KiwiSaver members can now leverage aggregate fee, service and returns data to make the most informed decisions regarding their fund selection.
The release this month of Sorted’s entirely rebuilt KiwiSaver fund finder (a mashup of a previous comparison engine of the same name with the platform’s fees calculator) configures and adapts to KiwiSaver investors’ risk profile and circumstances, aiding them in comparing fund options across the entire KiwiSaver market.
For those KiwiSaver members experiencing current volatility in their funds and seeing their balances drop for perhaps the first time, the new KiwiSaver fund finder profiles investors’ risk levels based on their time horizon and attitude towards volatility.
“By right-funding themselves, investors can be confident regardless of market conditions, ride out the corrections, and avoid crystalising losses that result from sudden panic switching,” says Te Ara Ahunga Ora Retirement Commission’s Personal Finance Lead Tom Hartmann.
The new tool projects the dollar amounts of fees to be paid in the years up until retirement. This focus on fees dovetails with efforts across government to keep downward pressure on fund management costs for the consumer and ensure value for money, including inroads made by the Financial Markets Authority, and last year’s default KiwiSaver provider review by the Ministry for Business, Innovation and Employment.
“Once you’ve gauged your level of risk and narrowed down what type of KiwiSaver fund to be looking for, fee estimates are the next best criteria to compare funds,” Hartmann says.
“These costs typically get represented as tiny basis-point percentages, so they don’t seem material to the consumer. Yet especially over long periods of time, it’s no exaggeration to say that they can add up to tens of thousands, and even hundreds of thousands, of difference. The finder shows just that.”
The revamped KiwiSaver fund finder:
- Supports investors to compare and select a fund from the entire KiwiSaver market, based on key criteria:
- The appropriate level of risk for their situation
- The estimated fees they are likely to pay over their entire KiwiSaver experience
- The quantity of services offered by a given KiwiSaver provider
- The fund’s past performance over five years, allowing investors to avoid those funds that have been subpar compared to their peers in similar market conditions.
- Profiles investors’ risk based on their time horizon and attitude towards volatility.
- Calculates the total fees likely to be charged by KiwiSaver providers up to the time members retire.
- Sorts KiwiSaver funds of a given type by the estimated fees, the quantity of services that the KiwiSaver provider offers, and investment returns over the past five years. The tool also displays average fee levels and returns for the type of fund being sorted – giving the proper context to see how a fund compares to its peers over identical time periods.
- Displays service ratings for KiwiSaver providers, based on Sorted’s six-monthly survey gathering data on the range of member services currently being offered. The survey mirrors the present KiwiSaver market. The star ratings are based on weighted scores, acknowledging that certain member services are more significant than others. Specific scores out of 5 are also included for providers’ communications and investment support to members.
- Links directly to more detailed fund information on the Smart Investor platform.
For more information, or to arrange any interviews contact:
Anika Forsman | Director, Stakeholder Relations
Mobile +64 21 246 4302