Mike Pero Mortgages has ended its KiwiSaver distribution deal with Huljich Wealth Management, though the company has been tight lipped on the reasons for the move.
“All I can say is there are commercial reasons for us not distributing that product and that’s as far as I’d like to go on that,” said Shaun Riley, the Mike Pero Mortgages chief executive.
“At this time I don’t want to expand on this at all.”
Speculation for the move has centred on new regulations under the Financial Advisers Act and the admission from Huljich’s former managing director, Peter Huljich, that he used his own money to prop up Huljich funds – thus distorting their returns.
Under the Act, distribution of KiwiSaver through mortgage brokers may become uneconomic as only Authorised Financial Advisers can advise on KiwiSaver products, while mortgage brokers don’t require AFA authorisation.
However, this argument was dismissed by one of the Mike Pero brokers Good Returns spoke to.
The broker – who like several others spoke on the condition of anonymity – said they were studying for Level 5 authorisation and that to qualify to give KiwiSaver advice would be “no more cost than what we’re doing now.”
Other brokers were keen to stress that no official explanation had been forthcoming, but several believe allegations against Huljich regarding fund transations was behind the decision.
One said Mike Pero was a good brand and he believed the company would “hate to see that damaged” by association.
The Huljich KiwiSaver scheme was distributed through the Mike Pero Saver brand which was closed on January 16, with membership reverting to the Huljich brand.