Our view

• Consumers with little or no investment knowledge are being presented with confusing information that's lacking in useful detail. Both the government and the investment firms are guilty of this.
  
  
• We are concerned that people are being persuaded into putting their money into something they don't understand and that gives them no guarantees. No KiwiSaver fund is government guaranteed.
  
  
• The fees structure of many managed funds is largely unclear and unfathomable to ordinary investors, and even financial experts. Scheme providers need to help educate their investors about fees and investment strategies, not keep them in the dark.
  
  
• IRD and other KiwiSaver regulators must demand that KiwiSaver fund fees are more transparent and simple, and that providers present their information more clearly. Without this, individual KiwiSaver investors can't make informed decisions about their life savings.
  
  
• Look carefully at where your money will be invested and consider the level of risk you're willing to take. Funds investing in shares and property have a higher risk attached to them than those investing in cash, bonds and fixed interest.
  
  
• If you haven't joined a scheme yet, don't rush into a decision. Take the time to talk with an independent financial adviser, do your homework and find out as much as possible about the fees, returns, and investment strategies of a particular company. Ask the fund manager for the past three year's performance figures for the funds into which they will invest your savings.
  
  
• If you find it difficult to extract this information from a fund manager, go to another one who will provide it.

More information

• Our KiwiSaver website: www.consumersaver.org.nz
• Government Actuary: www.isu.govt.nz
• Inland Revenue Department: www.ird.govt.nz
• Ministry of Economic Development: www.med.govt.nz
• Society of Independent Financial Advisers: www.sifa.org.nz

Report by Marc Wendelborn