New Zealanders don't generally ask a lot of questions about their Kiwi Saver policies or know much about it. According to Massey University business school’s Claire Matthews, who is studying Kiwi Saver, claims we are incredibly oblivious to Kiwi saver as a population.
“Lots of people [in KiwiSaver schemes] don’t feel like or regard themselves as investors, and they’re not engaged. Sometimes, in a regulator’s world, you can get obsessed with driving into some spaces where in reality there are very few investors, and they’re all ultra-high net worth and probably all capable of getting advice and looking after themselves."
Below is a list of Do's and Dont's surrounding how to handle your Kiwi Saver Policies.
- Make sure you are comparing fees and returns on one of the many different platforms. Government’s Financial Markets Authority (FMA) and the Commission for Financial Capability (CFFC) are great tools to look into this, FMA looks into the effect of fees and presents it simply. Compared to CFFC's site which has a tonne of advice with different comparisons.
- Look at a five year average of your policy, rather than what happened in the last year as this can be inaccurate.
- Reading your annual statement is essential. Matthews worries that is too common for Kiwis to receive this in the email land throw it in the bin straight away. But the information on here is vital to keep up to date with.
- Change your KiwiSaver provider or fund type only when looking at fees.
I would be very concerned if people simply said, ‘I want the cheapest provider’ because that might not be the best for them, Matthews says.
This is because higher risk managed funds are costing more as they are seeking a more significant return.
- Don't change your fund after the last year's results. Investing in funds are much different from savings, and the success runs long-term rather than immediate change. There will be significant up's and downs along the way.
- Stay in a default fund unless you mean to. If you're unsure what default funds are, it's more than likely you're in one. The default is not necessarily the best, so make sure you look or get some advice on the best fund for you. This will help considerably in the future.