Don't get mad, get informed....some simple tools to find out what you're being charged in fees
Hugely disappointing news this week that the Government bowed to pressure from the banking industry not to implement swift changes to reveal the real costs of KiwiSaver fees.
Consumer Affairs Minister Paul Goldsmith announced Wednesday that providers would have until 2018 to make the necessary changes to show fees in actual dollar terms.
To hear managing director Sam Stubbs' thoughts on the subject, have a listen to this Radio NZ item here. Simplicity KiwiSaver has been championing to have legislation changed to make the reporting of fees standardised and made simpler to understand.
We believe investors deserve better. And we know that revealing the actual cost to consumers of KiwiSaver is not that difficult.
Simplicity is 100% online -- and 100% transparency when it comes to fees. Balances, returns, contributions, taxes and fees are all there for members to review on a daily basis.
KiwiSavers who are not members of Simplicity, or the few others in the industry that also show fees in dollar costs, shouldn't be discouraged.
If your existing provider can't, won't or doesn't know the cost of managing your KiwiSaver funds, there are free resources that show you how.
The KiwiSaver fee calculator housed on the New Zealand Herald's website here will do the trick.
To see a table on comparative costs in real dollar terms for balances of $10,000, $20,000 and up, check out our table here.
Many people still think they are they paying $30 when they are actually something more like $360 (in annual fees).
Under new regulations, providers will be required to show full dollar fee amounts as part of the annual statement sent to KiwiSaver members. At present, management and performance fees can be split up and provided in a variety of formats which is confusing for members.
Simplicity, which launched in September, currently has around 2300 members and some $60million in funds under management, putting it well ahead of targets for its first year in operation. For a numerical snapshot, check out our new dashboard here.