I have been writing this column for more than three years now; at times I have worried that finding topics that are relevant and of interest may become more difficult as time goes on. However, ‘the world’ always seems to deliver up new topics. This month’s subject is a matter that I would rather not be commenting on, but given recent newspaper headlines, the topic of trust is very much the ‘elephant in the room’. I suspect that it is one of life’s truisms, that in any profession where trust is given that trust will sometimes be abused. Sadly, my profession is no different. Given that this is a reality, I thought it would be helpful to consider what questions you should ask a prospective adviser (or your existing adviser) about their money handling and organisational procedures. 1 Who holds the ownership of the investments? The separation of roles and responsibilities plays an important part in protecting your money against fraud. In pooled...

NZ Funds Media Release 7 June 2019 Auckland, New Zealand – “We are thrilled that from next year all KiwiSaver providers will be required to join NZ Funds in projecting member balances at retirement” says Geoff Motion. NZ Funds first included retirement savings projections in 2018. “When we entered the KiwiSaver market in 2011, we drew on our then twenty-year heritage of managing New Zealanders wealth to shape the service we offered. We initially called it a service, because we have learned the hard way that sharp products rarely deliver clients what they hope” says Motion. Motion points to the fact that NZ Funds KiwiSaver Scheme member balances are now 1.5x the national average.* “To the best of our ability, as it’s a difficult thing to attribute properly, we do not think this is because our clients are wealthier. Neither is it due to returns, while clients have earned above average returns after fees by our assessment, that has made very little difference.” The big...

One of the things that has made KiwiSaver successful is that it is refreshingly free from the hooks and barbs of hidden charges that have traditionally bedevilled the investment industry. Or so one would hope. Unfortunately, old practices die hard. All schemes must follow the same set of modern, competitive rules. Fees are regulated and transparent, and disclosed in a way that enables easy comparison. Right? Wrong! In Asset Magazine’s April issue, we revealed that one KiwiSaver manager was using a publicly issued income fund to provide a related party loan in order to leverage its KiwiSaver fund. This month we raise the curtain on exit fees. What is an Exit Fee? An exit fee or redemption fee is a charge imposed on an investor who wants to switch KiwiSaver schemes. In the old unit trusts’ world this was called a back-end loaded fund. Regardless of the terminology, the effect of an exit fee is that it reduces the value of your KiwiSaver if you wish to withdraw or switch. ...