Robo time for Forbars as Tempo ticks on

NZ wealth management firm, Forsyth Barr, has opened up a wait-list to a new robo-advice service that has been more than three years in the making.

Billed as “NZ’s first guided investment app”, the Tempo digital advice system emerged out of the Forsyth Barr ‘Trove’ project, established in 2020.

According to just-released documents, Tempo will offer investors access to 15 underlying products – five Australasian asset strategies run by Forsyth Barr-owned Octagon Asset Management with the remainder all global equities exchange-traded funds (ETFs) – plus the ability to build individualised portfolios via the advice engine.

Most of the global share ETFs follow thematic trends – such as low carbon, green energy, technology and, diversity and inclusion – managed by BlackRock iShares with a sole Vanguard product plying the healthcare sector. The Tempo funds are all structured as portfolio investment entities.

In addition to a flat fee of 0.85 per cent platform fee, Tempo clients will also pay underlying fund fees ranging from 0.1 to 0.41 per cent, equating to “total fund charges of between 0.95% and 1.26%”, the disclosure document says.

“The blended total fund charges across a typical Tempo portfolio is likely to be approximately 1.12% of the amount invested.”

“The management and administration charges paid to [Forsyth Barr] out of the fund for performing our functions as Manager, and also covers the fees and charges for supervisory, custody, registry, administration, cash, marketing and legal services,” the document says.

However, Tempo investors will face the same fees regardless of whether they access the optional advice function.

“If you select your own mix of Tempo Funds without any advice from Tempo Limited you will normally be charged the same fees as investors receiving advice – the fees are for the management of the Tempo Funds and the distribution of the Funds through the Tempo app (which at your option may or may not include advice).”

Tempo uses Adminis for custody and administration (including registry, unit-pricing and fund accounting) and Trustees Executors as supervisor.

Managing director, Neil Paviour-Smith, along with other Forsyth Barr executives including Peter Cearns, chief operating officer, Gordon Noble-Campbell, head of wealth operations, and Ian Hankins, head of wealth management, serve on the Tempo board. Hankins joined Forsyth Barr in December last year.

Several NZ investment firms, including Kiwi Wealth and Nikko Asset Management, dabbled with robo-advice under a previous special regulatory exemption established in 2017. But under the new Financial Services Legislation Amendment Act regime introduced in 2021, robo-advice is now permitted as part of the general licensing conditions.

The Nikko Goalsgetter service has been providing digital KiwiSaver and investment fund advice since 2019.