In a recent whitepaper, ANZ said a growing focus on fees, particularly from younger investors, was a concern.

ANZ general manager wealth and products Ana-Marie Lockyer said instead of focusing on finding the lowest fees possible, KiwiSaver members should look at what returns were being generated, after fees were taken out.

“Net returns – that’s what grows one’s retirement balance,” she said. “We absolutely believe active management can add value over time.”

She said, after 10 years of the KiwiSaver scheme, there was enough data around to prove that active managers were delivering results for the fees they charged.

She said there was 247bps difference in returns after fees between the best and poorest performing growth funds over that decade, 82bps between the default funds and 164bps between the balanced funds.

“We know there are actively managed default funds and passively managed default funds...remember 100bps gives you a $100,000 increase in your retirement outcomes.”

She said fees were one “lever” that members should consider but the discussion needed to mature beyond the idea that cheap was always better. Consumers should have choice and understand the different costs incurred by different funds with different levels of service, she said. 

"We fully support improving disclosure of fees and look forward to full transparency next year across all providers, however don't believe KiwiSaver fees should be prescriptively regulated in recognition that providers manage investments differently and offer varying levels of services and tools.  What is important it that alongside the fees that providers articulate what members will receive for their fees and we would encourage continued education for members about returns after fees given that will drive retirement outcomes."

There was a continuing need for financial advisers to offer advice on KiwiSaver, she said.  “KiwiSaver is one of many ways people are saving for their futures. Advisers are in a great position.”

ANZ had seen the best results in KiwiSaver from advised customers who were meeting someone face-to-face to discuss their accounts, she said. “They’re making the right decisions for them, helping build their balances.”

When ANZ asked its KiwiSaver customers who were dealing the bank directly whether they wanted personalised advice, only three out of 3000 took up the offer.

Lockyer said that was disappointing but she hoped that when balances grew, so too would clients’ interest in advice.

“All providers have an obligation to ensure advice is available.”

To read the full transcript, click here