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KiwiSaver awards - do they really matter?

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There’s a fair amount of award ceremonies for different Kiwi industries. There’s the New Zealand Music Awards, the New Zealander of the Year Awards, and even the New Zealand Ice Cream Awards.

But, did you know that there are also awards for KiwiSaver schemes? But just how useful are these awards, and should you care about them? Let’s find out in this blog post.

What are these “KiwiSaver awards” you’re talking about?

Firstly, I’d like to clarify that there are multiple KiwiSaver award giving organisations. These awards are not generally on prime time television, or have a bazillion special guests like some other award ceremonies. But, that doesn’t mean you should ignore them completely.

These KiwiSaver awards are given by organisations to recognise the KiwiSaver schemes that they believe are the best. Examples of award giving organisations are Canstar, Zenith and Good Returns.

Lots of KiwiSaver fund managers win awards for numerous reasons. However, just because a fund manager is deemed the best KiwiSaver provider by an institution does not mean it is the best KiwiSaver provider for you. We will explain further as to why this is the case during this blog post.

Comparing the different evaluation methods used to evaluate KiwiSaver providers

Let us firstly compare some different methods that organisations use to evaluate KiwiSaver providers. For this, we have picked three different KiwiSaver award giving organisations.

  1. Canstar

  2. Zenith NZ Fund Awards (formerly known as the FundSource Awards), and

  3. Good Returns

Canstar KiwiSaver Star Ratings (Source)

Zenith NZ Fund Awards (formerly known as the Fundsource Awards) (Source 1 and Source 2)

Good Returns (Source)

  • Rating system

    • 70% based on performance

    • 20% based on features of the fund

    • 10% based on price

  • Funds must pass through a “rigorous” qualitative and quantitative analysis first

  • After passing this test, funds get analysed on a “performance based approach”

  • Funds are measured on quantitative and qualitative criteria.

  • Fund performance is a key measure.

  • Measures commitment to NZ market

  • Allows people to “have their say” for some of their awards

Different institutions tell us different information regarding what they look for. However, one thing is clear. When deciding which fund they believe is the best, fund performance is generally considered a key measure. For example, Canstar’s rating system gives a 70 percent weight to fund performance.

Having said that, the processes that different institutions use to come up with their recommendations are not the same. And so are the weights that they put on different criteria. There are clear differences between these organisations. 

With this may lie a potential problem if you only use awards to judge whether a KiwiSaver fund is right for you. A Consumer survey says that Kiwis aren’t just worried about returns and fees. Below is the data they found based on their 2020 KiwiSaver survey.

  • 49 percent of respondents “want a fund that provides good returns and invests responsibly – both are equally important” 

  • 30 percent of respondents “want a fund that provides the highest returns possible” 

  • 14 percent of respondents “want a fund that invests responsibly, even if it provides a slightly lower return”

  • 6 percent of respondents “want a fund with the lowest fees possible” 

63 percent of respondents mention that they want to invest in funds that invest responsibility. By blindly following these award recommendations, you cannot guarantee that your fund will be investing in a way that you want them to be.

This is one reason why it is important to make an informed decision based on research. And this is where filling out our KiwiSaver HealthCheck can help.

Comparing different KiwiSaver award winners

 

Canstar Awards 2020 - KiwiSaver (Source 1, Source 2 and Source 3)

Zenith Fundsource Awards 2019* KiwiSaver Manager of the Year (Source)

Good Returns 2020 KiwiSaver Manager of the Year (Source)

Provider of the Year: Milford Funds Ltd

Most Satisfied Customers: Simplicity

Outstanding Value: BNZ, Fisher Funds and Milford Funds Limited



Winner: ASB Group Investments

Finalist: Booster Investment Management Limited

Finalist: Fisher Funds Management Ltd

Winner: Simplicity KiwiSaver

Finalist: ANZ KiwiSaver

Finalist: Fisher Funds KiwiSaver

Finalist: Milford KiwiSaver

* Zenith did not give out a 2020 KiwiSaver Manager of the Year Award due to Covid-19.

You may look at this list and ask, “Almost all of the winners of these awards are different from each other. Why is this the case?” 

This is because these institutions have different ways of selecting their award winners. This isn’t to say it’s a lottery as to who wins. Far from it. All we are saying is that different organisations with different processes can come to contrasting conclusions as to who is best. 

How useful are these KiwiSaver awards?

Here’s what we say at National Capital. 

To say that these awards are useless is a mistake. They are given out by people who know their stuff in the industry. And they give quite a bit of thought regarding who they give their awards to. 

So suggesting they are useless is not accurate at all. Using these awards to find the KiwiSaver scheme best for you is likely better than picking at random. 

However, to say that these awards should be your only consideration is also a mistake. As mentioned earlier, the judges from each organisation use a set of criteria to decide which KiwiSaver fund manager is the best. But, your criteria for what the “best” KiwiSaver scheme is could be completely different.

Hence, although they are good to know about, they should not be your only deciding factor when choosing a KiwiSaver fund manager.

So which KiwiSaver fund is best for me? 

There is no one-size-fits-all answer to this question. No one KiwiSaver fund is right for everyone.

This is why National Capital offers a free financial advice service. Our KiwiSaver HealthCheck will help you pick the right KiwiSaver provider and KiwiSaver fund for you. And it doesn’t take long to fill out.

After filling out our KiwiSaver HealthCheck, you will get the privilege to talk to a real financial advisor about your circumstances. During this session, you will get free personalised advice which answers questions like:

  1. What KiwiSaver fund manager is right for me?

  2. Which type of KiwiSaver fund is right for me?

  3. What else do I need to know so that I can prepare for my retirement?

And best of all, you will not have to pay anything for it. 

So make sure you take a stride towards a better future and fill out our KiwiSaver HealthCheck. Your future self will thank you for it.

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