Fidelity KiwiSaver sale rumoured

Grosvenor says it has no comment to make on reports today that it has bought Fidelity Life’s KiwiSaver business.

“You shouldn’t listen to rumours,” a spokesman said.

It has been reported that a deal was done on Tuesday between the two businesses.

Fidelity Life has $244 million in KiwiSaver FUM and bought the Tower life insurance business in May.

It already has links to Grosvenor via TriMax, a life insurance joint venture.

Fidelity Life chief executive Milton Jennings could not be reached for comment.

Many Camelot advisers deal with Grosvenor’s existing KiwiSaver scheme, which has $191 million FUM.

KiwiSaver boosting property sales

More than 10,000 first-home buyers used their KiwiSaver savings to put down a deposit on a house in the year to March.

That’s about twice the 5737 who did so in the year to March 2012.

The total amount withdrawn from KiwiSaver accounts for first-home deposits was $120.2 million, eight times as much a was withdrawn in 2011.

Housing Minister Nick Smith the scheme was making home ownership more achievable. It reached its sixth anniversary at the weekend.

“My message to young people aspiring to own their own home is that KiwiSaver works. It is a very positive result that to date the initiative has provided $217.6m of people’s own savings and government grants towards the purchase of a first home.”

New rules, from tomorrow, require KiwiSaver providers to use consistent reporting methods to make it easier for savers to compare  schemes and boost investor confidence.

Commerce Minister Craig Foss said: “KiwiSaver schemes will have to report on fund performance, fees, asset allocation and other matters in a simple and standardised form. KiwiSaver providers will also need to publish the information in a consistent dataset that can be easily accessed.”

The first of the new statements will be published in October.

KiwiSaver schemes under scrutiny

The FMA still isn’t saying which two KiwiSaver schemes were asked to change potentially misleading statements to investors or face court action.

But it has said why.

The first fund reportedly had inappropriate disclosure of past investment performance and asset allocation disclosures contained in advertising material.

The second had inappropriate disclosure of past investment performance and asset allocation disclosures.

Both will change the advertising material.

Rumours have been flying about which two schemes were targeted but so far none have been proved.

‘Good response’ to clear KiwiSaver explanation

OnePath has had a positive response to its “plain English” KiwiSaver investment statement, says ANZ’s head of wealth and private banking, John Body.

He said there were a number of people with KiwiSaver accounts who could not explain exactly how the system worked. ‘

Many people who received the OnePath document responded well to the way it explained what funds were included and how investment gains, taxes and fees affected a KiwiSaver balance. The statement was awarded the WriteMark Plain English standard earlier this year.

It comes after two KiwiSaver providers were asked to change potentially misleading statements to investors or face court action by the Financial Markets Authority.

The FMA has reviewed 15 schemes’ public offer documents, including investment statements, prospectuses, financial statements and information on websites.

Others were found to be providing information in a way that was too vague for investors to comprehend the risks involved. In some cases, returns were being reported in different ways.

The FMA noted some schemes would have to change their reporting to avoid confusing people, such as in situations where returns were measuredly differently before and after the new requirements.

It did not disclose which providers had been spoken to but Body said  OnePath was not one of the schemes that had been warned.

He said effective disclosure was important because it could help people to understand what asset allocations they should be in. That would make KiwiSaver more effective.

“The risk I see around KiwiSaver is of people thinking ‘because I’m in KiwiSaver, I’ve got my retirement savings sorted out’.”

He said people should also be thinking about whether they were in the right sort of fund for their stage in life, and whether they had the capacity to contribute anything more to the scheme.