Find­ing a suit­able Ki­wiSaver

Herald on Sunday - - BUSINESS - Di­ana Cle­ment u@DianaCle­ment

Just as jeans and bras come in many shapes and sizes, with too many peo­ple in the wrong fit, Ki­wiSaver comes in nu­mer­ous guises.

The best way to find the right one is to seek an in­de­pen­dent pro­fes­sional such as an au­tho­rised fi­nan­cial ad­viser who can pro­vide un­bi­ased ad­vice. That costs money and not ev­ery­one is will­ing to take this route.

Some providers, such as Gen­er­ate, have ad­vis­ers, although be aware, they’re not go­ing to sell you a com­peti­tor’s prod­uct.

One of the big­gest bar­ri­ers is procrastination, says Sum­mer Ki­wiSaver’s Mar­tin Hawes.

Even if you over­come it, you need to un­der­stand your needs and goals to make the right choice. First, what is your risk tol­er­ance? How would you feel if your Ki­wiSaver bal­ance dropped by 20 per cent overnight? Would you, A: Do noth­ing be­cause you know it will bounce back; or B: Switch into a safer fund? B is the wrong an­swer, be­cause the horse has bolted.

Be­fore shop­ping around, cre­ate a list of at­tributes you’re look­ing for in a Ki­wiSaver, in­clud­ing re­turn af­ter all fees. Do you want rhine­stones, rips or dec­o­ra­tive stitch­ing with your jeans?

You are far more likely to get a good fit if you have an idea of what you’re look­ing for be­fore you go shop­ping.

It’s a re­ally good idea to find out what the fund you’re in­ter­ested in in­vests in. Is it broad or nar­row and de­signed for growth, to avoid ups and downs?

Think about when you’ll need the money. If you plan to buy a home, re­tire or go over­seas per­ma­nently in the next five years then don’t go growth.

If you know that you’ll never get around to re­view­ing your Ki­wiSaver as of­ten as you should or at all then con­sider get­ting a life-stages-type fund that moves you from growth to bal­anced to con­ser­va­tive as you age. The idea, says Michael Lang of NZ Funds Ki­wiSaver, is to give cus­tomers ap­prox­i­mately the right as­set al­lo­ca­tion for their age and stage.

One prac­ti­cal way to com­pare funds is to use a Ki­wiSaver com­par­i­son tool and find out more about the funds it rec­om­mends.

Some­times I like to look at more than one com­par­i­son en­gine be­cause they all have dif­fer­ent al­go­rithms. Try Pock­et­ and’s fund fin­der. The Fi­nan­cial Mar­ket Au­thor­ity’s Ki­wiSaver Tracker also al­lows you to make in-depth com­par­isons.

Bet­ search helps in find­ing eth­i­cal funds, as does Re­spon­si­bleRe­ looks not just at the fi­nan­cial as­pects, but the al­limpor­tant ser­vice as well.

If you pre­fer ta­bles and more de­tail there are in­dus­try web­sites, in­clud­ing Morn­ingstar and FundSource, that cater to this type of search.

Be­ware of re­ly­ing on ad­vice from a rel­a­tive or some­one at the pub. Some­times they’re try­ing to jus­tify their own flawed de­ci­sion.

Binu Paul, founder of Pock­et­, of­ten presents to groups of em­ploy­ees. When he asks for a show of hands of those who have switched Ki­wiSaver, around 10 to 15 per cent have taken pro­fes­sional ad­vice. The ma­jor­ity are “sheeples”, says Hawes, who have lis­tened to friends and fam­ily.

Juno’s Paul Gre­gory had a good point about cus­tomer ser­vice. If you’re in­ter­ested in a provider, try to find its cus­tomer ser­vice tele­phone num­ber and then see how long it takes to get some­one on the phone that sounds in­ter­ested or un­der­stands your is­sues.

A few of the providers, in­clud­ing Mil­ford Ki­wiSaver, sug­gest you look at in­creas­ing the per­cent­age of your in­come you in­vest. I’m all for this. Shav­ing 1 or 2 per cent off your in­come to send to Ki­wiSaver is re­ally very pain­less if you bud­get around it. The pay­off come re­tire­ment is worth it.

Only a small hand­ful are right for you.

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