KiwiSaver membership fees are still a thing, according to the third National Capital quarterly sector review published this week.
The National survey of 24 KiwiSaver providers found half still charged membership fees despite a trend against the fixed cost in recent years.
Over the 12 months to March 31 this year, for instance, ANZ, ASB and Westpac all dropped their respective fixed member charges carved a collective $30 million plus in fees year-on-year. Over the same period AMP saw total fees (member plus a newly combined admin and management fee) fall by about $9.6 million.
Fees varied across the KiwiSaver diversified fund population in the National database from an average 1.12 per cent in the high growth category to 0.61 per cent in the conservative cohort.
As well as a wide spread of fees, the study shows the KiwiSaver overall asset allocation de-risked somewhat during the September quarter with an increase in cash and bonds at the expense of equities.
Average scheme cash holdings rose to 11.4 per cent from 9.26 per cent in the June quarter while bond holdings saw a “marginal increase”. Furthermore, the National analysis shows a “a consistent increment of current yield” across all KiwiSaver portfolios.
Despite the asset class tweak, most managers stayed true-to-label over the value-to-growth spectrum.
National also found a wide disparity in the relative investment performance of KiwiSaver growth funds from 2013 to the latest 2023 rolling five-year return data points.
“The difference in returns between the top-performing funds and the bottom in the Growth category varied significantly, with an average difference of 2.55% p.a,” the report says.
Extrapolating the results to future performance, the National study says “the average 40-year-old Kiwi earning $70,000 per year, with $28,000 currently in their KiwiSaver fund who contributes 4% of their income, the performance gap could cost them $88,847 in retirement savings at age 65”.
Headed by Clive Fernandes, National launched a KiwiSaver ‘robo-advice’ business in 2019, offering a comparison and referral service for a limited number of schemes. To date, National has advised on about $110 million of KiwiSaver money.
Advisory firm, Saturn Portfolio Management, bought National in 2021.
The group debuted the KiwiSaver ‘Value for Money’ quarterly report this May, assessing funds on a number of metrics including fees, performance, organisation capabilities, portfolio processes and ethical investing.