Reflecting on the evolution of KiwiSaver and recent innovation in the sector, Murray Harris tells Good Returns that it is only natural for savers to become more interested in their invested savings and how they’re managed as their balance grows larger.
“We've seen some very specialist emerging market funds, and I think for a small percentage of the KiwiSaver membership, they'll be interested in that and obviously cryptocurrency and Bitcoin has been an area people have got an interest in too.
“And we're seeing innovation in the product side, which is good to see.
“But for your average KiwiSaver member a good, well-diversified fund with a bit of equity to bonds and equities for the main is enough.”
Those more interested in long-term investing and taking on more risk would likely continue to seek advice and look at whether a growth fund primarily in equities is a good solution, says Harris.
“But for your average KiwiSaver member a good, well-diversified fund with a bit of equity to bonds and equities for the main is enough.”
“I think, as in all markets, you see innovation, some of it gets traction, some of it doesn't.
“But I think the core of the KiwiSaver market really is your traditional, diversified fund-type investor,” he says.
Receiving the right advice at the right time remains crucial for KiwiSaver members, says Harris.
“The experience in Australia was when super balances got to about the value of a new car, that's a lot of money, and people don't want to muck it up - it’s going to be their retirement.
“They want to make sure that they've set the right goal, they are aware of the risk profile, and they're in an appropriate fund and contributed enough.”
Staying ahead of the pack
Heading into 2025, Milford will work to maintain its position as one of the top performers in the market, says Harris. Growing competition in the KiwiSaver landscape and the maturing of investors has been beneficial for independent brands like Milford, allowing them to step out from the shadow cast by the major banks.
“In the very early days, there was a large land grab by the banks, because they had great brands, and people recognised them and saw them as being a safe place to have their money.
“But I think as balances have grown and people's maturity has grown around KiwiSaver, they're starting to look outside the banks and the mainstream players and saying, hey, you know, who do I really want my money managed by? Are they experts in managing money? Are they providing great service? Do they have great tools and access to advice?
“And so I think that's why you're seeing, when you look at the flow stats, money flowing to some of the smaller independently-owned providers.”
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