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Who are the providers managing your KiwiSaver money?

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Have you done enough research about the provider managing your KiwiSaver money?

It is very important to find a competent KiwiSaver fund manager, however, not enough people pay attention to who the actual company is that is managing their KiwiSaver money. As a result, many do not understand that while many KiwiSaver providers look the same, they are actually quite different when you look at the finer details.

This blog post today will show some of the differences between KiwiSaver providers. 

What characteristics of KiwiSaver providers are covered in this article?

For simplicity sake, this blog post covers just three different characteristics of KiwiSaver providers.

  1. Investing philosophy
  2. NZ Provider, or overseas
  3. Funds under management

We would like to say that these factors are not an exhaustive list of the different characteristics of KiwiSaver providers. There are many other characteristics of KiwiSaver providers that should be kept in mind when choosing one that’s appropriate.

Investing philosophy

I have gone into and taken some information from five KiwiSaver provider’s Statements of Investment Policy and Objectives (SIPO’s). The information below is not a full description of each provider’s investing philosophy, but rather small segments. By showing this information to you, I hope to reveal that even though many KiwiSaver providers seem to look the same, they all have their differences.

KiwiSaver Provider

Some Information About Their Philosophy

Source

Simplicity

Passive management, not-for-profit

Simplicity SIPO

Amanah

Ethical investments according to Islamic principles

Amanah SIPO

Juno

Active management, believes "skilled active investing delivers better long-term results"

Juno SIPO

KiwiWealth

Active management, believes "the role of an investment manager is to protect the value of investors’ capital and each Fund’s purchasing power, then enhance wealth through the active selection of securities"

KiwiWealth SIPO

BNZ

"Both active management... and passive management... have a place in investment management."

BNZ SIPO

As we can see from the data, the KiwiSaver providers have significantly different investing philosophies. For example, Simplicity is a not-for-profit that has come onto the scene in recent years. Simplicity believes in passive management because they “believe that using index funds and having very low costs will return investors more money over time” (Simplicity SIPO page 4).

Compare this approach with Juno. Juno believes that "skilled active investing delivers better long-term results" because the market does not always value assets correctly. More unique providers such as Amanah base their investment philosophy on ethical principles such as religious principles. 

As a result, it is safe to say that the investing philosophies of different KiwiSaver providers are not the same. 

NZ provider or overseas

New Zealanders have had many KiwiSaver providers to choose from, some of which are from New Zealand and some of which are overseas companies.

Many of the biggest KiwiSaver providers have their profits go overseas. This includes companies such as ANZ, ASB, BNZ and Westpac. The biggest New Zealand KiwiSaver provider is KiwiBank, and there are many others you can choose from if investing Kiwi is a priority for you. 

I go into more detail about the differences between KiwiSaver schemes from New Zealand owned providers and banks in another blog post. Read this blog post linked here if you wish to find out more about these differences.

Funds under management

Funds under management is another area which can indicate the presence of variety between different KiwiSaver providers. Below is a breakdown of the quantities of funds under management for numerous schemes.

Funds Under Management

Number of Schemes

Total Assets ($M)

Total Membership

Under $10m

3

22

847

$10m to under $100m

4

107

4,271

$100m to under $500m

8

1,824

65,382

$500m to under $1,000m

4

3,209

99,044

$1,000m to under $5,000m

10

23,657

1,117,917

$5,000m and over

4

33,136

1,738,603

(Source: KiwiSaver Annual Report 2020)

At National Capital, we do not show a large preference for any of these individual factors. Instead, we take into account numerous factors to come up with personalised recommendations for each of our clients. If you would like to find out which KiwiSaver fund might be best for you, you can start by filling out our KiwiSaver HealthCheck

One KiwiSaver provider is not clearly better than the rest

Due to the differences between different KiwiSaver providers, one can not simply say that one KiwiSaver provider is clearly better than the rest. At National Capital, we believe that different providers offer different strengths and, hence, choosing the most appropriate one for you depends on many factors. We use background research we have collected about different providers and funds to find the right one for you. We also take into account your personal circumstances too.

It is important that any decision regarding which KiwiSaver fund provider to choose is informed by research. To do this research, you could spend hours looking online for the specific information you need to make this decision. However, we feel that it is best to use National Capital’s free advisory service to get all the information from a team of trusted experts.

It’s best to get advice from National Capital

National Capital offers a free advisory service to help people find which KiwiSaver provider and fund is best for them. We have researched many fund providers to be able to recommend one that is best considering your personal circumstances. 

The great thing is that you can follow the process all from the comfort of your own home. You also get the privilege of talking to a real person about your specific KiwiSaver needs and which KiwiSaver fund is best for you.

Want to take a step towards being financially secure? Take another step towards financial security today by filling out our simple KiwiSaver HealthCheck. It’s easy to do and will not take you long.

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