My Fiduciary is moving to PIE-only portfolio recommendations
My Fiduciary is moving to PIE (portfolio investment entity) only portfolio recommendations in light of the trustee tax rate rising to 39% from April 1 to align it with the top personal tax rate.
Wednesday, February 7th 2024, 4:56PM
by Jenny Ruth
The tax rate investors pay when they invest in PIEs is capped at 28%, the same as the corporate tax rate.
My Fiduciary, which provides asset management advice to financial advisers, charities and Maori organisations, launched PIE-only model portfolios for advisers last year, although changes should be made only from April 1, the start of the next tax year, says director Chris Douglas.
It made a number of changes to the underlying managers within the company's other model portfolios and is moving away from using Australian unit trusts, Douglas says.
“We have been quite active within client portfolios,” he says.
This also reflects a number of changes in the New Zealand market.
“We now have some very good local options that we didn't have a few years ago.”
This includes both passive and active solutions – a number of active managers have launched NZ PIE funds and some fixed interest managers have done so as well.
“There's just more choice now where you can get very good PIE options.”
This doesn't apply to all asset classes, though. Those who want more differentiation and to invest in alternative assets probably still need to use an offshore fund, Douglas says.
Depending on a client's tax and current income status, Australian unit trusts may still be useful, and some might prefer that flexibility, he says.
| « Trustees seeking refuge in PIEs could weaken our capital markets | Fake adviser gets mixed sentence » |
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