The managed funds analyst Trident Research has released rankings for the six default KiwiSaver balanced fund providers, based on the level of their management fees.
Through its SmartKiwiSaver website ($30 annual subscription), Trident Research operates the only independent consumer-type education, signup, calculator and fund monitoring website for KiwiSaver, all accessible from one site.
In the balanced funds category, ASB charges the lowest annual management fees of $73, while sixth-placed Mercer Active Balanced is more than double, at $151.80.
“In percentage terms the differences in management fees might seem small, but as our website calculators show, they have a very significant effect on how much you will get at retirement time,” said the director of Trident Research Phil Harris.
Trident Research had developed the SmartKiwiSaver website to give employer and employee KiwiSavers affordable access to the same kind of funds performance analysis that was available to major fund managers and to the financial planning industry, said Harris.
“Employers in particular are getting really confused and the beauty of this kind of website is that you can suggest employees go there and know that they’ll get themselves sorted with a sign-up very quickly. They can also email questions to SmartKiwiSaver.
“Because there’s so little money in it, no one else seemed interested in providing this independent education and performance analysis website.
“But we think it’s important to educate intending KiwiSavers about the basics of risk and return and the importance of choosing a fund that has the lowest management fees and performs consistently in the upper quartile of returns for its category”, said Harris.
As a long-time independent observer of the funds management industry, Harris said he had been amused to see some KiwiSaver fund managers claiming to have the lowest management fees.
“For instance, I’m afraid Gareth Morgan and his fund members are in for a bit of shock when they find where his fund is placed in the management fees ranking of the 30 balanced funds so far registered with KiwiSaver,” said Harris.
Fees comparisons for a KiwiSaver account balance of $10,000 with just the six default providers – Balanced Funds category.
Scheme Fees paid annually % of balance Rank
ASB Balanced. $73 0.73 1
ING Balanced $121.50 1.22 2
TOWER Balanced $131 1.31 3
AMP Balanced $138.50 1.39 4
AXA Balanced $143.92 1.44 5
Mercer Active Balanced $151.80 1.52 6