When Should I Switch My KiwiSaver?

When I was not happy with my KiwiSaver fund manager and the way it was invested in then I knew I could switch my KiwiSaver … and I did.

It’s easy to switch and if you are not happy with your current KiwiSaver then you should change.

Is it easy to change KiwiSaver provider?

When KiwiSaver was established in 2007 the fund managers had to make it easy to sign up and easy to switch. If you do decide to switch KiwiSaver providers you simply complete a membership form for the new provider. They will then process this and tell Inland Revenue Department and arrange for your funds to be transferred. This will typically takes between 10 and 35 days and with a couple of exceptions (Aon charge $35, and Booster charge $30) it is free to switch.

You should always make sure that you are transferring for the right reasons, but if you want to switch your KiwiSaver then you should get on and do it.

There is no reason to wait.

About The KiwiSaver Providers

In New Zealand there are a range of KiwiSaver providers from the big banks and investment institutes to smaller or less known boutique fund managers.

When you first sign up you may get to select a provider or you may be put into a default provider which is really meant to be a placeholder until you have had a chance to look at your options and switch to a preferred KiwiSaver provider.

What is the best KiwiSaver scheme?

There is not one scheme that everyone would agree is the best KiwiSaver scheme as people will have different ways to decide this. Some people focus solely on how much the returns are which is a risk with any investment as all returns are for a period that has already finished, and future returns may be quite different. Others want the lowest fees and that generally means a passive fund rather than an active fund which typically provide higher returns. Many top advisers will focus more on the way providers manage your money and look at the things that really make a difference to the way that they invest your money and make sure that they are comfortable that they do a good job.

You should not get convinced to switch based on being able to see the balance on your banking App, or because one of the providers that spends money advertising a specific period when they had the best returns for one of their funds.

There is more to selecting a KiwiSaver provider than having a fancy App or just looking at past returns.

Features That Are Important But Often Ignored

There are three key things that your KiwiSaver should have;

  1. Diversification – this is a fundamental concept with any investment portfolio like Kiwisaver.
  2. Managing asset allocation as you age – KiwiSaver providers have various asset allocations that you can select or are automatically selected depending on your tolerance for risk and time for an investment.
  3. Downside mitigation – this is important with any investment and including KiwiSaver. Some use Universa which has acted like an insurance policy for those institutional investors that opted for the protection offered with the Black Swan Protection Protocol.

These are three key components of an investment structure that we believe you should consider when selecting which fund manager you want to look after your KiwiSaver.

Let’s check what your KiwiSaver provider offers – please select your provider to see how protected you are:

If your KiwiSaver provides these three features then you have chosen well, but if not you should look to switch your provider to one that does offer them.

Should I Switch My KiwiSaver Today?

If you are not happy with your KiwiSaver and have worked out which provider you would be happy with then why not get on and switch today. It’s easy to switch and as financial advisers we can help answer your questions and process the switching of your KiwiSaver.

You can contact us to arrange.

Your current provider does not deserve looking after your KiwiSaver if they are not already providing what you need, and many of them provide gimmicks like Apps rather than the key features mentioned.

You also do not need to wait for your KiwiSaver to recover before switching – you should be better off switching to a provider that has the Black Swan Protection Protocol so recovery is faster.