Kiwisaver Strategy

[GTM 3442]

Timely
https://www.goodreturns.co.nz/articl...ay+29+May+2020

It might have been good advice on the first of March. It might have been poor advice later in the month.

I'm just amazed to see anyone in the New Zealand financial services industry doing something pro-active. Time for a cup of tea and a nice lie down. . .

[SBQ]

It might have been good advice on the first of March. It might have been poor advice later in the month.

I'm just amazed to see anyone in the New Zealand financial services industry doing something pro-active. Time for a cup of tea and a nice lie down. . .

The FMA is the product of NZ's Nanny State regulation. The same could equally apply to any adviser making the 'aggressive' recommendation instead of the 'conservative'.

But really... what are they really talking about? I'm looking for accountability of those Kiwi managed funds to man up on underperformance. From what I see, someone has to be in the top 1, 2, or 3. Where are those that say they're #1 for 5 or 10 consecutive years in a row? How about this bold move, no managed fund to charge any management fee if their fund does not beat the index return? Nope - instead the NZ Gov't has all these funds put out stupid risk levels for their clients in the form of "Defensive, Conservative... Balance... to all the way to Aggressive" and you know how all that risk level works? It's based on a proportion of the investment that is put into [cash interest / bond returns] : [share] ratio. Anotherwords, why would I pay a managed fund to put 2/3rds or 67% of the funds I give them into a low interest bond or cash deposit in the "Conservative Fund" when I could just only give them 1/3rd or 33% of the cash and tell them to invest it 100% into growth equties and let me deal with the 67% of the funds by putting it into a cash term deposit?

and before any person that is pushed into Kiwi Saver, where are the financial adviser that give advice to their clients that they can do what I said above? Maybe it's due to people don't know how to save so they figure all the $ should come off their wages and salaries and the fund managers would gladly take a fee off the gross sum.

[Baa_Baa]

Utter rubbish! The problem with all these stated figures is they make unrealistic assumptions. One being you can not assume the market return a static ie. 5 or 6% return compounded until the person retires nor can any advisor be held accountable if their investment plan does not work out. Believe me, these advisors are very good at tweaking things and pitching scenarios to their clients... but will never admit any fault.



The article also doesn't say WHY individuals would switch from aggressive to conservative? Based on what logic? Do we assume the individual is scared and rather than 'risk' losing more by staying in the aggressive fund, they feel they want to go to a lower risk fund? What if there was no recovery and it proved the conservative funds fared better than the aggressive funds?? Sounds to be (like all these articles), they're cherry picking based on a hindsight 20/20 scenario. If you ask all of the top long time running stock pickers, from Buffet to Ray Dalio, to any reputable fund manager, they ALL agree that timing does matter. They also do not believe holding bonds, to any long term certainty, is a wise plan to reach retirement. Buffet has never been a big fan of investing into junk bonds but would gladly underwrite the terms of such bonds in his favour.

I've mentioned before, the whole problem of NZ's Kiwi Saver is the lack of any real financial advice and the absence of how funds manage their risk levels between portfolios. That is the difference between say an aggressive vs a conservative is mainly due to the % holdings in bonds or interest bearing assets in each portfolio. An aggressive fund would have a low allocation of cash & bonds while the low risk funds would have a very high % of holding cash and bonds. This is very different to the managed funds over in N. America where financial advisor point you to reputable mutual funds that specialise in that area. Out of the 5000+ managed funds you can pick, no financial advisor is going to pick ONE family of funds that so happens to have various portfolios and let their clients choose in between the risk categories.


I'm still waiting for Stuff to report the huge tax difference between investing in NZ residential properties vs investing in Kiwi Saver funds. Not even Ms Ardern could address this problem by not allowing CGT.

Let’s just face it, you need to move back to Canada. So down on NZ investment opportunities. Kiwis don’t have an option to invest in overseas retirement savings schemes. Your glass half full it’s really tedious to be honest, and we still have no ideas whether you have any credentials to back up your assertions or advice. Do you?

The article simply said it was a bad idea to switch a long term fixed investment from growth to cash. And that’s exactly how it worked out. My KiwiSaver for example which I didn’t touch and is balanced/growth is substantially up since the COVID crash and recovery.

The message it’s pretty simple which you choose to distort and deflect from … Just decide a KiwiSaver strategy and stick to it, don’t duck around with it trying to time the market.

