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Kiwisavers Need Support And Security Says Tower

24 May 2006

Kiwisavers Need Support And Security Says Tower

TOWER Investments is urging investors to select their KiwiSaver provider carefully, based on a proven track record of investment expertise, and says educational assistance and financial advice will be crucial to investors being able to make informed decisions.

CEO, Mr Tony Hildyard, said that the coming year would see investors inundated by potential KiwiSaver providers presenting their strengths via the workplace and the media. ‘Superior returns’ is a common selling point in the investment industry but he says that it will be important for investors to select a provider who can demonstrate not only a history of solid returns but also robust risk management.

“It’s all very well being shown a high historic return but you have to ask about the risk taken to achieve that return as well as the relative investment cycle, and be able to assess what impact that will have on future expected returns. Your provider needs to be there for you in the long term, from the present right through retirement.”

“Education programmes designed to assist future KiwiSavers with their choices of provider and fund will be available in coming months,” he said “and financial advisers will play an important part in helping investors decide what’s right for them. If the decision proves too difficult then investors will be able to fall back on the government’s choice of default providers.”

Today the government is due to release the Request for Proposals which will be part of the process to select a limited number of default KiwiSaver providers. Responses are due back to the Ministry of Economic Development by 7 July.

“Investors can be assured that a panel of investment professionals, experienced in superannuation and investment, will be making a very rigorous assessment of potential providers’ investment expertise,” said Mr Hildyard.

“TOWER will be submitting a proposal to be a default provider and while reward for risk will not be the only criterion for selection, it is expected to be an important consideration. Other key considerations will be the quality of the people within that organization, the effectiveness of their processes, the provider’s philosophy and, of course, the resulting performance.”

The 31 March Mercer Managed Fund Survey places TOWER Investments 1st for reward for risk over 3, 5, 7, 10 and 15 year periods.

Mr Hildyard said that TOWER is very proud of its consistent history of prudent investment management for New Zealand investors over such a long time period.

“We like our clients to feel confident that, whatever their particular risk profile, experienced and knowledgeable people operating within rigorous processes are working on their behalf to get the best return for as little risk as possible,” he said. “It’s a no surprises approach that may not make headlines but gives our clients the security they need to stick with us for the long term. That’s what retirement saving is all about.”

Mr Hildyard said that TOWER had participated fully in the KiwiSaver submissions and consultation process. “It is crucial for future savings habits and wealth accumulation that the end investor has a good investing experience with KiwiSaver,” he said. “Investors have to be comfortable that they are with an investment expert who will manage their investments prudently through all investment cycles and be there for them when they eventually retire.”


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