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.
I am splitting the platform comparison 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.
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.
Most platform comparisons focus on the headline fee. That is the wrong starting point. Here is the framework I use:
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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 - if you want those, you will need a separate platform.
Kernel launched in 2020 with a specific thesis: that New Zealand investors deserved access to low-cost index funds with a clean digital experience. On both counts it has delivered. The interface is the best in market for investors who want a simple, mobile-first experience without sacrificing access to quality funds.
Kernel's own index funds cover global equities, NZ equities, and a small range of thematic options. All are NZ-domiciled PIE funds, which means the same FIF advantage as InvestNow applies - you do not personally declare FIF income from Kernel funds. The annual fee across Kernel's index funds is approximately 0.25%, which is competitive with any comparable PIE fund offering in New Zealand.
The limitation is fund range. Kernel only offers its own funds - you cannot access Smartshares, Milford, or Generate through Kernel. For investors who want a multi-manager approach or access to the full Smartshares ETF range, InvestNow is the better fit.
Investors who want a clean mobile-first experience and are happy with Kernel's own index fund range. Particularly well-suited to investors starting out who want simplicity without sacrificing cost-efficiency. If you want access to multiple fund managers or the full Smartshares range, InvestNow is the better fit.
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's convenient, but treat 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.
Find your correct KiwiSaver tax rate under the updated April 2025 thresholds. If you are on 28% and should be on 17.5%, this tells you in 60 seconds. Find my PIR →
One email a week. Straight writing on investing from New Zealand.
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