KiwiSaver members expected to get more hands-on

Craigs Investment Partners is reporting solid growth in its KiwiSaver scheme that allows investors to select their own investments.

Wednesday, September 23rd 2015, 6:00AM

by Susan Edmunds

KiwiSTART Select is a platform that offers a range of 250 nominated securities from which clients can construct their own KiwiSaver portfolios.

Nominated securities include QuayStreet Unit Trusts and a range of investments in equities, investment trusts, managed funds, index funds and listed property trusts as well as cash.

The scheme returned 12.3% in the year to March 31 on a n aggregated basis but each member’s portfolio delivered different returns.

There were 4379 members in the scheme at the end of the 2015 financial year, compared to 4500 in Craigs’ more standard KiwiSaver scheme.

It had 216 new members over the year, including 36 transferring from an Australian scheme.

It charges an admin fee of $30 per year, and up to 1.25% for investments in self-selected portfolios.

Craigs Investment Partners head of client services Stephen Jonas said the investment selection idea was in line with Craigs’ philosophical approach.

He said the objective was for the platform to be as agnostic as possible and operate on an almost self-managed basis.

But he said there were regulatory challenges to overcome. The Financial Markets Act requires a PDS including a risk indicator, which is hard to deduce if individuals’ investments are not known.

Jonas said the solution would probably be to describe it as a high-isk fund.

He said he expected interest to grow in DIY approaches as balances increased. The average balance of KiwiSTART Select members is higher than the industry generally, at almost $30,000.

There is no minimum balance required but every client has an AFA associated with them and those with very small balances are guided into managed funds as a way to get started. “As balances get larger they can start to enrich them.”

Jonas said he expected other similar products to launch. “In Australia just under 30% of super scheme investments are self-managed so there is a trend, when the market gets more mature more will step into that space.”

Tags: Craigs Investment Partners KiwiSaver