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News release
25 May 2012
FMA releases KiwiSaver performance fees guidance note
The Financial Markets Authority (FMA) has today released a final version of its guidance note on KiwiSaver performance
fees.
The guidance sets out the criteria against which FMA will assess the reasonableness of performance fees, which are fees
charged to an investor when an investment manager outperforms an appropriate benchmark.
FMA Head of Compliance Monitoring, Elaine Campbell said, “While only two KiwiSaver providers currently charge
performance fees, it was important to clarify how FMA would assess performance fees and the elements that should apply
in any such fee arrangement.”
“The guidance makes it clearer for everyone about the balance between how managers and investors are rewarded for the
risks taken.”
The guidance was first issued in draft form in November. 13 submissions were received with most supporting the overall
objectives and principles.
Changes were made to clarify the status of the guidance note and to emphasise performance fees are only appropriate in
certain, limited circumstances for example, actively-managed growth funds. FMA also clarified the performance fee
elements expected to be present and added information on the disclosure of performance fees.
“FMA will continue to work with providers seeking to amend or introduce performance fees,” said Elaine Campbell.
ends