In response to one of my previous blogs some readers took offence at my use of the phrase “unsafe marketing practices” to describe certain actions undertaken by the Huljich KiwiSaver scheme.
For example, boredacademic wrote: “Some ‘unsafe marketing practices’! Any questionable practices, minor or not, in this industry should make anyone run a mile.”
And the boredacademic is right.
However, my phrase was not intended to diminish the seriousness of the matter. The allusion I was looking for was ‘unsafe sexual practices’, which can in some instances result in death.
Huljich’s transgressions are being taken seriously by the authorities with the Securities Commission still investigating the manager’s operations. Freshly-minted Huljich prospectuses and investment statements may not end the story.
Whatever the motivations of the scheme’s namesake and chief, Peter Huljich, in making these transactions, which he describes in his explanatory statement as “not typical”, they shouldn’t have happened.
Most of the media focus has been on the Huljich investment decisions but some of the stick should also be directed at the trustee – Trustee Executors.
The office of the Government Actuary (GA) told me KiwiSaver trustees bear ultimate responsibility for the schemes they oversee, including making sure funds invest in line with their statements of investment policies and objectives (SIPO).
It is the duty of the trustee to report any deviation from the SIPO. Indeed, the GA said other KiwiSaver schemes have had to make compensation to members after administration errors but Huljich was the first to compensate members without engaging with the trustee first.
Interestingly, Trustee Executors, as well as providing trustee services to Huljich, is also the registrar – ie, it performs all kinds of back office functions including processing transactions.
So one division of Trustee Executors would have known exactly when the Huljich transactions took place, while the other had to wait until being officially informed by the manager.
The GA reportedly has further questions for the trustee.
Tags: David Chaplin, kiwisaver
