KiwiSaver nest eggs help trustee sector take flight

Friday 12th November 2010

In the three years since its launch KiwiSaver has not only helped kiwis build their nest eggs but has provided a boost to the trustee sector.

The Trustee Corporations Association of New Zealand (TCA) has said the government-backed savings scheme has grown the businesses of the country’s five statutory trustee corporations.

"While we've had a high profile in relation to finance companies in recent years, the reality is that they represent a small part of our business," said Trustee Corporation chairman Clynton Hardy.

"There has been an increase of over 30% in KiwiSaver membership numbers for the year to June 30, so the increase in work in this area has been phenomenal."

Guardian Trust, Trustees Executors, Public Trust, Perpetual Trust and Covenant Trustee supervised1310 corporate trusts, including KiwiSaver, worth more than $159 billion for the year ending June 2010, a 12% increase in value on the 2009 figure of $142 billion.

Trustees have also sees a large growth in back office services for KiwiSaver funds, which includes maintaining investor records and providing custody and accounting services for each fund.

Aside from corporate trust work personal trust activity has remained steady, with the five trustee companies managing over 26,000 trusts with funds in excess of $6.3 billion.

The TCA also said with a new regulatory regime on the way for trustees, there remain some areas that need "to be ironed out."

"We welcome the new trustee licensing regime and the advent of the Financial Markets Authority. We don't believe any of our members will have trouble meeting the new standards of accountability," Hardy said.

"However, if we're to help achieve the common goal of restoring investor confidence, then we need high quality information. While we're pleased to see auditor registration introduced, we're not happy with the level of auditing assurance the market is currently receiving, and we'll be raising our concerns with government."

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