By Gareth Vaughan
BNZ, which will finally become the last of the major banks to launch its own KiwiSaver scheme on February 25, isn't looking to buy an existing KiwiSaver provider but plans to "have conversations" with all its customers as it strives to get the start-up business off the ground.
The bank's acting CEO Anthony Healy - CEO Andrew Thorburn is on leave - told interest.co.nz there were two key aspects to the BNZ scheme that would help differentiate it from the dozens of competing schemes. Firstly, BNZ would allow customers to directly manage their KiwiSaver investments.
"We've built it so that it will be as simple as doing everyday banking or paying a bill," Healy said. "We wanted to make it simple for our customers and fully integrated with all of our existing channels. So you can go online and sign up, you can move money around just like you can in any bank account, and you can access your KiwiSaver details and your balances through our ATMs, through online, through phone banking and through the store network (BNZ branches) all throughout New Zealand."
"There's not many providers that offer the fully integrated proposition where you can literally go online and sign up and move money straight away into your KiwiSaver and treat it just like another bank account."
"The second point I think is the approach we've taken with partnering with Russell.Investment Group (which will manage BNZ's scheme)," said Healy.
"Using a manager approach means we can access best of breed investment management and products through Russell, best of breed around the world. So we bring a lot of benefit to our customers by doing that. And we don't have an existing wealth manufacturer that we own, which means we're not trying to sell an existing product that we own."
Five funds on offer
BNZ will offer cash, conservative, moderate, balanced and growth funds. Russell has existing funds with the same names as the last four. All cash fund money must be invested in BNZ term deposits or short-term securities.
The fees disclosed in BNZ's investment statement suggest mid-range pricing compared with other KiwiSaver providers. The management fee, for a middle of the road balanced fund for example, is 1% per annum compared with ANZ's 0.9%
The launch of BNZ's KiwiSaver scheme comes five and a half years after KiwiSaver launched and with two million people already signed up to existing providers, led by ANZ's OnePath, ASB and Westpac who, combined, have almost 59% of the NZ$13.65 billion under management between them.
Up until now BNZ has been offering the AXA KiwiSaver scheme to its retail customers and AMP's to customers who are employers. BNZ's launch comes just ahead of the minimum KiwiSaver contribution from both employers and employees being increased to 3% from 2% on April 1. Healy said the Axa and AMP relationship had served BNZ well but the bank's customers had increasingly been asking for a BNZ branded and BNZ owned KiwiSaver product they could receive through their everyday banking channels.
Meanwhile, Donna Nicolof will join BNZ from its parent National Australia Bank (NAB) from Monday as head of private bank and wealth replacing Tracey Berry who left to join Kiwibank last October.
Conversations with all customers
Asked whether existing BNZ banking customers could expect an aggressive cross sell Healy said BNZ staff have conversations with customers everyday about their financial needs.
"And this will just be a logical extension of that conversation with all our customers. The aim is to have a conversation with each one of our customers over time that really we already have with them. All we're doing is bringing a complementary product that helps have that wealth conversation and saving conversation that we're probably having today, just without the BNZ (KiwiSaver) product."
Healy wouldn't be drawn on whether BNZ had looked at buying an existing KiwiSaver provider but said neither it, or any affiliate of NAB, was currently looking to do so. There's has been speculation BNZ might be interested in default provider Tower.
"We're not today looking at acquiring anyone, including Tower. (But) we can't rule out that in the future we wouldn't consider acquisitions," said Healy.
Membership growth slowing
BNZ's launching into KiwiSaver as membership growth slows. Figures from Tower last month showed that, at just over 9,000 new sign-ups, KiwiSaver monthly membership growth in December was the lowest Tower has recorded since it started compiling its own data in January 2009. But Healy said BNZ wasn't concerned about this.
"We don't think that long-term there's going to be lower levels of people joining KiwiSaver."
He said 45% of people eligible to sign up to KiwiSaver are still yet to do so.
"So we think there's a huge opportunity," said Healy.
"And we think as financial literacy increases, as we have more and more relevant conversations, as you see the Government support the industry more and all KiwiSaver providers have those conversations about the importance of savings for your retirement, we think you'll see more and more kiwis going into KiwiSaver."
BNZ would target both people not yet signed up to KiwiSaver and those with existing providers.
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(Update adds additional detail).