KiwiSaver fund managers rake in $40m in fees since the start of January
KiwiSaver fund managers charged more than $40 million in fees since January 1 and will likely charge $525 million by end of the year, KiwiSaver provider Simplicity says.
More and more first-home buyers are using their KiwiSaver balances for their deposits. And as LVR rules are squeezing an already squeezed group, this claim by Simplicity adds further concerns about how first-home buyers can afford to get onto the property ladder.
To highlight how much KiwiSaver members are paying in fees, Simplicity launched a new online fees clock. The fees show that KiwiSaver members are paying over $1,000 per minute, $60,000 per hour, 24 hours a day, Simplicity claims.
Simplicity managing director Sam Stubbs said KiwiSaver members need to understand the enormity of the fees they’re paying, in a way that’s easily understood. This year KiwiSaver suppliers will have to disclose their total KiwiSaver fees in dollars and cents for the first time.
“KiwiSaver fees are the largest household expense people have never heard of. Over their lifetime, an average KiwiSaver member will pay $54,700 in fees, way more than they will spend on power or their mobile phones.
“2018 is going to be a huge wake up for Kiwi Saver members, who’ve been kept in the dark,” Stubbs said.
“When members finally understand what they’re actually paying in fees this year, they could be shocked. Many still assume they only pay an annual administration fee of $20-$30 because management fees (which are often higher) are not disclosed in a manner that people can understand.
“Most of the biggest providers still have management fees 2-3 times as much as Simplicity’s for comparable funds. They had economies of scale years ago, they’re just addicted to the profits they make from Kiwi Saver,” Stubbs added.
Related stories:
Advice changes will ensure Kiwis get good financial advice, minister
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More and more first-home buyers are using their KiwiSaver balances for their deposits. And as LVR rules are squeezing an already squeezed group, this claim by Simplicity adds further concerns about how first-home buyers can afford to get onto the property ladder.
To highlight how much KiwiSaver members are paying in fees, Simplicity launched a new online fees clock. The fees show that KiwiSaver members are paying over $1,000 per minute, $60,000 per hour, 24 hours a day, Simplicity claims.
Simplicity managing director Sam Stubbs said KiwiSaver members need to understand the enormity of the fees they’re paying, in a way that’s easily understood. This year KiwiSaver suppliers will have to disclose their total KiwiSaver fees in dollars and cents for the first time.
“KiwiSaver fees are the largest household expense people have never heard of. Over their lifetime, an average KiwiSaver member will pay $54,700 in fees, way more than they will spend on power or their mobile phones.
“2018 is going to be a huge wake up for Kiwi Saver members, who’ve been kept in the dark,” Stubbs said.
“When members finally understand what they’re actually paying in fees this year, they could be shocked. Many still assume they only pay an annual administration fee of $20-$30 because management fees (which are often higher) are not disclosed in a manner that people can understand.
“Most of the biggest providers still have management fees 2-3 times as much as Simplicity’s for comparable funds. They had economies of scale years ago, they’re just addicted to the profits they make from Kiwi Saver,” Stubbs added.
Related stories:
Advice changes will ensure Kiwis get good financial advice, minister
FMA releases KiwiSaver Tracker
