 ANZ Invmt Fds Balanced 1.5526 7.96 ASB EasyFund Balanced 1.3871 6.56 Milford Balanced 1.74092 9.64 Westpac Active Balanced Trust 1.9194 6.57 New Zealand OE Multisector - Balanced Non-PIE AMP UT Balanced 2.0869 0.09 AMP UT Balanced - Other 1.8017 -0.20 New Zealand OE Multisector - Conservative AMP PUT Select Income 1.5755 6.21 ANZ Invmt Fds Conservative 1.3925 6.82 ASB EasyFund Defensive 1.4477 5.15 New Zealand OE Multisector - Growth ANZ Invmt Fds Balanced Growth 1.6461 8.58 ANZ Invmt Fds Growth 1.7123 8.81 ASB EasyFund Growth 1.3202 6.57 OneAnswer SAC Balanced 2.6262 8.49 Fisher Multi Sector Fund 2.8011 4.75 Westpac Active Growth Trust 1.8372 7.22 New Zealand OE Multisector - Growth Non-PIE AMP PMF - Active Growth 2.065 -0.79 AMP UT Legg Mason Balanced 1.566 3.33 New Zealand OE Multisector - Moderate AMP Capital Conservative Fund NZ 2.21794 3.92 AMP PUT DynamicMkts Conservative 1.6376 2.80 AMP PUT Select Conservative 1.6505 2.59 ANZ Invmt Fds Conservative Balanced 1.4738 7.46 ASB EasyFund Conservative 1.4237 5.81 ASB EasyFund Moderate 1.4218 6.09 Milford Diversified Income 1.47741 10.08 Westpac Active Conservative Trust 1.714 5.12 New Zealand OE Multisector - Moderate Non-PIE AMP PMF - Balanced 2.3801 0.30 AMP UT Conservative 2.0213 2.10 New Zealand OE NZ Bonds AMP Capital NZ Fixed Interest Fund 1.64522 8.68 AMP Capital NZ Short Duration 1.24139 6.26 AMP Prem PUT OnePath NZ Fixed Interest 1.6599 8.33 Harbour NZ Corporate Bond 1.0551 7.19 OneAnswer SAC NZ Fixed Interest 1.5641 8.74 Nikko AM NZ Corporate Bond 1.1423 8.51 Name
3 Yr 5 Yr Size Morningstar Rating Return Return $M Overall 13.39 14.72 17.53 12.36 13.02 45.28 13.68 14.56 122.09 5.14 5.04
5.10 129.66 5.04 1.32
5.04
6.83
2.84
5.43
5.36
4.50
3.16 4.78
3.63 13.60 6.66 127.44
13.00 8.97 52.39 -4.00 -1.24 62.42 6.90 7.04 5.83
----
2.71 2.83
2.56 91.85 2.66 129.80
---
8.82 8.15 8.15
7.74 6.39 7.01 3.39 7.03 12.74
7.88
6.58
8.24
6.44 6.45 10.28 9.53 13.16 9.80
6.05 6.09 9.00 7.73 11.45 8.22
4.69 35.90 132.30 111.35 306.73 146.99
6.18 6.05
5.69 13.55 5.61 0.62
3.27 6.52 5.32
4.27 3.13 6.29 37.04 4.98 117.91
12.22 13.84 11.41 11.56 7.71 11.62
10.39 11.44 8.72 10.14 7.11 9.53
5.24 7.65
4.02 15.97 4.52 1.57
5.02 4.23 4.28 8.34 6.22 7.28 12.57 5.78
5.24 4.49 4.53 7.66 5.63 6.37 12.37 5.55
4.19 3.89
3.64 32.05 4.11 0.86
4.51 4.68 3.51 5.17 3.59 5.97
5.92 4.47 5.43 5.61 5.21 6.57
Name
Latest 1 Yr 3 Yr 5 Yr Size Morningstar Transaction Return Return Rating Return $M Overall Exit Price %
New Zealand OE NZ Bonds Non-PIE AMP UT NZ Fixed Interest 1.8518 5.35 2.47 3.59 0.60 New Zealand OE Equity Sector NZ - Real Estate AMP Capital NZ Property Fund 1.94658 5.78 8.97 7.00 122.81 -New Zealand OE Unlisted and Direct Property - NZ Non-PIE AMP UT NZ Property 1.5855 4.73 7.27 5.73 1.71 --
Returns are calculated to 30/09/15 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.com.au © 2015 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 general advice and has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Limited (subsidiaries 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 Product Disclosure Statement (in respect of Australian products) or Investment Statement (in respect of New Zealand products) before making any decision to invest. Neither Morningstar, nor Morningstar’s subsidiaries, 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. Please refer to our Financial Services Guide (FSG) for more information www.morningstar.com.au/fsg.asp
110.90 49.34 24.67 50.45 11.00 60.76
10.36 1.96 15.60 111.12 429.72 177.57 1160.50 147.94
1789.03 210.78 1.93 234.95 10.17 134.57
033
DATA
{ INVESTMENT }
KiwiSaver examined Treasury released a report examining KiwiSaver fund manager market dynamics and the allocation of assets. It found returns to members had not outperformed benchmarks and the portfolio of KiwiSaver
assets was heavily weighted towards income assets, rather than growth. The Government contribution in KiwiSaver member balances was found to be significant. The report noted banks have a large portion
of the market and its authors said the impact of that on things such as fees should be monitored.
KIWISAVER ASSETS UNDER MANAGEMENT SHARE PER PROVIDER 2007 – 2014
ASSET ALLOCATION AS AT JUNE 30, 2014: