Banks losing appeal for KiwiSavers
For the year ended March 31, the five major banks collectively had 28,139 members transfer out of their KiwiSaver funds, which represented 58.7% of the number that transferred in.
“The negative association between fund and member flows and the KiwiSaver provider being a bank was a real surprise,” said Dr Claire Matthews, Massey’s director of financial planning.
It follows her research reported earlier this month by Good Returns, which suggested that being able to see a KiwiSaver balance online was both a benefit and a drawback.
She said: “This might mean that members are constantly monitoring their account and their funds’performance – and choosing to move when performance is poor.”
Dr Matthews said the research showed the immaturity of investors in KiwiSaver and the need for education and advice to ensure they were making appropriate investment decisions.
“While investors do appear to be chasing returns and avoiding fees, that’s not always the best approach to a long-term investment,” she said. “Both returns and fees are important but it’s a sign of an immature market when investors chase historic returns with an expectation that they provide some indication of future returns, which of course they don’t.”
