When you’re younger, retirement seems a million miles away, and planning for your financial future is easy to put off. But, when it comes to things like KiwiSaver – which is one of the best ways to grow your wealth – time in the game makes all the difference. To save you from all that research, we’ve summarised five key things to look for when searching for a provider who can get your KiwiSaver on track asap.
Track Record Matters
Your KiwiSaver provider’s ability to produce good returns is critical. Every KiwiSaver provider manages funds differently, and results can vary significantly. Over time, that can really mount up. With the power of compounding returns, even a 1% better result each year can make a massive difference to your balance at retirement, potentially increasing your savings by tens of thousands (or more, depending on the fund you’re in and the time you have).
When you’re weighing up which manager to go with, look at their investment performance over a decent period of time (e.g. ten years or more). Although past performance is not a guarantee of what’s to come, it does give you an indication of how skilled a provider is, and how consistent their work has been.
There are lots of online tools you can use to check out the track record of each provider and the returns they have delivered, including each provider’s own website. But, for a more independent overview, check out Morningstar’s quarterly KiwiSaver Survey to easily compare providers.
Do they Walk the Talk?
When you’re choosing someone to manage your KiwiSaver (and protect your future wealth) trust is all-important. It’s easy for a provider to tell you what you want to hear. But how can you know if they really believe what they’re saying?
Well, one way is to look at how their portfolio managers invest their own money. At Milford, we have a policy that all staff can only invest their own personal KiwiSaver money in the Milford KiwiSaver Plan. Because Milford employees have their personal money in the same funds as our clients, you can rest assured they’ll be treating your cash as though it were their own!
It’s kind of like the difference between a travel agent and a pilot. A travel agent can suggest flights and recommend airlines – but they don’t really have anything riding on it if that carrier turns out to be a dud.
The actual pilots though, have real skin in the game. They’re not only trying to get you to your intended destination in one piece – they’re also trying to get themselves there safely. When you’re as committed as that, of course you’re going to take more care with the decisions you make!
Good Comms Count
Great communication and plenty of transparency is vital. After all, it’s your money – you should know where it’s invested, why it’s invested there, and how it’s performing.
We touch base with our clients at least once a month (and more frequently in times of market uncertainty). We’ve got a mobile app and an online portal so you can check your balance, your contributions, the performance of your money and the returns you’ve been seeing over different time periods. You can also see how your funds are made up, and which companies your fund is invested in.
Of course, you can always reach an actual human any time you feel like a chat about your investments too!
Focus on Value
Like anything in life, some providers charge higher fees, and some charge lower fees. But the thing that really matters is what you get in return, and that’s your investment returns after fees and tax have been deducted.
There are other things to look at too, beyond just fees and returns. Things like expert guidance, online planning tools and the feeling of confidence your provider gives you – are also really important and should definitely be considered when you’re choosing who to invest with.
Lastly, making sure you have access to financial advice is another important factor to consider. Does your provider give you access to advice from financial experts committed to seeing you get the most out of your savings?
At Milford, we have several user-friendly tools to make your journey even smoother. That includes our KiwiSaver Calculator, which takes info about your current situation and maps out what your KiwiSaver balance could end up looking like over time.
Make your Money Work Hard
You work hard for your money. And it should work hard for you. At Milford, it’s our mission to ensure every one of our clients’ feels like their money is always working hard to ensure they reach their personal goals.
That client-focused approach has seen our KiwiSaver Plan win the Consumer People’s Choice award the last 6 years running, and our company regularly recognised with industry accolades. In addition, our KiwiSaver Conservative, Balanced and Growth Funds have been the #1 performing KiwiSaver Funds over the last 10 years in their respective KiwiSaver Fund categories according to Morningstar’s latest KiwiSaver survey.
If you’re ready to get started on your journey to financial freedom, we’d love to work alongside you! You can join or switch to Milford’s KiwiSaver Plan in just a few minutes right here.