What I'm seeing at the moment
Giving KiwiSaver advice at the right time
Last week we held the ASSET Magazine KiwiSaver Roundtable (this will be fully published in a couple of weeks' time). One of the surprises was around switching. There is some (unpublished) research which suggests that of the 40,000 members who switched $1.4 billion from growth to conservative funds they would have suffered a combined loss of $160 million.
Assuming those members should be in a growth fund for the long term, they also risk losing another $28 million each year for every year they don’t switch back. That’s an initial average loss of around $4,000 per member and an ongoing average opportunity ‘cost’ of another $700 annually.
When the question posed was whether members can just switch, no questions asked or whether there should be some intervention like a phone call from the provider or even some questions online to ensure sensible decisions were being made.
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