Asset and portfolio management
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.
Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.
Attitude of the country towards modern asset and portfolio management services
In general, as of Q3 2021, there was a total of $257 billion in managed funds in New Zealand, an increase of 3.5% from Q2. This is despite a COVID-19 induced increase in economic uncertainty and multiple government-imposed lockdowns over the course of 2021. Retail investors increased by 3-6% across private wealth investment, retail unit trusts and cash management trusts. While wholesale client decreased by 28.6%, this was put down to one (1) large provider reporting wholesale trusts in more than one (1) category when surveyed.
The increase suggests no general reservations, other than the risk aversion that could be generally expected in relation to investments.
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Providers of asset and portfolio management services must register as Financial Service Providers in accordance with the FSPA with the associated costs as outlined at 1.a. ii. above.
Generally, a manager of a management investment scheme (this does not include superannuation schemes or discretionary investment scheme where services are provided to solely wholesale investors) must apply for a financial market service licence in accordance with the Financial Markets Conduct Act 2013 (FMCA). There are several different classes of licence, and the relevant one (1) is dependent upon the structure of the scheme and the nature of the services provided. The associated fee and FMA levy for licensing depends on the total value of assets managed and ranges from $1,800 (plus GST) for a portfolio not exceeding $20 million to $550,000 (plus GST) for a portfolio in excess of $15 billion. A licensed supervisor must also be appointed for the scheme.
Providers will have ongoing obligations including statements of investment performance (SIPO), annual reports and filings and fund updates.
Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area
Managing client funds in New Zealand will require compliance with the relevant AML laws and regulations and may require registration with a financial service dispute resolution provider.
Market size for asset and portfolio management services and biggest companies in this business area
There is insufficient publicly available information to answer this with reference to markets shares and revenues etc.
However, as of Q4 2021, there were $257 billion in managed funds in New Zealand.
RBNZ data shows that nearly half of the consolidated assets of managed funds in New Zealand consist of overseas assets. While the same can be said for Kiwisaver (a government-imposed superannuation scheme), in relation to unconsolidated assets in New Zealand.
Additional comments regarding the economic situation for asset and portfolio management services or what FinTech’s must be aware of in this business area