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A Focus on KiwiSaver Fees

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As an organisation, BWT Financial Limited chooses to work with Booster for KiwiSaver as the sole provider. I often get asked about the fees on Booster KiwiSaver Schemes, and so have put the current information in what I hope is a clear way below.

A number of people chose to move KiwiSaver provider based on fees alone, or based on performance alone. When it comes to choosing your KiwiSaver provider, it is so important to look at the whole picture.

The Booster KiwiSaver fees are currently as follows (est.):

Default Saver Fund 0.38%
Enhanced Income Fund 0.82% *
Capital Guaranteed Fund 0.91%
Moderate Fund 1.14%
Asset Class Conservative Fund 1.15% *
Asset Class Balanced Fund 1.22% *
Balanced Fund 1.24%
Asset Class Growth Fund 1.29% *
Balanced Growth Fund 1.29%
High Growth Fund 1.34%
Socially Responsible Balanced Fund 1.27% *
Socially Responsible Growth Fund 1.32% *

* Our preferred funds

In addition, there is a $3 a month Member Fee if the balance of your account is over $500 ($10,001 for the Default Saver Fund).

 

What do these fees cover?

• All of the investment management, reporting, foreign exchange, audit and compliance costs.
• Booster provides accidental death cover which pays out in addition to your KiwiSaver balance. More information can be found here. You can see your level of cover in the mobile app and online.
• A fantastic mobile app and online portal. The portal now includes a budgeting tool which is worth a look.
• The fee also covers the cost of any advice you require. This is something pretty unique to Booster KiwiSavers, where the fee you pay covers unlimited access to us (BWT Financial) for financial advice requirements relating to your KiwiSaver. We never charge hourly fees and are able to give qualified and personalised financial advice and retirement planning advice to our KiwiSaver clients without any additional fee.
• As well as access to advice from us

 

How do these compare?

The industry generally is reviewing fees at the moment, and you may have read about other providers recently lowering their fees. Sometimes lower fees can mean better value, and sometimes they can be lower due to less service, so just make sure you know what the fee you are paying covers.

Generally, these fees are around average for the various sectors. There are certainly cheaper providers, but very few of them will offer any advice, or personal contact with an adviser.

Morningstar publish quarterly comparisons of KiwiSaver fees and performance (from providers that choose to participate). It also shows you the % of Growth Assets within each fund. This is really important to look at, as whilst there might be 20 funds classified as “Moderate” there can be a big difference within this classification as to how much risk is actually being taken with your money. You can find the Q2 report here.

 

What about performance?

This may sound odd, but Booster is aiming for average, or just above average with performance, and to be consistent with this. Generally, the star performers will have a reason for their great performance (taking a lot of risk with a small number of large bets for example), and it is unlikely they will be consistently at the top of the tables. Likewise, the lowest performers may not actually be doing anything wrong, they may just be the least risky fund in the comparison group, when the market has been rising.

 

As always, please get in touch if you have any questions or if you would like to discuss this is more detail or get advice. You will never be charged for advice, as it is all part of the KiwiSaver offering from Booster.

Disclosure statements are available free of charge and on request. This article should not be considered to be advice.