Wellington-based managed funds platform InvestNow has bought the Managed Funds product line of Rabobank New Zealand's RaboDirect, beefing up its client base and giving those new customers access to a broader range of funds.
InvestNow, which launched last January, said its platform includes all the funds currently offered by RaboDirect, plus a range of additional funds and managers not offered, including passive funds provided by Vanguard and the NZX-owned Smartshares, it said in a joint press release with RaboDirect. The RaboDirect Managed Funds product has some $125 million under management, Rabobank's media relations manager David Johnston said. InvestNow has $100m.
InvestNow bills itself as a no-advice direct investment service and owned by Implemented Investment Solutions, also Wellington-based.
Benefits include the fact that InvestNow charges no entry fee on fund purchases and has a lower minimum investment level, said Mike Heath, general manager of InvestNow.
"We don't charge any fees whatsoever for operating your portfolio with us," he told BusinessDesk. RaboDirect charged up to 0.75 per cent on fund purchases. Heath did not disclose the value of the purchase, stating it was confidential. Rabobank's Johnston also said the acquisition cost was "commercially sensitive."
Heath said he expects the expansion to attract new customers as "the features and benefits they get with us should be compelling." Active, existing RaboDirect customers will also get direct and immediate benefits from day one, he said.
"We have over $100m on our platform and we are only eight months old while RaboDirect has $120m and they've been going for 10 years. We are doing something right," he said.
Rabobank New Zealand chief executive Daryl Johnson said the decision to exit the Managed Funds product line would "simplify" the RaboDirect business model.
"As a fundamental part of Rabobank's overall business in New Zealand, RaboDirect will continue to play a key role in raising deposits for Rabobank to lend to our clients in the food and agribusiness sector," he said in a statement.
According to Johnson, InvestNow was a logical partner for Rabobank. Heath, according to his LinkedIn page, was general manager of RaboDirect from 2005 to 2011 and was responsible for all aspects of its business in New Zealand.
InvestNow founder Anthony Edwards said the purchase is a "massive endorsement of the InvestNow direct-to-consumer fund service" and the fact that InvestNow has attracted more than $100m in its first year shows the market is ready for it.