The newest finance firm, FirstCape, is on a mission to grow individual savings to ensure people can retire on more than state pension payments. Video / Carson Bluck
New Zealand’s pension deficit problem cannot be fixed without making changes to the KiwiSaver scheme, nor with fragmented investment firms, say the leaders of a new $44 billion finance firm.
FirstCape chief executive Malcolm Jackson and chairman Matt Whineray, former chief executive of the $70 billion state Super Fund, are making it their mission to help grow our private savings pool so retirees can rely less on increasingly inadequate Government pension payments.
“There’s a gap for us there. Can we afford it? Well, what’s the best time to plant a tree, 20 years ago, what’s the second best time? Today.” Whineray told Markets with Madison.
The pair used Australia’s A$3.8 trillion (NZ$4.18 trillion) superannuation pile as an example of what was possible.
An individual’s average retirement savings were A$120,000 (NZ$132,000) across the ditch, compared with an average $30,000 here, Jackson said.
“They are at a more mature state and that’s probably where we need to be.
“It’s fanciful to think you are going to fund a retirement on $30,000 in addition to your Super.”
When asked why Jackson was making funding the retirement income gap his firm’s problem to solve, he said people needed to take personal accountability for their own savings.
“You can’t just put all responsibility for these decisions onto the public sector.”
FirstCape CEO Malcolm Jackson and chairman Matt Whineray are making it their mission to fix our country's pension deficit.
FirstCape became official on Wednesday this week. It completes a merger of four finance firms; Jarden, JB Were, Harbour Asset Management and BNZ wealth, including its $5 billion KiwiSaver scheme.
It will be co-owned by BNZ’s parent National Australia Bank, Jarden and private equity firm Pacific Equity Partners.
It’s the latest move in finance’s consolidation trend, following Fisher Funds’ acquisition of Kiwi Wealth last year.
Jackson said the aim was to create efficiency gains and financial savings, which would then be used to reinvest in new products or passed on directly to clients.
“Hopefully, both. The amount of fragmented, subscale players in that KiwiSaver market is such that I’m not sure the best outcomes are being delivered, because unless you’re at a certain scale point, you’re not focused on client outcomes, you’re focused on generating enough fee income to survive.”
Watch the two leaders of FirstCape discuss what its newfound size will mean for investors, and its plans to cope with continued wealth inequality and an estimated $1.4 trillion transfer of wealth from baby boomers to younger demographics.
Get investment insights from executives and experts on Markets with Madison every Monday and Friday here on the NZ Herald, on YouTube and wherever you get your podcasts.
Sponsored by CMC Markets.
Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working at Jarden, and has covered business and economics for television and radio broadcasters.
