Chalkie replies to Gareth Morgan…

Chalkie clearly reads blogs, and has replied to Gareth Morgan’s rebuttal to her article on his website.

The original Chalkie article is now on Stuff, and you can read Chalkie’s remarks below (& in the comments of the previous post)

Jenny Ruth
“My primary source of income is not from writing for savings industry-funded trade magazines — none of the publications I write for are industry-funded. Like The Independent Financial Review, all the publications I write for sell advertising but that has never affected what I write. Unlike Morgan, I’m not trying to sell anybody anything.

As I said, unitisation is the global standard — Morgan wants us to believe just about everybody else except him is wrong, bad etc. I don’t think so.

His allegations about “hidden” fees and mis-pricing are just that, allegations. Where is his proof? Simply that there have been a few cases overseas and we don’t have good policemen. I don’t think that’s good enough. And all the Kiwisaver default providers are expressly forbidden to charge hidden fees and their offerings are government approved. I did ask ING about any hidden fees — ING marketing general manager Steven Giannoulis insists that all the fees his company’s charges are fully disclosed. I also asked a number of other fund managers the same questions, including Tower, Axa, Fisher Funds and AMP, and got the same answer.

As for Morgan’s calculator, why is the “hidden” component of every manager’s fund’s fees, except his own, identical when their declared fees vary considerably? I reckon that alone discredits it.

Ditto all the rubbish he has been talking about reserves — no products currently on the market have the kind of reserves he has been railing about. They were the product of the old-style defined benefit-type pensions (incidentally, if he can tell me where I can buy one of the latter, I’d probably be in with boots on — nice to have a guaranteed annual income indexed to inflation in retirement).

I asked Morgan for the performance data on his conservative and balanced portfolios and he simply referred me to the growth example on his website.

Like most fund managers, Cullen’s investment team farms out the different parts of its funds to specialist managers, something Morgan told me he doesn’t intend to do — again, when he isn’t simply wrong, Morgan is economical with the truth.

Here’s the original chalkie column now published on Stuff.”

Published by Lance Wiggs