Back on ignore, you bore me to tears and I really dislike your negativity

[SBQ]

Let’s just face it, you need to move back to Canada. So down on NZ investment opportunities. Kiwis don’t have an option to invest in overseas retirement savings schemes. Your glass half full it’s really tedious to be honest, and we still have no ideas whether you have any credentials to back up your assertions or advice. Do you?

The article simply said it was a bad idea to switch a long term fixed investment from growth to cash. And that’s exactly how it worked out. My KiwiSaver for example which I didn’t touch and is balanced/growth is substantially up since the COVID crash and recovery.

The message it’s pretty simple which you choose to distort and deflect from … Just decide a KiwiSaver strategy and stick to it, don’t duck around with it trying to time the market.

Back on ignore, you bore me to tears and I really dislike your negativity

You mean it's ok for NZ financial advisors to tell half truths? 20/20 hindsight is all they work on and the real distortion is they make no mention on why those that really reach retirement in NZ quick, have done so in residential properties.

There is no deflection or distortion of the facts. We have a gov't that is simply not interested in leveling the playing field on taxation, and the financial advisors don't seem to be ethical enough to care. It's like talking to a car salesman trying to sell a lot full of cars knowing all of them have issues.

Perhaps you're not interested in hearing anyone to point fingers at this key problem and you can ignore it all you want. Hell, just look at the way NZ continues to build sub-standard housing or how the OECD continues to say NZ needs to do more to make housing affordable and implement some form of tax on real estate to discourage tax free investment in this area. It's not rocket science.

Going back to the article. I stand firm. The problem isn't about how people switch between risk categories. The problem is the lack of financial advice for these clients making the wrong move between portfolios without full disclosure. Accountability? nope and to have an article that simply rubs in the face of such investors for making the wrong choice? = FAIL!

[ratkin]

Have any of you made any voluntary contributions to kiwisaver?

Just had another term deposit mature, and was at a complete loss of what to do with it, so have just whacked it into the kiwi saver.
Sensible or silly?

[stoploss]

Have any of you made any voluntary contributions to kiwisaver?

Just had another term deposit mature, and was at a complete loss of what to do with it, so have just whacked it into the kiwi saver.
Sensible or silly?

Depends .
Are you able to get it out for first home purchase ?
If you’re over 65 can get out anytime so fine .
If in the middle , some of the providers have “ mirror” funds the same as their KiwiSaver offerings .
So this might be a better option if you might need access to the money for some unforeseen reason .
All in my opinion, not advice .

[ratkin]

Depends .
Are you able to get it out for first home purchase ?
If you’re over 65 can get out anytime so fine .
If in the middle , some of the providers have “ mirror” funds the same as their KiwiSaver offerings .
So this might be a better option if you might need access to the money for some unforeseen reason .
All in my opinion, not advice .

59 so figured in terms of time frame it not much different to sticking it in a term deposit. Feels a bit safer than having it in an NZ bank esoecially as was only being offered 1.85% interest on it

[Bjauck]

59 so figured in terms of time frame it not much different to sticking it in a term deposit. Feels a bit safer than having it in an NZ bank esoecially as was only being offered 1.85% interest on it

I recently received an unexpected legacy. I dialled down my kiwisaver risk back to conservative balanced and added the legacy as a voluntary contribution. It boosted the balance by about a third. Even though it will be locked away for longer than any term deposit, I preferred the current risk/reward at current interest rates. I did not want to add to my current shareholdings or need it elsewhere.

[stoploss]

59 so figured in terms of time frame it not much different to sticking it in a term deposit. Feels a bit safer than having it in an NZ bank esoecially as was only being offered 1.85% interest on it

I think one of the major benefits is you have the services of a lot of "professional investors " working for you. This comes with the protection of the Kiwisaver reigme and compliance that entails .One of the good safety nets is all the money goes through a trustee company .
Certainly doesn't stop them losing money in the market , but nobody can get their hands on "your money "

[Bjauck]

I think one of the major benefits is you have the services of a lot of "professional investors " working for you. This comes with the protection of the Kiwisaver reigme and compliance that entails .One of the good safety nets is all the money goes through a trustee company .
Certainly doesn't stop them losing money in the market , but nobody can get their hands on "your money "

I agree. The media interest, regulation and oversight of the Kiwisaver regime is a comparative drawcard compared to non-kiwisaver funds.

Also Kiwisaver funds can be treated differently in some situations. For example, if the applicant is under 65 (normal minimum age for access to kiwisaver funds), they are not included by WINZ in any asset or income testing. There may be other situations?

http://www.stuff.co.nz/business/8653...e-my-KiwiSaver