KiwiSaver fees fall, some returns also

AUCKLAND: KiwiSaver fees have fallen in the past year but so have average returns for funds with a higher proportion of share investments.

Based on an account balance of $20,000, the average annual fee on a growth fund has dropped by 8% in the past year to $181.64, research by Canstar has shown.

Balanced funds also had a 6% drop in the average annual fee to $160.79 while conservative funds had the smallest drop of 4% to $122.49.

Providers have been under the pump to do better on fees as both the regulator — the Financial Markets Authority — and the Government had put the spotlight on them.

A review of the KiwiSaver default providers, launched this year, will also take account of fees when it comes to appointing the providers for the next sevenyear term.

The present term ends in 2021. Jose George, Canstar New Zealand general manager, said that pressure on providers to lower fees was having an impact.

‘‘It shows providers are working hard to improve net returns over the long term for their members.’’

Competition at the cheapest end of the market has heated up this year as BNZ cut its fees as it moved to compete with low cost providers Simplicity and Juno.

However, returns have been more mixed.

Average net returns on growth funds dropped to 7.77% this year from 9.01% in 2018, while balanced funds dropped to 6.45% from last year’s 6.61%.

Conservative funds, which have a lower investment in shares, were up, rising from 4.54% last year to 5.28%. —