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2016 New Zealand Innovation Awards Innovation in Financial & Professional Services: Simplicity NZ

The winner of the Innovation in Financial & Professional Services is... Simplicity NZ!

Just ponder this number for a brief moment: the world’s largest investment not-for-profit, Vanguard, handles $5.5 trillion dollars per year. That’s trillion, with a “T” – or only about 70 times as much as the entire New Zealand economy is worth. And that’s just one company in the industry.

But the gargantuan amount of money available in investment funds isn’t the main reason Sam Stubbs and his company, Simplicity, are in business.

“We wanted to revamp the customer experience – make it friendly, online and simple,” he explains. “This is the Uber of the industry. It’s incredibly disruptive. The industry is one of the last dinosaurs.”

What makes Simplicity so disruptive is it makes investing in KiwiSaver simple. Users can sign up online, similar to logging in to online banking. Fees are also easy to figure out – all funds carry a fee of just $30, plus $3 for every $1000 in an account (a rate of 0.3 percent). With this model, Stubbs says, a person can save about $65,000 during their lifetime. “We want to make the biggest difference to New Zealanders,” he explains. “It’s a huge amount of money – and that’s with the current regime.”

There’s also a social message behind what Simplicity does, as 15 percent of all money made goes to charities. And the organisation itself is a not-for-profit that’s entirely owned by The Simplicity Charitable Trust. Investing ethically – and not in things such as landmines or cigarettes – and being transparent about investment is something that Stubbs says he prides his organisation on.

Being ethical is important, explains Stubbs, especially in an industry as awash with cash as Simplicity’s is. “If you look at the industry, it has four of the five most profitable companies in New Zealand,” he explains. “So it’s a ‘prisoner’s dilemma’ when it comes to innovation.”

Then there’s the vital statistics of one of Simplicity’s chief partners, fellow not-for-profit Vanguard. “Vanguard own [the equivalent of] five percent of every company in the US, and one percent of the companies in the world. That’s $5.5 trillion dollars [per year]. It’s about 70 times the size of New Zealand’s economy.”

In development for three years before it was officially launched in August, Stubbs says the interest in Simplicity has been higher than he expected, reaching its 12-month target for clients in three weeks. As word about Simplicity spreads, it seems likely those numbers will increase – or so Stubbs is hoping.

And as innovative as the platform is, he has a rather, well, innovative way of simply looking at what innovation is. “Innovation to me is like Christmas,” he says. “Sometimes you know what you’re getting. Sometimes you get surprises.”

EVALUATOR'S COMMENTS

Congratulations on your disruptive business model that is customer-centred in every way – simple, transparent, friction free and putting the customer in control. Love the added benefit of charity support which has the potential to create loyalty given a nonhuman customer experience. Very compelling. This has the opportunity to disrupt and make a difference to New Zealanders.