An evolving landscape

An evolving landscape

2019 KPMG Wealth and Funds Management Publication

October 2019 nz/

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Contents Foreword Industry snapshot Articles Contributors

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Foreword

Beckie McCleland Head of Wealth Management, Director, Risk Consulting KPMG

Anyone working in financial services in New Zealand will tell you that the sector is experiencing an unprecedented level of regulatory change and scrutiny. This is also true for the wealth and funds management sector. From a rise in consumer expectations to increased regulator scrutiny, global trends influencing the local market, and domestic competitors launching new products and services, the velocity and variety of change is significant and is unlikely to slow down any time soon.

It is a fascinating time to be part of the wealth and funds management industries in New Zealand, but we also find ourselves in a sea of change. Change can mean uncertainty but it also presents great opportunities.

KPMG is excited to be engaging with the wealth and funds management sector and providing thought leadership that sparks conversations. With change afoot for our sector, it is timely to pause and reflect on what it means for firms and their clients.

On behalf of KPMG, we hope you enjoy the read. Please do not hesitate to contact one of the team (listed at the end of this publication) to assist your organisation in addressing any of the matters raised.

Conduct and culture

The fall out from the Australian Royal Commission has had noticeable impact here in New Zealand, with banks and life insurance companies undergoing review in the conduct space. We are fortunate to hear from Financial Markets Authority (FMA) CEO, Rob Everett, with his outlook on how those in the sector should look to apply the findings and themes from these reviews.

Digital transformation

KPMG Partner, Mike Clarke unpacks the reality behind `digital transformation'.

Mike looks to answer: What does this mean in practice and how can those embarking on, or already implementing, a digital transformation journey, set themselves up for success?

Fintech

Often we can look overseas to anticipate the next trends to arrive in New Zealand, albeit with their own Kiwi twist. This publication includes commentary from our KPMG Global colleagues, looking at how fintech such as cryptoassets, AI and robo-advice might be regulated in future and the challenges that this presents.

Corporate governance and risk

Arguably, expectations on board directors are higher than they have ever been, with regulators setting the bar for boards of publically and privately held organisations against defined corporate governance principles. KPMG risk specialist Rachael Pettigrew looks at the growing responsibilities of boards, and how important the tone from the top is in establishing an appropriate risk culture.

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Advice and trust

We are seeing significant regulatory change related to the new financial advice regime set for introduction next year. Our clients tell us that they are seizing this opportunity to take stock of how they deliver advice and are viewing the change as a chance to better serve their clients. KPMG Partner, Matt Prichard, takes a deeper look to ask whether advisers are truly delivering a great advice experience, that in turn fuels the prosperity of New Zealand.

Responsible investment

We are also fortunate to include insights from John Berry, Co-founder and CEO of Pathfinder Asset Management, an ethical investment specialist company. We are seeing consumers' interest in sustainable and ethical investing grow significantly, leading to a demand for environmental, social and governance (ESG) focused funds, particularly in the KiwiSaver market. John discusses this demand and questions whether New Zealand's fund managers are doing enough.

With change afoot for our sector, it is timely to pause and reflect on what it means for firms and their clients.

Industry snapshot

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Industry snapshot

39

133%

Sustainable investing assets in New Zealand grew by 133 percent from 2016 to 2018

In 2007, there were 39 founding signatories to the Principles of Responsible Investment (PRI), including the Guardians of the New Zealand Superannuation

53%

Of broad responsible investing approaches in 2018 were centred on ESG integration

2,934,268

Number of New Zealanders invested in KiwiSaver*

4,960,000

Current population of New Zealand

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