It launched a KiwiSaver Fund Tracker tool today which allows KiwiSaver members to compare funds on a fee and return basis.
FMA director of external communications and investor capability, Paul Gregory, said members needed to assess schemes on a net-return-after-fees basis.
He said schemes should not "just talk about fees."
"It's an equation and net returns is the answer."
The tracker tool uses the quarterly data supplied by all KiwiSaver schemes. It allows users to see which funds have high fees and poor performance and the opposite scenario.
Gregory says the FMA has built the tool to help KiwiSaver members understand their funds and to promote debate and discussion.
He doesn't see it as tool which should should be used solely to make fund selection decisions. Members should consider many other options such as responsible investing policies and service.
"The information in the KiwiSaver tracker about fees and return is an important factor in considering your investment, but it is not sufficient information to make an investment decision. This is why we link to providers and the Fund Finder tool to discover further information,” Gregory said.
"Success for us would be to see investors being price conscious," FMA director of regulation Liam Mason said.
The Tracker allows people to arrange and sort the data. It shows:
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This comment, if indeed he said it, is another major setback for retail investor outcomes. What he might have meant, being charitable, is that low risk funds with low fees aren’t necessarily the right thing but the industry will use this comment for their own purposes. Investors will chase performance just like they have always done and investor outcomes will suffer as a result.