Forget returns and fees, investors told
Treasury this month released a report by Andreas Heuser that showed neither fees nor returns were significant drawcards for KiwiSaver members – who were instead more swayed by bank marketing tactics.
Heuser suggested it could be a problem of consumers’ lack of knowledge and engagement.
“Providers do spend some time and effort educating members and complying with their regulatory obligations …However, any incentive to improve consumer knowledge levels is not aligned with the economic incentive to retain customers and revenue levels,” Heuser said.
“A significant lift in the level of consumer knowledge of the effect of fees and returns on the balance available at retirement would improve the discipline of the market on KiwiSaver providers.”
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