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ISI progresses work on standard for fund performance

Fuseworks Media
Fuseworks Media

Wellington, Aug 4 NZPA - The Investment Savings and Insurance Association (ISI) is progressing work on developing a standard for reporting the performance of managed funds.

The ISI board has received recommendations from PricewaterhouseCoopers and has invited the firm to proceed to prepare initial draft proposals for a suitable standard.

A Global Investment Performance Standards (GIPS) is widely recognised as the leading standard in Europe and North America, but it is primarily designed for the wholesale funds management industry that is prevalent in those parts of the world.

In New Zealand, the market is dominated by retail funds, including KiwiSaver products.

The GIPS would require amendment to provide retail investors with information suited to their needs.

ISI plans to take the Australian Investment Performance Standard, which is essentially based on GIPS but amended for the Australian retail market, and further develop this for the New Zealand retail market.

The establishment of a best-practice industry-wide investment performance standard became an issue after Huljich KiwiSaver restated its performance.

The Government Actuary has since directed the trustee of Huljich Kiwisaver to provide quarterly reports.

In March, Peter Huljich resigned as managing director and chief investment officer of Huljich Wealth Management following controversy about Huljich KiwiSaver transactions. Former National Party leader Don Brash took over both roles. Huljich Wealth Management restated the performance of its Kiwisaver fund after Peter Huljich used his own money to boost the performance of the fund.

ISI said it has been keeping the Minister of Commerce and the Ministry of Economic Development advised of progress as it is possible that standards for reporting of Investment Performance may be legislated to ensure that all fund managers are required to comply, not just ISI members.

ISI believes that developing a standard that has a basis that is consistent with Australia would have an added advantage as the governments of both countries drive toward achieving a single economic market.

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