NZ Funds sets up wealth management business
NZ Funds is setting up its own financial advisory business, NZ Funds Private Wealth, and started acquiring planning firms.
Thursday, April 21st 2011, 9:53AM 
8 Comments
This is a major change for the company which has, for the past 22 years, been focused almost exclusively on serving independently owned financial advisory businesses.
Increasingly, NZ Funds have found that the needs of the owners of those advisory firms have shifted toward requiring a succession plan, either today or in the foreseeable future. The advent of the new regulatory regime has dramatically accelerated that trend.
"In order to best meet our advisory clients' succession goals, the most logical solution was to build an advisory business which we owned and operated. This business will be known as NZ Funds Private Wealth and launches on May 1," NZ Funds chief executive Richard James says.
Craig Myles has joined NZ Funds and will lead the new business.
"Craig has been the CEO of the leading South Island advisory business Myles Wealth Management for the last decade.
Myles Wealth Management's stand-out performance during an extraordinarily difficult period in financial markets singled him out as the person we wanted to lead our Private Wealth business," James says.
NZ Funds Private Wealth will launch initially with offices in Wellington and Auckland. NZ Funds Private Wealth has already completed the acquisition of the financial advisory businesses of Financial Fitness and Stewart and Associates. The retiring principals of these respective businesses, Craig Wylie and Barry Stewart are both well known and respected members of the financial advisory industry and longstanding clients of NZ Funds.
NZ Funds Private Wealth is currently in discussion with a number of other financial advisory firms across the country with a view to shaping customised succession plans for the owners of those firms.
NZ Funds Private Wealth chief executive Craig Myles says he expects the business to have in excess of $200m under advice by calendar year end.
Myles believes that "the future of the small one or two person advisory business is deeply challenged" He believes that the financial, human and technological capabilities required to compete effectively is already now beyond the scope of most existing advisory firms.
He says "even with the full weight of NZ Funds behind us the programme of development work that NZ Funds Private Wealth is committed to is daunting, to say the least. We are however working on a number of initiatives that the New Zealand wealth management sector has never previously delivered, and that is the challenge that I was attracted to".
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To Traveller, we are in the business of managing money so we sure hope it
increases our funds under management! The product selection will be the range of fourteen portfolios we currently manage, which include assets managed by around 15 different external managers, and a large number of those fourteen portfolios have recently been thoroughly researched and commended by LONSEC. The portfolios are all purpose built to be used in an integrated way with a goals driven advice process.
With respect to Barrie and Paul, in order to have lost one third of your/your clients capital you must have had your entire capital invested in the Super Yield fund - which has been the worst performing investment vehicle we have offerred in our twenty year history and one which has caused (and still does) both us and our investors intense pain. However, if you had your entire capital invested in that vehicle then you did so against our specific asset allocation guidelines(allured no doubt by the strong yield during the first five years of its existence)and you must have ignored the multiple opportunities we offerred for investors to switch out of or exit that fund during the first twelve months of the financial crisis (both of the funds offerred as switch alternatives have performed strongly in the ensuing period). Incidentally the management fee on the Super Yield fund was 1.34%, so it was by no means exhorbitant and we do not ever extract any money from clients accounts. Only advisers extract money from clients accounts and as such one has to ask why an adviser was being paid to have a clients entire capital invested in one fund.
We will stand up and front up on our performance both when it is strong and when it is poor, and we expect the advisers we work to display a similar willingness to accountability.
I am always available on richard.james@nzfunds.co.nz if there is any aspect of what our firm is doing that you wish to discuss or understand better.
I am an investor not advisor as the others are but I suffered from being invested in such supposed low risk cash funds you talk of through another company, who incidently no longer exists, but the fund was managed by your crowd, it was called cash plus fund. I was returned under half my captial which was then invested into another product under advice which subsequently froze and i stand to lose over half of that.
My advisor at the time put the blame squarely on the manager, yourselves, possibly passing the buck but all the same a horrid experience.
Whilst I sympathize with the efficient asset gathering activities of groups such as NZ Funds, it would be great to see a group announce something that puts the investor at the centre of the equation.
My appeal to Dominic (and other investors) is to increase your commentary – and hopefully the industry will start listening to what is also important to you.
Can NZ Funds supply any information on returns investors received with Money Managers under their stewardship?
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