Quote Originally Posted by SBQ View Post
Having a background in finance, i'm not at all impressed with the whole NZ Kiwi Saver approach (keep in mind i'm speaking finance from a N. American point of view). Can you believe the insult I felt when speaking to countless of financial advisors in NZ when they could not tell me a clear cut example WITHOUT the advice of a SEPARATE TAX advisor? I questioned on tax minimisation and efficiency of the investments and they could not comment directly about taxation (regarding rules about FIF and FDR etc). Where I studied, attaining a CFA designation always accounts for taxation (meaning the person not only has to know accounting, but also taxation). It's a complete joke that the NZ advisor would charge out a fee for their service + another fee for a tax advisor. Just utter rubbish to think an investment advice does not include tax advice.

Anyways, coming from the Buffet and Munger side of investing, i'm not convinced the 3% matching will cover the fees in Kiwi Saver on a "cumulative basis" over say 10 or 20 years. Buffet has won his wager bet last year that no hedge (or actively managed) fund could beat the market index (S&P500) and he presented this at his Berkshire annual meeting last year. What purpose does a Kiwi managed fund service when they just buy the low cost Vanguard ETF? Sounds like the bureaucracy that NZ investors would be subjected to under the FDR/FIF if they bought Vanguard funds directly.

The $521 tax credit? That's called a bribe in my books.

There is a real reason why share investing isn't a hot topic for NZ. The reason is that you have an asset class (real estate) where the capital gains can be untaxed. Now recent news says the Labour Gov't will introduce a CGT to address this issue but the opposing National Party may remove it if they win the next election. Either way, when you talk about the realm of investing, one CAN'T speak without the issue of tax minimisation and my crystal ball think the NZ equity market pales in comparison to the US equity market (from a risk reward point of view). But what am I to judge? We have high paying 'actively manged' Kiwi Saver funds that would tell Buffet and Munger is wrong.
$521 tax credit, bribe or incentive call it what you will. Probably not huge in the greater scheme of things.

I would strongly disagree with your statement "i'm not convinced the 3% matching will cover the fees in Kiwi Saver on a "cumulative basis" over say 10 or 20 years."

My thought processes might be wrong but the only way you could be worse off is if fees were more than 100% of invested funds. I think they are probably around 2%.

Maybe you could give an example of your reasoning behind this statement as I must have missed something.