Competition in the KiwiSaver sector ticked up in the latter half of 2023 as monthly transfer numbers held above 10,000 from May to December, new Inland Revenue Department (IRD) statistics show.
If the scheme transfer rate of the last eight months of 2023 holds, the number of members swapping providers would verge on 140,000 – or almost 20,000 above the previous financial year and in line with historical trends.
For the 12 months to the end of June 2023, the IRD recorded just over 121,400 member transferred KiwiSaver providers – a decade-long low.
But the challenger schemes appear to have picked up the pace during the latter half of last year with the arrival of self-select provider, Sharesies, adding to the intrigue.
As the Investment News 2023 KiwiSaver report shows, three of the smaller providers – Kōura, Aurora, and InvestNow – recorded the largest annual growth-rates of about 100 per cent or more with the latter two climbing above $100 million under management during the 12-month period.
The Sharesies scheme almost hit that milestone by the close of 2023, according to the latest Melville Jessup Weaver (MJW) investment survey.
“As of the end of December, the Sharesies KiwiSaver Scheme had passed $92 million – likely catapulting it up the rankings,” the MJW report says.
Kernel, which opened its KiwiSaver scheme in 2022, has also made inroads, reporting about $94 million under management at the end of September, or more than double its March 31 figure of $43 million.
Despite the early wins, however, the upstart schemes – all with different value propositions – have not seriously dented the large institutional incumbents or even other more established local favourites such as Milford, Generate, Booster and Simplicity (which managed about $16.4 billion collectively by March 31 last year).
The mounting KiwiSaver competition comes, too, amid several ownership reshuffles in the market.
Fisher Funds, of course, is still digesting its $310 million takeover of Kiwi Wealth, completed last year. At the same time, Fisher part-owner – the influential US private equity player, TA Associates – is reportedly trying to offload its one-third stake in the wealth manager.
The NZX is now a dual-scheme operator after formally purchasing the actively managed QuayStreet KiwiSaver last year from Craigs Investment Partners while also promoting its mostly passive SuperLife option.
And three broker-oriented wealth management firms – a sector that hasn’t exactly warmed to KiwiSaver – gained exposure to other schemes following end-of-2023 deals.
Jarden will have a stake in the BNZ KiwiSaver scheme once the convoluted FirstCape entity (that includes the JBWere NZ advisory network) materialises while Forsyth Barr, which owns the $300 million or so Summer KiwiSaver, has picked up almost 15 per cent of Kōura as part of its buyout of Hobson Wealth in December.