Clive Fernandes runs NationalCapital.co.nz, an online platform that helps New Zealanders understand the KiwiSaver scheme and what fund and provider might be best for them.

He said the downturn in March has shown many people that KiwiSaver was not just a high-yielding savings account – and that they needed to know more about it.

“We’ve seen a lot of people searching online and definitely see a much larger number of them looking for advice.”

The questions were often not sophisticated, he said, and related to people wondering whether they were in the right fund.

Fernandes said approximately 3.74% of members from KiwiSaver growth funds and 3.01% of KiwiSaver members in balanced funds switched in the March quarter, mostly into more conservative funds. That would cost them over the long term.

“For this group alone, we estimate the collective loss of funds to be $925,664,182 in 10 years from now or $3,578,215,119 in 20 years.”

He said, in some cases, advice from his team had helped some of those clients to realise they had made the wrong choice and to switch back.

In general, investors in funds with good advice representation seemed to have got through the disruption with less panic, he said.

The growth funds which took the smallest hit, in terms of investor base, were Mercer Growth, which gained 2.3% and Milford Active Growth which only lost 0.4% of investors. Both Mercer and Milford work with advisers outside of their organisation to provide KiwiSaver advice to their investors. “These figures show those KiwiSaver members who had greater access to advice, were less inclined to switch, suggesting the value of advice – quite literally – particularly in a time of uncertainty,” Fernandes said.

“If those switchers had access to the right advice in the first place, the number of people switching funds would’ve most likely been significantly less. The question now begs, will they seek advice to avoid missing out in the long term.”

He said access to advice has been a known problem in the industry for a long time and KiwiSaver providers needed to add it as part of their service offering and fee structure. The industry, regulators and Government needed to consider the value of advice, he said.

“Ultimately we need to ensure that Kiwis end up better off in the long run. Just aiming to have the lowest fees to attract new clients is not in the long-term interest of KiwiSaver members.”