Ring-fencing funds for education

EDUCATION SAVINGS friendly society ASG’s new chief executive believes he’s put in place the groundwork for the rejuvenation of its New Zealand operations.

ASG stands for Australian Scholarships Group, which provides tax-advantaged savings mechanisms for parents wanting to prefund part of their children’s further education.

In the year to the end of June, ASG returned A$200 million ($252m) in education benefits to members and their children, though the vast bulk of it was in Australia.

But John Velegrinis, who was in the country last week to check on developments within ASG’s Kiwi operation, is frank about the need for ASG to improve its marketing in New Zealand.

‘‘The last few years you would not have heard much about us which is not a surprise,’’ he said. ‘‘There were quite a number of issues.’’

These were not issues with the core programme of ASG, which is a pooled fund into which parents (and often grandparents) make regular payments. Should their child go on to tertiary studies, that child will receive annual scholarships in return.

Tax advantages mean those scholarships should equate to the capital contributions plus returns of in the region of 5 per cent to 6 per cent per annum, but that is dependent on the performance of the assets it invests in, mainly low-risk bonds.

The issues were with a sleepy tied sales force and management unable to awaken it.

In the South Island, the not-forprofit ASG had effectively ceased to seek new members.

‘‘There were a lot more parents we could have helped,’’ said Velegrinis, who says he joined from ANZ to head up the transTasman operation, as he is a believer in the transformative power of education.

As the Australian-born son of a working class Greek immigrant to the Lucky Country, Velegrinis understands what education can do for individuals.

He recalls how his father prized education and forced him to go with him each Saturday to the factory in which he worked so his son would understand what the alternative was for those without an education.

With new management now in