Two investment watchdogs say the resignation of Huljich Wealth Management's managing director Peter Huljich will make no difference to their investigations into the KiwiSaver manager.

Huljich yesterday stepped down as MD and chief investment officer to be replaced by chairman and former Reserve Bank Governor Don Brash after weeks of controversy over his management of the firm's KiwiSaver scheme.

But members of the investment industry have called the resignation a "false sacrifice" and questioned whether Brash can add any value as a manager.

Allegations surfaced a month ago about Huljich selling shares into the firm's KiwiSaver funds to ramp up returns and attract more investors.

The scheme, which has 70,000 members and more than $117 million invested, has marketed itself heavily on its top performing results and the involvement of Auckland mayor John Banks and Brash on its board.

Two weeks ago the company pulled its prospectus and reworked it amid investigations by the Securities Commission.

Peter Huljich admitted to topping up the KiwiSaver funds to the tune of $150,000 to cover a poor investment in NZX-listed Diligent Boardbooks and a low level of diversification.

Yesterday Brash said the board had undertaken a full review of its operations and it had "become clear" the board had not been kept full informed about certain transactions.

"Peter has accepted responsibility for these lapses and has tendered his resignation."

Brash said it was not the fault of Banks or himself that they had not been told about Huljich's actions and therefore they did not feel the need to step down as directors.

But Brash said Huljich's actions also did not warrant firing him from the company.

"He is no longer CEO, that is a very substantial penalty for him."

Huljich will stay on as operations manager but will have nothing to do with investment decisions. He will remain a beneficial shareholder.

Economist and rival KiwiSaver fund management business owner Gareth Morgan described the resignation of Huljich as staged and a "false sacrifice" and said it did not go far enough. He said both Brash and Banks should have resigned after admitting they did not know what was going on at the company.

Market commentator Arthur Lim said the resignation of Peter Huljich also did not resolve the basic problem with the company. "It doesn't change one thing - they have got no investment experience."

Brash yesterday admitted although he had invested money on behalf of others in the 1970s he was not an experienced fund manager and said the company would be looking to hire someone to bring on to its investment committee.

He would not comment on specific investment decisions made in recent weeks but said the company would be "reviewing all investments carefully".

Brash will stay on the board but will step down as chairman while 34-year-old Huljich will be replaced by his father Chris. Brash said he would also be looking for an independent director to join the board.

A spokesperson for the Securities Commission said the changes would make no difference to its investigation.

"Our investigations are continuing."

Gavin Quigan, a spokesman for the Government Actuary's office, which is in charge of monitoring KiwiSaver schemes, said it too would continue with a separate investigation.

The actuary has the power to disband the scheme but Quigan said at this stage it appeared Huljich had not disadvantaged any of its investors.

Morgan said the scheme should be wound up with members transferred to the default providers.

February 7: Allegations emerge of Huljich Wealth Management selling shares into its KiwiSaver funds at a discounted price to ramp-up returns and attract more savers.

February 9: Fundsource figures show Huljich's three KiwiSaver funds went from being the top performers to the bottom in the last three months of 2009.

February 19: Huljich pulls its prospectus and Securities Commission says it is investigating. Peter Huljich admits to using his own money to top up the funds but says he did it to "compensate" investors for poor investment decisions. Executive director and Auckland mayor John Banks says he knew nothing.

February 24: Huljich chairman Don Brash describes the transactions as "regrettable".

March 4: Peter Huljich resigns as managing director and chief investment officer. Don Brash steps in to fill the roles.