START HEALTHCHECK

investment selection, kiwisaver

'Build-your-own' KiwiSaver scheme: Yay or Nah?

  • Fabook Messenger Sharing Link

Most KiwiSaver providers are set up in a way that allows members to choose from one fund manager. For example, in the case of Milford KiwiSaver Plan, you can choose from various funds, but every fund is managed by Milford Asset Management, the provider of the plan.

KiwiSaver was set up to be a simple investing option. Kiwi's who wanted to diversify not only what their fund managers were invested in, but also diversify among different fund managers, do not have many options.

InvestNow, an online investment platform is looking to change that. They want to create a ‘Build-your-own' KiwiSaver scheme which gives members a lot more control over what they are invested in. InvestNow currently has access to over two dozen managers and 120 funds, which would give members plenty of options. This is similar to the model another KiwiSaver provider, Craigs IP uses. However, InvestNow will be managed fund based, while Craigs offers access to direct investments.

Investing in a ‘Build-your-own' KiwiSaver scheme which gives you more control has its advantages and disadvantages. With more control and choice, comes the opportunity to design a KiwiSaver portfolio that's ideally suited to your investing preferences and financial needs. You also get more opportunity for diversification and potentially could be paying lower fees.

However, if you get it wrong (or think you have got it wrong) during periods of market volatility - there is a higher chance of you panicking and selling out of funds at the inappropriate time. Having confidence in any investment decision you have made is very important.

A word of warning. Anyone wanting to use such a ‘Build-your-own' KiwiSaver scheme will need to ensure they not only do comprehensive research on the various funds they will be invested in, but also regularly monitor these funds. Members will, therefore, need both expertise in fund manager research and a time commitment to the research and monitoring of the funds. Such a scheme would thus cater best to Kiwis who have a well-rounded knowledge of the investment markets or have access to financial advice.

I'd love to hear back from you. Would you consider investing your money using a ‘Build-your-own' KiwiSaver scheme or would you prefer keeps things simple and invest with one manager and let them take care of everything?

  • Fabook Messenger Sharing Link
Want advice on how best to invest your money in KiwiSaver? Start by taking the KiwiSaver HealthCheck.
START HEALTHCHECK

You may also like

Can I Withdraw My KiwiSaver Savings Early?

Needing to withdraw your KiwiSaver savings early?

The main purpose of KiwiSaver is to help you save for retirement so you can..

Be Like Jane – Sort Out Your KiwiSaver Account with National Capital

Meet Jane* – one of National Capital’s clients. In this blog post, we’ll take a look at how Jane used National Capital’s..

Investing in KiwiSaver: How Risky Is It?

KiwiSaver is an investment. And with all investing, comes risk. We've explained here what these risks are and how to minimise..

KiwiSaver: How do I spend it in retirement?

Once you turn 65, you have the chance to finally withdraw the KiwiSaver balance that you’ve accumulated throughout your working..

What Happens to My KiwiSaver Account on My 65th Birthday?

Once you turn 65, congratulations! You are now eligible for NZ Super and have access to your KiwiSaver account. 

At National..

Best Performing KiwiSaver Funds - June 2020

National Capital understands that there is an abundance of KiwiSaver providers to choose from and that reading about the..

Subscribe