Money Talks: Simplicity’s Sam Stubbs - ‘I’m probably the most hated person in finance’

Sam Stubbs founded low-fees KiwiSaver fund called Simplicity in 2016. Photo / Doug Sherring

“I’m probably the most hated person in finance,” says Sams Stubbs, founder and CEO of KiwiSaver fund Simplicity.

“I mean, we are deliberately disrupting and I am absolutely a gamekeeper turned poacher. Like I am absolutely holding the mirror to the industry and saying, do you actually realise what you’re doing here?”

Stubbs, who this week launched the Simplicity Homes and Income Fund, aims to build and finance 25,000 new homes nationally worth $12 billion in the next 10 to 15 years.

Talking on the Money Talks podcast, he doesn’t hold back with his views on the finance sector.

Finance bosses were all nice people on an individual level, he says.

“It’s never a personal thing, but this industry is extractive. It is taking too much money out of New Zealanders in terms of fees. It is not allocating it correctly. Too much of it’s going overseas, not enough of it’s coming into New Zealand.”

The finance sector was full of capable people who could potentially be effecting positive change for New Zealand with the billions of dollars they were managing, he said.

“I think that’s uncomfortable. You know, that’s why I don’t get invited to any industry functions because they kind of know what I’ll say and they don’t want to hear what I’m going to say.

“This is the analogy I use and this is how I wind up the politicians, right? Because they need winding up on this: If a billionaire flies into Auckland on their own private jet, everyone’s all over them in terms of their investing in New Zealand, right? If I told you that 10 billionaires with 10 billion to invest in New Zealand, were arriving on one plane, the Prime Minister would be at the bottom of the red carpet, right? They’d be absolutely right.

“The irony of that is, what is it about foreign money that’s so special? Those 10 billionaires exist in New Zealand. They are the top 10 KiwiSaver managers, but I would defy any politician to be able to name two or three of them.

“And yet they collectively will be investing, or could be investing, literally hundreds of billions of dollars into New Zealand, and yet they’re, they’re unknown. Now, why is that? I think that’s because those, those managers, they don’t want to be known. They don’t want to get involved in politics. They are sitting on a gravy train at the moment.

“Which is, we’re doing just fine, thank you very much. But to me, that’s not good enough. It’s not good enough for the politicians to not engage them, and it’s not good enough for the industry to not say, what positive contribution can we make here? And you know what? It may actually be okay to charge a little less.’

Simplicity launched just seven years ago as a low cost KiwiSaver provider and already manages $5.1 billion of funds and investment portfolios.

On the podcast, Stubbs talks about his early days in finance and how greed was once a big motivator.

He started investing in shares as a teenager and found himself working for Fay Richwhite in the heady days before the 1987 crash.

But after a successful career, which included a short stint with Hanover Finance, Stubbs says “he had a genuine midlife crisis” that changed his attitude to money.

“I was getting richer and richer, and more and more stuff, and liking the person I saw less and less.”

Listen to the full episode below to hear more from Sam Stubbs.

Money Talks is a podcast run by the NZ Herald. It isn’t about personal finance and isn’t about economics - it’s just well-known New Zealanders talking about money and sharing some stories about the impact it’s had on their lives and how it has shaped them.

Money Talks is available on IHeartRadio, Spotify, Apple Podcasts, or wherever you get your podcasts.