Most New Zealanders are clueless about KiwiSaver fees and not much better informed about their funds’ performance, a new survey has shown.
The survey was released by the Commission for Financial Capability and the Financial Markets Authority.
It found fewer than half of the respondents knew even roughly what they were paying in fees and two-thirds said they would expect to continue to pay the same if their account balances increased.
When prompted to think about it, just over half agreed that fees and returns were equally important in reaching their retirement goals.
The FMA’s director of external communications and investor capability Paul Gregory said: “It’s good to see people recognise that, now we want them to do something about it. The reason for doing this survey was to prompt them to think about two of the most important factors in their KiwiSaver scheme – the fund they are in and how it performs, and the fees they are paying for those returns.”
CFFC group manager of investor education David Boyle said: “Most of us are pretty careful about other kinds of fees – you wouldn’t take on a real estate agent without finding out what it was going to cost you. Nor would you pay someone $60 to mow your lawns if you could get it done for $40 – unless they trimmed your hedges too. So why pay KiwiSaver fees without knowing how much they are and what you are receiving over and above the cost of managing your money?”
Only half of respondents knew how their fund had performed this year, and only a third knew how it had done over the past five years.
Most expected solid returns over the next 12 months – more than half of those in a conservative fund expected up to 4% return and 8% of those in a growth fund expected more than 10%.
Almost 90% said they knew how much was in their KiwiSaver account, to the nearest $5000.