The number of members swapping KiwiSaver schemes jumped about 9 per cent over the 12 months to June 30 to hit an all-time high of almost 163,000, new Inland Revenue Department (IRD) data shows.
According to the IRD annual statistics, the number of KiwiSaver member transfers over the 12-month period ending June 30 was up more than 5,000 compared to the previous peak of almost 158,000 recorded over the 2014/15 year.
In its 2015 KiwiSaver report the Financial Markets Authority (FMA) noted the high number of transfers over that period.
“KiwiSaver members should receive appropriate advice and support when they transfer schemes, and we continue to be concerned about possible mis-selling, particularly sales processes and advice about switching,” the 2015 FMA report says.
The following year KiwiSaver transfer numbers dropped to about 140,500 before rising to just under 150,000 over the 2016/17 period.
Last March the FMA issued new guidance that confirmed advisers or sales staff could talk about the pros and cons of transferring KiwiSaver schemes without triggering full-blown personalised financial advice obligations.
At the time, FMA director of regulation, Liam Mason, said: “Our primary objective in this sector is for New Zealanders to get the help they need to make good decisions about KiwiSaver.
“We’ve listened to the industry who told us our previous approach was too restrictive. Now that we have removed a factor providers said was an obstacle, we expect to see more people getting advice.”
As detailed in the recently-published Investment News NZ (IN NZ) 11th annual KiwiSaver study, about $2.2 billion shifted between providers during the 12 months ending March 31 this year.
However, small- to mid-tier schemes came out ahead in the KiwiSaver transfer game with the top three winners – Generate, BNZ and Simplicity – garnering net transfer gains of about $173 million, $157 million and $145 million, respectively, over the 12-month period.
ASB saw the highest volume of transfers during the latest reporting year with inflows of $377 million more than making up for outflows of $321 million.
Scheme transfers represented about 4.5 per cent of total KiwiSaver funds under management as at March 31, the IN NZ study found. The IRD annual member transfer figures to the end of June equate to about 5.7 per cent of overall KiwiSaver membership (2.87 million) compared to 6.2 per cent for the same measure in the 2014/15 year.
The June 2018 IRD statistics also show KiwiSaver withdrawals under financial hardship and first home purchase conditions increased by about 50 per cent and 30 per cent, respectively, over the annual period to new highs.
Just over 17,000 KiwiSaver members were paid out a collective $104 million plus during the 12 months to June 30 compared to 14,913 and almost $70 million by the same measures last year. Meanwhile, 34,343 members withdrew a total $768 million to help buy a first home during the 2017/18 year, up from 32,682 and $601 million 12 months previously.