MEDIA RELEASE: 1 March 2020
Financial Advice NZ welcomes rules changes to default KiwiSaver funds announced today by the Government.
“These changes will make a significant difference to the retirement savings of the hundreds of thousands of New Zealanders who are in a default fund,” says Chief Executive Katrina Shanks.
“In particular, we welcome the moves to change settings from ‘conservative’ to ‘balanced’, and keeping the pressure on fees by making them simpler and more transparent.
“Moving the settings up to ‘balanced’ will alone make a big difference, and if making fees more transparent drives them down, then the total change over a lifetime will be significant.
“It remains a concern that of the more than 690,000 people in default funds, around 400,000 have not made an active choice to stay there, but as long as that’s a reality it’s imperative those funds are optimally geared so investors don’t miss out on the best opportunities.
“Financial Advice believes that in addition to these changes in settings, New Zealanders should be able to access personalised financial advice in the workplace to ensure they select the appropriate KiwiSaver provider to suit their needs.
“The Government and the sector working together will help ensure the best outcomes for peoples’ financial health, wealth and wellbeing.
“It’s great that more people are making an active decision over their investment, with the Financial Markets Authority reporting 52,000 default fund members made an active decision about their investment last year – up from 28,000 the previous year – and we need to encourage that.
“Financial Advice NZ’s message is that people should look hard at the scheme they’re in – particularly if they’re in a default scheme – and compare its returns and fees with other schemes.
“This is where the value of consulting a professional financial adviser comes in – to help people make decisions that are right for them.”
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For more information:
Katrina Shanks – katrinas@financialadvice.nz – 021 474 010
