FMA 'suggested' Diversified sell to Fisher
The sale of the KiwiSaver fund, and subsequent break-up of the Diversified business, happened because of concerns about the scheme's fees.
From 2013, the Financial Markets Authority required fund managers to supply details of KiwiSaver funds’ total expense ratio. The LRKS fees were high because it was a “fund of funds” and was small. Director Norman Stacey said new regulatory requirements had added significantly to the fees.
“Even if we had charged no fees, the fixed costs would have been too high.”
Diversified was eventually given an ultimatum to solve the TER problem by March 31, 2014, or have the scheme closed by the FMA.
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