Up To Half Of KiwiSavers Showing No Preference
17 December 2007
Up To Half Of KiwiSavers Showing No Provider Preference
As many as half the 317,000 people who have signed up for KiwiSaver have shown no preference when it comes to the financial institution that will manage their money.
This is the early conclusion ASB Group Investments, one of the country’s six default providers has reached, after analysing the latest batch of information released to it by the IRD on KiwiSaver accounts.
“About 50 percent of those who have signed up with ASB have come to us out of the default pool,” said Peter Hall, Head of Group Investments, ASB.
“Of the rest, around 80% have actively chosen ASB while only 20% have come through the employer’s choice. This last statistic supports the anecdotal feedback we are getting that many employers are not yet actively involved with KiwiSaver.
“It suggests that while there is a great deal of enthusiasm for KiwiSaver, there is also a great deal of uncertainty among the public and employers.
“Rather than making a decision, they are simply letting the IRD do the selecting.”
Mr Hall said the trend may change once the ‘first wave’ of those signing up was processed, and as people became more familiar with KiwiSaver.
“If this early trend continues it suggests some schemes are receiving limited support.
“What this could lead to, down the track, is rationalisation of the 33 providers and 46 schemes on offer as people start to assess their returns, and exercise their right to transfer their funds between providers.
“However, of more importance right now, is that people sign up to a scheme, and get into the saving habit.
“Once in KiwiSaver, people will be more inclined to focus on the return their particular scheme is achieving.”
ASB Group Investments analysis of returns would suggest its KiwiSaver market share is about 20 percent.