The introduction of KiwiSaver in 2008 was a significant step in the right direction of helping people to save and prepare for their future retirement. KiwiSaver is now New Zealand’s largest form of retirement savings, with 2.8million members, and a combined investment value of nearly $35billion.
The success of KiwiSaver within NZ has been huge, with sign up rates far surpassing initial Government expectations. However despite the large number of members and the seemingly large value of investment assets, there is a gaping hole within the NZ financial services space surrounding KiwiSaver– that being access to quality advice. In particular, advice that is easy to access, affordable to the general public, and that is not tied to only one specific provider. This lack of advice is ultimately having the effect of reducing the amount of money in people’s KiwiSaver accounts once they reach retirement.
With the majority of New Zealander’s now aware of and mostly comfortable with the KiwiSaver concept, it’s time to make the next leap forward: take the handbrake off retirement savings by getting good advice.
The value of receiving advice in relation to KiwiSaver can be huge, and comes in multiple forms. The first and most basic thing to understand (and get right) iswhat type or investor profile or risk profile is the most suitable. Your risk profile determines how your investment assets are split between different types of investments, which is likely to have the biggest influence on the level of returns your investment makes over time. If you can get this part of the equation right, you are over half way there.
The second part of the equation is choosing the right KiwiSaver provider with the right fund, and this can be a little more difficult to get right. There are a multitude of NZ KiwiSaver providers and funds to choose between, all of whom seem to tell you that they have the best funds. While there are some very good comparison websites available, such sites tend to provide information only, and will not give you actual or ongoing advice about the best options for you, nor will they help with the finer points that can be a headache like transferring your investment to a more suitable fund.
More personalised advice that takes into account your specific situation can be incredibly valuable if you have don’t fit into the typical mould. There are many instances in which this might occur, such as when buying your first home, planning for retirement, or when taking into account other savings goals or investment accounts that you may already have.
Working in NZ financial services and advising clients since the introduction of KiwiSaver nearly 10 years ago, I was seeing first hand how much better off people could be with a little advice from an expert, and in particular one who was not tied to just one KiwiSaver provider. And so began the idea forIlumony, with the aim of providing easy to access, affordable advice on KiwiSaver to help all New Zealander’s be better off financially.
So go on, take the handbrake off and make the next leap forward, it’s easier than you think. Visit www.ilumony.com/ for more information.
Disclaimer – Rachel Strevens is an Authorised Financial Adviser (AFA) and Director of Ilumony Ltd, a company providing financial services and advice on Kiwisaver. A copy of her disclosure statement is available free of charge on request from firstname.lastname@example.org Information provided in this article is of a general nature only, and is not intended to be personalised financial advice.