We know that many KiwiSaver members tend to view this as a long term ‘set and forget’ type of investment. Some thought may have been put into the initial choice of fund manager and fund type for investing but this is unlikely to have been reviewed recently. Circumstances change and what was suitable when joining KiwiSaver may no longer be the case.

Using data from KiwiSaver reviews we have completed over the past 12 months has uncovered some interesting facts:

57% were in a fund that did not match their risk profile (risk capacity and tolerance)
- 62% of these were in a fund that was too aggressive for their preferences
- 38% of these were in a fund that was too conservative for their risk profile
24% were in the right type of fund but with an underperforming fund manager
17% were able to reduce risk to match their risk profile and still have better average fund performance
59% needed a change of fund and fund manager
89% were with an underperforming fund manager
20% needed to make extra payments to maximise Government contributions

What are the lessons from this?

When clients are invested in a fund that is too volatile for their preferences, following an investment loss they tend to panic and switch into a lower risk fund, locking in losses and taking longer to recoup losses when markets recover.

When clients are invested in a fund that is too conservative for their situation, they are not maximising their returns which will reduce long term outcomes.

So are you in the right type of fund for your KiwiSaver?

We provide a free review service for KiwiSaver and can help you make sure you are invested in the right type of fund with a suitable fund manager to meet your current requirements.

Are you invested in the right KiwiSaver fund?