KiwiSaver

In the latest amendment to its prospectus Asteron has strongly signaled it may soon close its KiwiSaver fund.

The prospectus amendment, dated April 1 this year, says the Suncorp-owned fund manager and insurer, “regularly reviews its business operations in the light of market developments”.

“In particular, over the 12 months preceding the date this prospectus was amended Asteron has monitored the evolution of the KiwiSaver market and conducted an ongoing assessment of the opportunities that exist within that market,” the amended prospectus says. “While no decision has been made to do so, it is possible that Asteron may make a decision in the future to exit KiwiSaver.”

If Asteron shuts down its KiwiSaver scheme, it would be only the third to do so, after the Australian-owned Eosaver and the union-backed IRIS KiwiSaver schemes closed last year.

According to the Workplace Savings NZ (formerly ASFONZ) website, as at March 31 this year, the Asteron scheme claimed 6,604 members and $35.58 million in funds under management.

The Asteron KiwiSaver scheme was also hit by exposure to the Guardian CashPlus Fund, which was forced to restructure in December 2008 after mortgage components of the fund were frozen.

Subsequently, the Guardian CashPlus Fund was split with the mortgage investments shunted into the Guardian CashPlus Mortgage Units Fund.

The CashPlus Fund, which held the remaining liquid assets, was renamed the Guardian Cash Fund on December 21 last year.

According to the Asteron KiwiSaver prospectus, as at June 30 last year approximately 16% of the Asteron KiwiSaver Capital Fund was invested in the CashPlus Mortgage Units Fund.

By April 1 this year about half of the original $239,456 invested by the Asteron Capital Fund into the CashPlus Mortgage Units Fund had been repaid, the prospectus says.

At June 30 last year, three other Asteron KiwiSaver funds – Conservative, Balanced and Balanced Growth – had collectively invested about $135,000 in the CashPlus Mortgage Units Fund.

Sean Carroll, head of Suncorp NZ, was not available for comment at presstime.

 

Huljich Wealth Management has re-launched two of its non-KiwiSaver funds which were closed down in January and transferred to equivalent funds.

A new prospectus for the Huljich Balanced Fund and the Huljich Australasian Fund was lodged with the Companies Office on March 31 and became public last week.

Both the funds were initially launched in October 2007 just before the global financial crisis hit, but they haven’t been marketed to the public since early 2008.

The funds, which invest in the same assets as the KiwiSaver funds, have instead kept going in the background with private investors.

Huljich Wealth Management (HWM) says there was a question about the old funds qualifying for PIE status because they had been closed to the public and did not meet some of the eligibility criteria.

“Our tax advisers said it was a grey area and together we decided we couldn’t take the risk of building up these funds with investors’ money and then having a PIE tax problem down the line.

“It has cost us some extra money to close the funds and start new ones but we wanted to be 100% sure the funds were PIE compliant and eligible for those tax advantages for our investors.”

The new prospectus also has mention of the Securities Commission investigation into HWM on page 18.

Peter Huljich stepped down as managing director and chief investment officer of Huljich Wealth Management last month after topping up the performance of his funds. He has since been replaced by chairman Don Brash.

The new prospectus states: “Following certain media comments about the Huljich KiwiSaver Scheme the manager (and the trustee of that scheme) have been asked to respond to inquiries from the Government Actuary and the Securities Commission relating to the compensation made by Peter Huljich (the manager’s former managing director) to the KiwiSaver funds.

“The manager believes that such inquiries can be adequately addressed without effect on the managed funds, however at the date of this prospectus the matters have not yet been resolved.”

 

Milford Asset Management will go it alone as a KiwiSaver provider, with its new scheme due to launch on April 1.

Milford, which to date has marketed a KiwiSaver product via the Aonsaver platform, will offer members two investment options in the revamped scheme – its Aggressive Fund and a new balanced fund.

Currently, Milford only offers its Aggressive Fund to KiwiSaver investors on Aonsaver, sourcing about $16 million in funds under management through the platform.

In total, Milford manages just over $570 million.

A spokesperson for AonSaver, confirmed the Milford KiwiSaver scheme would no longer be offered through its administrative system. However, the Milford Aggressive Fund would remain as an investment option on both the Aonsaver retail and employer schemes, the spokesperson said.

“Milford said the dual branding [of its KiwiSaver scheme] with Aonsaver was a little bit confusing for investors,” the Aonsaver spokesperson said.

Milford’s new KiwiSaver scheme will be administered by Trustee Executors.

However, at least two new potential KiwiSaver managers were rumoured to be in talks with Aonsaver to include schemes on the firm’s platform.

The Auckland-based boutique manager Milford has been in an expansive mood of late after scoring a $50 million New Zealand equities mandate from the New Zealand Superannuation Fund in January.

Earlier this month Milford bought almost 17% of listed investment company Salvus Strategic Investments from exiting major shareholder, Anthony Hubbard, majority owner of South Canterbury Finance.

Milford was expected to be officially registered as a KiwiSaver provider with the Government Actuary within days, the first new scheme to do so since 2008. It is understood that KiwiBank, which formerly distributed the Mercer scheme, was also close to finalising its new KiwiSaver offering.

 

The Securities Commission has taken a veiled swipe at Huljich Wealth Management in its guidelines for distribution and disclosure released yesterday.

The market regulator wagged its finger over the signing up of KiwiSaver members through door-to-door sales, something that got Huljich in trouble last year, and also stressed the need for disclosure statements to indicate the actual performance of the fund, saying it “regards transactions with related parties on other than arms length terms as questionable behaviour.”

Peter Huljich was forced to step down as managing director and chief investment officer of Huljich Wealth Management after topping up the performance of his funds, which prompted an investigation by the Securities Commission.

The commission’s guidelines also noted company directors “bear the ultimate responsibility for the documents they sign or approve and must ensure that any reliance on third parties is reasonable and justifiable.” Huljich directors Don Brash, who took over as managing director after Peter Huljich stood aside, and John Banks were criticised for failing to question the top-ups to the KiwiSaver funds.

“The commission has become aware of a number of circumstances where KiwiSaver membership has been solicited in an unusual or confusing manger,” chairman Jane Diplock said in a statement. “This type of behaviour is completely unacceptable and damaging to investor confidence.”

The guidelines also called for industry to set a standard to measure investment performance, and will recommend legislation if this is not achieved.

The Investment Savings and Insurance Association supports the guidelines, with chief executive Vance Arkinstall saying the ISI is already working on setting a standard for measurement and disclosure of funds’ performance, and will discuss the outcome with the regulator.

Arkinstall reinforced the commission’s criticism of funds trying to hold on to members looking to swap providers, saying “such action is creating delays which are contrary to the intention, flexibility and choice provided by the KiwiSaver Act.”