Fund guru takes KiwiSaver road less travelled
FUND EXPERT Binu Paul will next month launch an independent subscription service, SavvyKiwi, to help people sift through the 200-plus KiwiSaver funds to find the right one for them.
For $89 a year – discounted fees apply to those who sign up for longer – the online service will help people navigate the crowded KiwiSaver market.
Paul said the company would rely solely on fee income.
‘‘What that means is I don’t earn research fees, or trail commission, or finders fees. All of those have been offered to me,’’ he said. That made the business truly independent, but it was also Paul’s biggest commercial risk because he was effectively turning his back on proven revenue streams.
Paul was head of fund research group FundSource before leaving to join fund manager Tyndall as its head of business strategy and development.
He left last year after a restructuring, and decided to go into business for himself, seeing a big opportunity in KiwiSaver.
Paul is convinced many KiwiSavers have either picked funds and schemes for the wrong reasons, such as choosing bank KiwiSaver schemes for convenience, or have been bumped by the Inland Revenue into a low-risk, low-return default fund because they didn’t bother choosing one.
Savers will feel the results of both those things at retirement when they end up with smaller nest eggs than they might otherwise have had.
Paul said in each of the fund classes – cash, conservative, balanced and growth – there were good-value funds, but there were also funds that were just charging over the odds, and did not justify those extra fees. SavvyKiwi initially walks people through the process of selecting the type of fund they should be in then gives them a shortlist of the best funds in that class. The service then keeps the subscriber informed of their fund’s progresses, and provides alerts when anything material changes with it.
Paul expects to draw his subscriber base from two sources – people accessing it themselves through computers and smartphones and companies signing up to provide the service for their workers.