Frequently Asked Questions
We have nine of New Zealand's top investment teams at our disposal. We call these teams "PSA Managers" (Philosophy, Style and Allocation). We can use six in our portfolios and five in our KiwiSaver strategies. Those PSA managers are ASB Bank (KiwiSaver only), ANZ Investments, Nikko Asset Management (KiwiSaver only), Milford Asset Management (Portfolio only), IOOF Integral Master Trust (Portfolio only), AMP Capital, BT Funds NZ (Portfolio only), Mercer (KiwiSaver only) and Fisher Funds.
No, each operates a pre-balanced fund within four profiles, Aggressive, Growth, Balanced and Conservative (not all available in KiwiSaver yet). Each PSA Manager is separate from the others and has their own asset allocation, currency strategy, philosophy and style. They all bring all of these to the table. This is different from traditional strategies where (say) Manager A may be used just for international fixed interest, Manager B for local equities, and C for Australian equities. Every PSA Manager in our Multi-Style Management (MSM) strategy works with all asset classes in their own unique style, perhaps using sub-managers for each asset class. (PSA Manager ANZ uses Vanguard and CBRE Carlton to manage their international equities whereas Milford do it internally). We then put five or six PSA Managers side by side, simultaneously and equally, targeting the same outcome in different ways, with no reference to each other.
That’s simple – money. If any tied adviser or PSA Manager offers to share your money with other advisers or PSA Managers, they lose control of your funds and dilute their fees. Fusion Investing Ltd is freelance and independent. We don’t work for any particular PSA Manager so don’t care about their fees.
That depends on who you compare us to. Our knowledge of the portfolio investing industry suggests MMS is considerably cheaper, but in KiwiSaver, it may be slightly more, or slightly less. Some KiwiSaver providers market their schemes on lower fees. MMS will be more expensive than these but when you compare a small increase in fees to the eliminated risk of underperformance, the fee argument becomes less important. As we're targeting the average market performance, we achieve an average fee structure.
No, but it's unlikely to underperform it either. The key is we've proven we can target industry average returns, providing you with certainty of performance rankings. If you’re looking for a strategy which hopefully “beats” the industry, Multi-Manager Strategy isn’t for you. Having said that, when you also factor in typical investor performance, where investors constantly chase last years' "winners" and jump from fund to fund (usually with inferior long term results), Fusion Investing should provide long term higher returns as our investors don't behave like that. Ours is a "set and forget" strategy where fund manager changes are rare and only done through necessity. Anecdotal evidence suggests this is a major key to long term performance.
Your investor profile is the meeting point, or compromise, of your required returns, and your tolerance of the markets' ups and downs (volatility). These ups and downs are caused by fluctuations in equity (company shares) and property prices, and currency movements. Everyone wants the highest returns, but that comes with big swings in asset values which can be unnerving. At Fusion Investing, we discuss your profile with you in every case. We don't assume anything. With KiwiSaver, we select the closest industry profile to yours. With portfolios, we can refine that profile construction by diluting your portfolio with some cash. The important thing is for you to be able to sleep at night without worrying about your investments.
Once you've read this website, and hopefully our fact sheet, we set a time to discuss your situation. With KiwiSaver, we use a video conferencing app such as Skype or Zoom. KiwiSaver discussions only take 10 minutes or so as we assume you've read and understand the concept. We can answer any final questions during the conference and even take care of the paperwork at the time. With portfolios, this must be done in person and it usually takes about an hour to fully get an idea of your needs and preferences. We then write an investment recommendation and there will be at least one follow up meeting.
At Fusion Investing we mix ethical focussed PSA Managers, with PSA Managers who adopt general ethical screening such as [no tobacco, land mines, pollution etc], and even have the odd manager who leaves the market to weed out unethical companies rather than trying to do it themselves. As with fees, investors shouldn't focus solely on responsible investing as it may detract from returns (we can facilitate it though). Responsible investing is becoming more prevalent in every PSA manager so we believe it won't be long before it's a design factor across the industry.
AMP. They give access to a range of funds, but Fusion Investing provide you with the financial advice to build the KiwiSaver Multi-Manager Strategy. The Fusion approach to KiwiSaver can only be accessed through Fusion Investing as it requires an Authorised Financial Adviser to provide advice on it.
