More KiwiSavers switching out of default funds – provider

"Overall, this is a great result," says firm

By Krizzel Canlas

03 Aug 2018

The recent change in regulation requiring transparency on KiwiSaver statements has caused a spike in KiwiSaver switches, says KiwiSaver provider Milford Asset Management.

Starting April 1, fund managers were required to show KiwiSaver investments and fees in dollar figures. This was a result of work by the Commission for Financial Capability (CFFC), the Ministry of Business, Innovation and Employment and the Financial Markets Authority (FMA) to improve the transparency of reporting for KiwiSaver members.

According to Milford, it has seen switches into its KiwiSaver Plan from other providers double since the new transparent statements were released in June.

“It appears the change in regulation is having its intended impact,” Milford CEO Troy Swann said. “It’s giving people more information on their KiwiSaver account, which allows them to consider whether or not they’re receiving good value-for-money. What we’re seeing is people are now able to make more informed decisions on their KiwiSaver account, and those that are not happy are voting with their feet. This is a very positive step.”

Milford’s Active Growth Fund is the top performing KiwiSaver fund since the inception of KiwiSaver in 2007. In 2018, Milford won Consumer NZ’s People’s Choice award for highest KiwiSaver customer satisfaction.

“Overall, this is a great result,” Swann said. “Having more KiwiSaver investors switch out of default funds and into more suitable funds for their needs creates more competition and will make all providers step up their game.”