KiwiSaver survey: the full numbers revealed

In a year that has seen two KiwiSaver providers close up shop, the big bank brands were again dominating fund flows, the second annual Good Returns KiwiSaver survey has found.

Wednesday, September 23rd 2009, 5:30AM 15 Comments

According to the figures, as at March 31 the Commonwealth Bank-owned ASB once more topped the list as the single largest KiwiSaver scheme with almost $450 million in funds under management and over 170,000 members compared to $101 million under management and 72,305 members at the same time last year. The ASB-owned FirstChoice scheme also totallled 11,213 members and $37.3 million as at the end of March this year.

However, ING was the most successful overall provider with a total 212,732 members and $523 million across the four schemes it manages - the ING default scheme, ANZ, National Bank and SIL.

The survey, which represents about $2.6 billion in funds under management and almost 980,000 KiwiSaver members, showed the average member balance as at March 31 this year was approximately $2,650 with a wide range across the providers. The Huljich KiwiSaver scheme recorded the lowest average member balance of $670 while the tiny $1.55 million Brook Asset Management scheme scored the highest average with over $7,045 per member.

Among the larger providers, ING's SIL scheme reported the highest average member balance of $3,463 with its sister bank products managed by ANZ and the National Bank recording the lowest averages of $1,745 and $1,724 respectively.

While the default providers and other major institutions carved out the lion's share of the KiwiSaver market several mid-tier players were also snapping at their heels, most notably the Gareth Morgan scheme which reported $142.2 million in funds under management as at March 31 this year. Fisher Funds ($53.56 million), Fidelity Life ($37.3 million) and Medical Assurance ($35.6 million) have also accumulated respectable funds under management.

During the year two smaller providers the Australian-backed Eosaver scheme and the union-controlled IRIS scheme shut down after failing to meet growth expectations. The 3,254 Eosaver members, who had collectively accumulated almost $6 million at its close, were given three months to select a new provider before being allocated to a default scheme. Meanwhile, IRIS negotiated a deal with the Gareth Morgan scheme to transfer members. It is understood about 80% of the 1,076 IRIS KiwiSaver members opted for the Gareth Morgan scheme.

See the full report on who is winning the battle for KiwiSavers here

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Comments from our readers

On 23 September 2009 at 8:22 am Bill Bray said:

The battle for members - interesting! Does a similar report exist showing individual capital growth. In other words - how good are they at growing my money - since inception and last 12 months?

On 23 September 2009 at 9:02 am Dan said:

I agree, are there reports showing the return on the Kiwisaver funds? the providers are very cagey about providing predicted return figures. Hence i have not yet joined the scheme

On 23 September 2009 at 9:34 am Rebecca said:

Dan - providers won't tell you predicted returns because no-one can say what the markets are going to do - this is the same for all managed funds surely? Each provider should have historical returns available for each of their funds though. Good idea for Good Returns or someone else to report all of these so we can see how they've all done. Would be a massive table though...

On 23 September 2009 at 9:55 am Flaco said:

Bill and Dan.. Kiwisaver is a long term play so chosing a provider on 1-2 years performance is an idiots game. But with the free money from Jonny Key on top of employer contributions, you would also be an idiot not to join.

On 23 September 2009 at 10:27 am Independent Observer said:

To void the next "finance company" event placing further distrust in the minds of investors, an independent research appraisal summarising all of the Kiwisaver providers is urgently required.

This appraisal should be free to all current and prospective investors, and should grade / compare the standard process/philosophy/price/product/people/etc of each of the Providers.

The objective is to ensure that investors are educated with sufficient details to enable them / their advisers to make informed decisions about the risks and returns associated with their Superannuation nest-egg.

On 23 September 2009 at 1:31 pm SJM said:

Kiwisaver benefits are great so no excuse for anyone not being signed up! Even if your really rich you can still profit from the kiwisaver's unique benefits. However I do think a good explanation beyond the benefits and features of kiwisaver is critical ie: basic financial literacy, helps people understand it's a long term thing and that a little bit saved regularly pays off hugely in the long run...not to mention better retention due to real value being added (something banks may realise overtime through using their quick mbrship growth tactics).

On 23 September 2009 at 7:37 pm Ram said:

Great call SJM! I'm a kiwi working in the Aussie compulsory super industry. Education to members is critical so that the public understand that super is a long term investment and that people should not judge funds by past performance over such a short time frame. The sooner Kiwisaver is compulsory and tax benefits are introduced similar to the Aussie system the better. Kiwisaver has many advantages over the Aussie system, however there needs to be more tax benefits to get people to contribute more. Relying on the govt pension in retirement is not the way to go. Start now and build a sizeable nest egg everyone!

On 24 September 2009 at 11:07 am CAW said:

I too would like to see all kiwisaver providers ranked from inception to see how they have grown my money ....is there anywhere to get this?

