A Canstar survey into KiwiSaver members’ customer satisfaction with their providers reveals a surprising insight: Investment returns and value for money are more important than fees.
The result could shed some more light on the ongoing returns-versus-fees debate, and which area investors would prefer their providers to focus on.
Nearly 30% of almost 3,000 KiwiSaver survey respondents revealed value for money was their biggest driver of satisfaction with their KiwiSaver provider, while another 25% pointed to investment returns.
Interestingly, only 11% named fees as the most important aspect of their perceived satisfaction level. Customer service and communication came in at 19% and 17%, respectively, as primary drivers of satisfaction.
These insights could contribute to the ongoing industry discussion, and its spotlight on the appropriate level of fees for KiwiSaver accounts.
The Financial Markets Authority’s 2018 KiwiSaver annual report found average fees were up more than 19% from the previous year, to $117, with fund managers collecting almost $448 million over the financial year. As a result, the regulator has said it will continue to focus on this area, to ensure transparency around pricing and value.
“This is an interesting result,” said Jose George, Canstar NZ General Manager. “There’s been an intense focus on fees, with some providers finding themselves under scrutiny for the amount they are charging customers, and with regulator-driven initiatives to improve visibility and transparency on fees.
“New Zealanders are now telling us they’re more interested in overall value for money and returns than fees. This could reflect an improved awareness by KiwiSaver members of the fees they’re being charged, which leads to them demanding better returns and better value for their investments.
“It could also be reflective of investor expectations of better returns on their retirement focused investments as their KiwiSaver balances continue to grow.”
The Canstar survey revealed Simplicity as the winner of the Most Satisfied Customers Award for its KiwiSaver offerings. Simplicity’s members ranked satisfaction with their provider very highly on investment returns, ease of use and communication.
Survey respondents also commented on Simplicity’s ethical lending practices, contributions to charity, easy online setup and low fees.
“As a result, it has customers who are extremely happy with both its values and its financial offering,” said Mr. George. “ Customer feedback shows New Zealanders increasingly care about ethical investments, and want to know their funds are supporting companies they feel comfortable with,” he added. “Customers are also very happy to see Simplicity contributing to charities.”
Canstar’s research also found that Kiwis were very aware of their KiwiSaver savings, with more than half checking their balance at least once a month, and nearly 80% once every quarter.
However, worryingly only 32% of KiwiSaver survey respondents indicated that they had other sources of saving investments. More than 40% of these are putting money away in savings accounts, while others are investing in property and shares.
“The research suggests concerns around New Zealanders’ preparation for retirement – or lack thereof – is well placed. New Zealanders may want to maintain a certain lifestyle in retirement, but our research suggests they may be overly reliant on the state.”Media contact