Are you getting bang for your KiwiSaver buck?
The first thing to remember is that not every KiwiSaver scheme provider is equal – each has a different investment approach and will offer their members a different level of service.
At ANZ, we favour an ‘active’ investment approach, whereby our investment team undertake a high level of research and analysis in their pursuit of delivering above-average long term returns for our members. They utilise a proven and repeatable process, one which has diverse international reach when it comes to finding the best investments for our funds. And on the topic of investing responsibly – an area we know is of particular importance to our members – it also means we can take a hands-on approach. Find out more about our active investment approach here.
You also have easy access to KiwiSaver advice, and you can view and transact on your KiwiSaver account online and via your mobile phone. What’s more, we deliver regular information and updates direct to your inbox, and we have the tools and information available on our website to help you with your investment decisions.
We’re able to deliver these services through the fees we charge. Ultimately it’s up to you to decide whether these are reasonable for the level of service and the investment returns you get.
However, while fees are important, we’d suggest it’s as important to look at our ability to deliver you with long term investment returns after fees, as this is one of the primary factors that’ll determine how much money you have in your KiwiSaver account when you reach retirement.
Switching to a low-cost fund is not necessarily the answer
If you’re concerned about the amount of fees you pay, some providers will argue that investing in a low-cost fund will let you hold onto more of your savings, thereby leaving more dollars in your account at retirement. But choosing a fund solely on fees means you may miss out on greater returns and a bigger balance in your KiwiSaver account at retirement.
Providers of low-cost funds tend to use a ‘passive’ investment approach to managing money, where they aim to deliver returns that closely follow the performance of a market index. While they charge a few less dollars each month, it says nothing about whether they can deliver you with above-average returns over the longer term, or their ability to navigate the ups and downs in markets.
So, look beyond fees to build meaningful retirement savings
It’s true that fees are an important determinant of investment performance and are something every investor should pay attention to. However, it’s important not to allow fees alone to dominate your decision making process. Focus on the quality of your scheme provider and its ability to deliver you with long term investment returns after fees. And make sure you make the most of the help and support that’s available to you so you can plan for an enjoyable retirement.