Are you one of the many people who are still with the KiwiSaver fund you were defaulted to when starting a new job? If you are, have you considered changing providers or funds? For a brighter future, we believe there are three key reasons to consider changing from your default KiwiSaver fund.
1. You could be doing better
Over the long term default KiwiSaver funds are lower risk and lower returning funds. They are purposely designed this way. The original thinking from the Government, was investors would be ‘defaulted’ to one of these funds for a short time until they made a decision as to which fund and/or which KiwiSaver provider was appropriate for them. The problem is people are busy and life gets in the way. So, tens of thousands of people have stayed in their default fund, generally earning lower returns than those that have chosen higher-returning growth funds. For example, over the last 10 years data from investment research company Morningstar shows KiwiSaver default funds have averaged an after-fee return of 5.7% p.a. Whereas growth funds have averaged an after-fee return of 9.5% p.a. If you forecast these returns over a person’s working career, the difference at retirement can easily be tens of thousands of dollars or more.
2. You could be happier
Consumer NZ conducts KiwiSaver research each year to select the winner of their People’s Choice Award. One of the findings from this year’s research was that people who hand-picked their KiwiSaver provider were more satisfied than those that didn’t. The research also found those that chose Milford’s KiwiSaver Plan had the overall highest satisfaction rate.
3. It was only meant to be temporary
The Government created the KiwiSaver default setting as a temporary holding place for new KiwiSaver members until they made an active decision on where to invest their savings. So, if you’re still with your default fund, we’d encourage you to shop around.
At Milford, we’re not a default provider. We’re an award-winning investment specialist and we’ve helped thousands of people like you grow their savings. By combining our world-class investment expertise with an insatiable curiosity to do better, we’ve delivered excellent returns for our clients over many years.
If that sounds like the kind of company you’d like looking after your savings, why not join our award-winning KiwiSaver Plan right now?