An online KiwiSaver scheme promising low fees across its three funds – conservative, balanced and growth - has launched.

The not-for-profit Simplicity is owned by a New Zealand charitable trust. Managing director Sam Stubbs, formerly chief executive of Tower Investments, says the model means lower costs than the big KiwiSaver providers and more money for savers.

Simplicity funds have a fee of 0.30 percent per annum. The organisation’s funds management fee is one of the lowest in the market and less than default KiwiSaver funds.

On a balance of $10,000, Simplicity customers pay a $30 annual funds management fee and $30 membership fee. On $100,000, annual fees would be $330. According to figures published by the Commission for Financial Capability, the average fee on conservative Kiwisaver funds was 1.15 percent in the year to March.

Simplicity says all money is invested in index funds (an investment fund that attempts to match the performance of indexed stocks like the NZ Stock Exchange Top 50), rather than being actively managed. Index funds don’t attract performance fees. The company uses Vanguard, a massive not-for-profit American management company specialising in index funds, to run overseas investments. Simplicity’s staff run New Zealand investments.