Kernel Shoots Through $1 Billion In Funds Under Management; Not Stopping There

Kernel, an NZ-owned wealth platform, has sailed through the $1 billion funds under management (FUM) milestone. Headed by passive investing advocate Dean Anderson, Kernel saw FUM growth of 89% last year, with an increase of over 50% in 2024 to date.

The business, which started with only three NZ equity funds in late 2019, has since grown to offer 17 index-tracking funds, four actively managed fixed interest funds, two diversified funds, on-call savings accounts and the Kernel KiwiSaver Plan.

“The team is ecstatic to reach this milestone and see the pace of growth over the past 12 months”, says founder and Chief Executive Dean Anderson. “It’s been encouraging to see customers adopting good money habits, despite the current economic environment”.

The month of April saw fund inflows exceeding $170M, followed by the highest month of retail customer applications in May.

Kernel has followed an organic growth path over the past four years, with both its wholesale and retail customers. Of Kernel’s current FUM, wholesale clients, comprised of financial advice firms, family offices and not-for-profits now make up roughly 52%, compared to their first year of business when wholesale represented closer to 80% of FUM.

“As we’ve grown our product offering, we’ve increasingly appealed to more everyday Kiwis wanting to manage their money. We find customers are coming to us from the banks, looking for alternatives to term deposits, or from other investment platforms”, says Anderson.

Of Kernel’s customer base, one third are regularly investing and 26% are using two or more of Smart Saver, KiwiSaver and investment funds. Expanding the Kernel product line has led to a higher share of wallet amongst existing customers and additional revenue diversity for the business.

“We’ve invested heavily in our technology and platform over the past 18 months to set the business up for growth”, says Anderson. “Our annual recurring revenue year on year growth rate is consistently over 90%”.

The investment into the platform has been to the benefit of retail and wholesale customers, with Kernel now offering an advised KiwiSaver Plan. “After working with over 100 financial advice groups, we had many requests from advisers for a passive, low-cost KiwiSaver plan designed for accumulators”, says Catherine Emerson, Head of Customer Strategy.

“We don’t believe in paying advisers commissions to sell the Kernel KiwiSaver Plan; but we do believe that more Kiwis should access independent retirement planning advice. Our solution is built to facilitate this service and fees for advice”, Emerson says.

So, what’s next for Kernel and its customers? “Our assets under management are forecast to grow six-fold over the next four years, attributed to expected growth in our fund range and an expanded product set”, Anderson shares. Although he remains tight-lipped on specifics, Kernel has plans to expand its investment offering beyond funds in the next year.

About Kernel

Kernel is a platform offering a range of investment products and innovative tools and technology to grow wealth - with ease and all in one place.

Our team are passionate about leveraging technology and our financial expertise to create the best way to grow and manage your money. Our trusted passive investment approach takes the guesswork out of creating a diversified portfolio while remaining cost-effective and accessible.

Kernel is known for its unique and high quality funds, low fees, market-leading technology, and outstanding customer service.

We help everyday investors, advisers, wholesale clients, iwi groups and charitable trusts achieve their goals, gain financial stability and unlock more opportunities.

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