On 25 September 2009 at 10:22 am DB said:

Morningstar now publish a KiwiSaver performance table in the Sunday Star Times each weeek.
Agree with Flaco to be very careful with just 1-2 year data, but you can get an idea of likely future outcomes by looking at relative performance even over short time periods.
Grosvenor (www.nzkiwisaver.co.nz) has provided some predicted return figures for their funds which might help you Dan.

On 25 September 2009 at 12:06 pm Ray said:

CAW, would you be happy if your provider's scheme had spent the last two years dropping it's unit price?
If not, google dollar cost averaging. Shit, is that investment advice; do i need to disclose?

On 25 September 2009 at 3:07 pm bob Jones said:

LEGALISED THEFT- I note that although hulich has has the biggest member growth they have the lowest average member balance. i wonder if this is because they have teams of people out selling this product door to door to unemployed people and unedcuated people who will never make a contribtuion to the kiwi saver scheme. Hulich have denied they have door to door sales people and have made an example by so called sacking a few advisers, but speak to these advisiers and you soon find out that Hulich knew all along of the sales practice being used and actually condoned it. There whole business model is signing uop as many people as possible, who will never make contributions then skimming off fees for the next 3-4 years out of the government contribution! Legalised Theft and the government lets them do it. Who should be sacked?

On 26 September 2009 at 11:42 am Neil Smith said:

Is Bob's comment designed to drive political popularity by any chance?

My experience is that when adults join KiwiSaver they do it so that they can get $1042 per year off the Government, and need to contribute $1042 per year to do that. No one wins when there is $1,000 in an account for the year of a lifetime!

It costs far more than the $36 - $40 per year that Hulich get from those $1,000 accounts!

I'm constantly amazed at how many of my client accounts have been quietly contributing, and how their balances are rising quickly.

KiwiSaver is about giving Kiwis pride in and motivation for contributions to retirement which are not property based.

Its about Kiwis. Not about politics. When some accounts hit $30,000 the Government make more in taxes than they will in contributions.

The Jo or Joe average who contributed 4% regularly over 2 years and earns a modest amount of money has $6,000 - $7,000 + in their KiwiSaver accounts. It won't take long to make it to $30,000. Then the Government will be the winner.

The problem is that the politicians and nay-sayers want to sabotage the system before it gets a chance!

I've been financial services for years and I've noticed a psychological barrier in the minds of clients. At a certain dollar value, they want their hands on their money, and they sabotage their wealth creation.

Yes nearly everyone of them! It worried me. I thought, here I am protecting their future, and what happens when they get old?

I've heard that in Australia, where employees have to contribute to Super, and where they cannot get their mits on their money their interest in their money piques at a similar level to when my clients wanted their mits on their money here in NZ.

I do not have Hulich as a provider I work with. I do not accept up front payments for signing up KiwiSaver. The client has to pay for it somewhere down the line.

Trail paid for servicing clients, providing seminars, good advice, etc, that they need not pay the earth for. That is a sustainable business model for ordinary Kiwis that want a little bit of help to grow their wealth.

This is not specific investment nor financial advice. Seek out financial advice.

Look for "KiwiSaver" the page on Facebook.
www.liferisk.co.nz

A disclosure statement is available, upon request and free of charge.

On 28 September 2009 at 3:57 pm Tony said:

"It won't take long to make it to $30,000. Then the Government will be the winner."

Hi,
Please explain the above statement...is a KiwiSaver account somehow affected negatively taxwise when $30,000 is reached?

On 29 September 2009 at 5:05 pm Ray said:

No Tony, I believe Neil refers to the zero sum game for the state, when that sort of sum ($30K)is reached by the saver, given of course all investment returns pay tax on profits; versus the money the state gave the saver original,or up to that point.

I'd suggest Hulich absorbing the IRIS scheme dropped its average per punter account balance...

On 29 September 2009 at 7:09 pm Tony said:

Thanks.
"given of course all investment returns pay tax on profits".
My understanding is that profit on NZ shares and "some" Australian shares is not taxed..perhaps I'm wrong and this just refers to share dividends...
in any case the Kiwisaver unit price displayed by different funds should be a true figure?? (tax etc included)
Anyway my caveman understanding of Kiwisaver is this...
When you sign up the govt gives you a grand then as long as you put in minimum $20 a week they give you a grand a year...called a tax credit but in fact it's a handout of Kiwisaver units to the value of a grand.
Even someone who put the minimum in would make 100% less fees a year plus/minus whatever the fund performance is which I guess is what makes Kiwisaver a no brainer....
In fact to lose on Kiwisaver you would have to contribute so much as to make the freebie $1000 plus annual $1000 negligible and then select a fund manager who would decimate your contributions lol.
Unless there is a law change (eek).

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KiwiSaver survey: the full numbers revealed

In a year that has seen two KiwiSaver providers close up shop, the big bank brands were again dominating fund flows, the second annual Good Returns KiwiSaver survey has found.

Wednesday, September 23rd 2009, 5:30AM 15 Comments

Comments from our readers

Commenting is closed