The NZ investor's guide to PIE fund platforms: InvestNow and Kernel
Why NZ-domiciled PIE funds handle FIF internally, what that means for your tax position, and how to choose between the two platforms that do this best.
I have spent the better part of two decades working inside NZ financial services platform businesses. The fee structures, the custody arrangements, the trade-offs that get made during product development, the things that end up in the fine print. Most platform comparison articles are written by people who have read the websites. This one is written by someone who has worked inside them.
That background shapes how I think about this question. The right platform is not the one with the best marketing. It is the one that is structurally suited to how you invest, at the portfolio size you are at today and the one you are building toward.
A quick note on structure. When I wrote last week about why NZ investing is harder than it looks, I flagged that this week would cover the full platform comparison. The more I worked on it, the more I felt that rushing it into one issue would mean glossing over the details that actually matter. Each platform has a different underlying structure, different tax implications, and suits a different investor profile. So I am splitting this across three weeks. This week covers the PIE fund platforms, which is where most NZ investors should start. Next week covers the direct investing platforms. The week after brings it together with a comparison table and a practical framework for combining them. If you want the full picture, it is worth reading all three.
Why the platform decision matters more in New Zealand
In the United States, the major brokerages have largely converged. Fidelity, Schwab and Vanguard all offer zero-commission trading, access to the same universe of ETFs, and robust mobile apps. The differences between them are marginal for most investors.
In New Zealand, the differences are not marginal. The platform you choose determines which funds you can access, how much you pay at different portfolio sizes, how your investments are held in custody, and in some cases how your FIF tax position is structured. Getting this wrong costs real money over time.
Advertisement · 728 × 90What actually matters when choosing a platform
Most platform comparisons focus on the headline fee. That is the wrong starting point. Here is the framework I use:
- Fee structure at your portfolio size. Some platforms are cheap at small sizes and expensive at scale. Others are the opposite. Know where you sit.
- Fund access. Can you access the specific funds you want, including NZ-domiciled PIE funds that handle FIF internally?
- Custody arrangements. Who holds your assets, and what happens if the platform fails?
- FIF implications. Does the platform hold assets in a structure that creates FIF obligations, or does it wrap them in a PIE?
- Interface and automation. Can you set up automatic contributions and rebalancing, or does everything require manual action?
InvestNow
InvestNow is the platform I recommend most often to investors who have moved past the beginner stage and are building a serious long-term portfolio. The core reason is straightforward: no transaction fees on a large range of managed funds and ETFs, including the full Smartshares range.
Smartshares funds are NZ-domiciled PIE funds. That means the fund manager handles FIF internally at the PIE rate, and you do not declare anything personally. For investors approaching or above the $50,000 FIF threshold, this is a significant structural advantage over holding international ETFs directly.
InvestNow also offers a range of other managed funds including Kernel, Milford and Generate, which means you can build a diversified multi-manager portfolio in one place without paying transaction costs on each contribution.
The interface is functional rather than beautiful. It is not the platform you would recommend to someone who wants a seamless mobile-first experience. But for investors who care more about structure and cost than aesthetics, it is hard to beat.
Investors with portfolios above $10,000 who want low-cost access to NZ-domiciled PIE funds and are comfortable with a straightforward interface. Particularly strong for buy-and-hold ETF investors using Smartshares funds. Note that InvestNow does not offer direct shares or internationally-listed ETFs such as VGS or QQQ — if you want those, you will need a separate platform.
A note on KiwiSaver
Both InvestNow and Kernel also offer KiwiSaver, which means you can use the same platform for your personal investment portfolio and your retirement savings. That is convenient, but it is worth treating them as separate decisions. The right fund for your KiwiSaver may not be the same as the right fund for your personal portfolio, and the fee structures and fund ranges differ between the two products even on the same platform.
What applies equally to both is that fees compound over decades, fund access matters, and most New Zealanders are on the wrong PIR rate for their KiwiSaver and do not know it.
Next week I will cover the direct investing platforms: Sharesies, Hatch, Stake and Interactive Brokers. These all involve holding assets directly rather than through a NZ-domiciled PIE wrapper, which means FIF obligations apply, custody arrangements differ, and the fee structures work differently. Understanding the distinction between these platforms and the PIE fund platforms covered this week is the foundation for building a portfolio that is both cost-efficient and tax-aware.
- 1Why investing from NZ is harder than anyone admits
- 2The NZ investor's guide to PIE fund platforms
- 3The direct investing platforms: Sharesies, Hatch, Stake and IBKR
- 4All six platforms compared: the table and framework
- 5Portfolio construction for NZ investors
- 6KiwiSaver strategy: fund selection and active vs passive
- 7Currency strategy: hedged vs unhedged
- 8What the current NZ economic environment means for your portfolio
The direct investing platforms: Sharesies, Hatch, Stake and Interactive Brokers
When PIE funds are not enough — how the direct investing platforms work, what FIF means for each of them, how custody arrangements differ, and which one suits your situation. Free for all subscribers.
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