The provider we use, AMP has only brought onboard five managers so far. We're working with them to bring more managers on board in the future. However, any more than six is unnecessary as we've included many different investment styles with that many.
We charge a one-off fee of $75 (excluding GST) to switch from your current provider, or establish a new KiwiSaver contract. The fee covers administration costs and the investment advice we provide for each new member, ensuring they are on the correct plan for their risk profile.
AMP our fund manager charges an ongoing fee of $23.60 per annum. In addition each manager charges their typcial management fee and expenses. These are listed below.
Management fees (for growth strategy);
- AMP Growth fund – 0.508% p.a.
- ANZ Growth Fund – 0.65% p.a.
- ASB Growth Fund – 0.50% p.a.
- Nikko Growth Fund – 0.65% P.a.
- Fisher Balanced Fund (when used) – 0.60% p.a.
In addition to the fund manager fees, there are other expenses.
Expenses and administration charges;
- AMP Growth fund – 0.765% p.a.
- ANZ Growth Fund – 0.645% p.a.
- ASB Growth Fund – 0.615% p.a.
- Nikko Growth Fund – 1.325% P.a.
- Fisher Balanced Fund (when used) – 0.745% p.a.
Therefore, in total, your average ongoing fees are 1.26% p.a. based on the amount you have invested. These are the typical fees you would pay with any one of these providers, but with the MMS you have the benefit of leveraging your risk across all five of them.
Based on a $30,000 balance, the total average fee for a Fusion Growth Strategy will be 1.35% p.a.
Based on a $60,000 balance, the total average fee for a Fusion Growth Strategy will be 1.30% p.a.
Average Growth fund fees (Sorted.org.nz) are 1.45% p.a.
Because we use AMP as our fund manager you can access your account balance at any time using their My AMP portal online or via their My AMP apps for iOS and Android devices.
When you first join KiwiSaver there is a bit of a delay, as Inland Revenue must hold your contributions for three months from the date of your first contribution before transferring them to your KiwiSaver provider. Although your KiwiSaver contributions are deducted each payday, it can take up to three months for them to reach your KiwiSaver account. Your employer first sends them to Inland Revenue, which checks that everything is correct. Inland Revenue then transfers the funds to your provider, including any interest earned during that time. AMP, our provider, loads the details into their online portal as soon as they receive your funds. You can login and view your account at any time.
Yes, that’s universal. Fusion provides an investment option, within the AMP KiwiSaver scheme. All benefits you find in other schemes are present here too.
Absolutely not. It’s for everyone and holds some major benefits to those closer to retirement. There’s nothing to stop you using MMS as a very cheap portfolio in retirement. This will save you a significant amount of fees, as well as investment risk.
This is your choice but the fee structures within KiwiSaver, when using the Fusion strategy, make it worth keeping. Many KiwiSaver members will be advised to take their funds out and re-invest their money. This could be an inefficient option and you should take proper advice before doing this. Under the MMS system, your KiwiSaver account can be used as an investment portfolio in retirement, similar to a wrap account with advisory companies but with much lower fees. Leaving it in KiwiSaver may be a better strategy, providing you've already switched to a Multi-Manager Strategy.
PORTFOLIO SPECIFIC QUESTIONS
That's because our KiwiSaver provider has only invited four other managers into the suite so far. Whereas there are a few different ones available in our portfolios. ASB and NIKKO don't allow independent advisers to access their funds so can't be used in our portfolios.
Fusion clients are directly invested with each fund manager. We don't operate a wrap account yet as it imposes high fees. When it becomes more cost effective to do so, we'll look at wrap accounts.
We report every six months showing each manager's asset allocation, your overall allocation, and performance. Follow this link to see a sample report.
Each manager charges their standard fees and these are documented in their Product Disclosure Statements. Fusion Investing charges 0.2% plus GST per annum to monitor your portfolio, capped at a maximum of $700 plus GST p.a. That's very cost-effective compared to traditional investment services. To establish a portfolio we charge a maximum of $2,200 plus GST, irrespective of the sum invested. You are invoiced for this, no commissions are accepted from the fund managers used. This fee includes your written investment plan. (ANZ pays a trail commission of 0.25%p.a. but we donate this to charity.)