KiwiSaver is the key foundation for many New Zealanders for their retirement saving and for some to assist with the purchase of their first home.

Unfortunately, it is also an area where there is a lot of confusing and, at times, prominent advertising that seeks to influence members into decisions that may not be right for them.

We can help you navigate this, and once we have met with you, provide a recommendation for the suitable scheme for you, with the right risk profile and the appropriate types of investments.

One of the biggest mistakes people make is switching funds at the wrong time. For example, in 2020, the industry saw a large number of Investors switch their KiwiSaver funds into more conservative funds when the markets declined in response to the outbreak of Covid. In many cases, this was the worst decision they could have made, as they locked in losses that would have been recovered in the next few months.

These decisions frequently come about from inappropriate risk profiles or simply not having someone to talk to before making the decisions. This is where we can help, providing the experience of almost 30 years in delivering Investment Advice, and helping you make the right decisions.

Some of the most common questions to think about

• Do you know where your KiwiSaver Fund is?
• What are you paying in fees, but more importantly, does this reward you with better returns?
• How does your fund perform in relation to others in the market
• Are you with a Default provider which was chosen by the Government or, in some cases, by your employer
• Are you maximising the benefits of KiwiSaver membership
• Are you in the right risk profile for your situation that takes into account your timeframes and when you will start withdrawing from your fund?
• Will your KiwiSaver provide for your desired lifestyle?

One of the most common misconceptions people have is that KiwiSaver will by itself provide for their retirement. Whilst it is a key building block, you will most likely need to save additional amounts, which can be done through KiwiSaver or a fund that runs alongside but allows you to access your funds if you need.

Using our specialist software, we can model your goals and objectives and advise you on the steps you need to take to achieve your retirement goals. We will let you know

• Are you in the right fund and risk profile, and recommend a better fund if appropriate, with the risks and benefits of making a change.
• How much do you need to contribute
• Are you maximising the benefits available to you?

We will also let you know about your progress with each year so you will know if you are on track and can make changes if necessary. You can also call us at any time to discuss and ask any questions you may have.

Some of the common mistakes people make with KiwiSaver and why you need an adviser alongside you.

If any of these sounds like you, contact us to chat about how we can help.

1. Chasing returns. Chasing returns from the past is not always the best approach. Past returns are not a guide for the future is something that we hear consistently in investment. Whilst it can be a guide, looking at short term returns can mean you are making decisions based on a one off event. Longer term returns can give a better guide, but you need to look at any one off gains and the reasons for these.
   
   
2. Only looking at Fees. Whilst fees are a significant consideration, as they will impact your returns, it is essential to look at the overall return you are getting. Typically funds with higher fees are actively managed, which means they should deliver higher returns over the long term. However, this isn’t always the case, and looking for the right active manager will help. We look at the consistency of returns as part of our recommendation.
   
   
3. Being in a fund with the wrong risk profile. This can have a bigger impact on your returns than fees. For example, many people will be in a default or conservative fund when a higher risk profile could suit better due to their timeframe. Alternatively, if you are looking to buy a first home, if it is going to happen in the near future, you should be looking at a lower risk profile, as you can not afford to have a market correction just before needing the funds.
4. Not reviewing your fund as you approach retirement. Many people take a set and forget approach to KiwiSaver. As you approach retirement reviewing your fund is essential, not only to make sure the risk profile remains suitable but also to make sure you are still on target for what you want to achieve.
   
   
5. Thinking KiwiSaver is all you need to do. KiwiSaver is just one part of the retirement puzzle. You also need to look at other savings you need to put in place to give yourself the best opportunity of achieving your retirement goals. This can be done through KiwiSaver if you are happy for your funds to be locked away. Alternatively, you can invest through another fund, which will provide access in the event you need the money.
   
   
6. Withdrawing your funds at age 65. Many people will cash up their KiwiSaver at age 65. There is no need to do this, as the funds can be used to produce a regular income, with the added upside that they should continue to grow over your retirement. The fees within KiwiSaver are often hard to beat with other forms of investment.
   
   
7. Thinking KiwiSaver is not for me. KiwiSaver is suitable for almost everyone, even if you are only contributing the minimum to get the maximum government contribution, you will be getting a 50% return on your money each year before your investment returns.