(Pictured: David Chaplin)
The NZ$21.4 billion (A$19.3 billion) KiwiSaver Scheme, which is shared between 35 banks, managers and other service providers, has seen an uptick in investor switching in the past year, with the two Australian-owned banks, ANZ and BNZ (owned by NAB), winning much of the inflows.
The annual study of the market, produced by journalist David Chaplin, shows that another Australian heavyweight, AMP, which boasts more aligned financial planners in New Zealand than any other group, suffered the biggest outflows.
The inflows and outflows, however, did not change the rankings of the top KiwiSaver providers, as AMP was bolstered by “inflows” which finally came through its merger with AXA, and ANZ was able to increase its lead through a merger with a National scheme.
The top KiwiSaver rankings as at March 31 were:
- ANZ, with NZ$4.91 billion, representing 22.98 per cent of the market.
- ASB, with NZ$3.86 billion, representing 18.07 per cent.
- AMP, with NZ$2.98 billion, representing 13.95 per cent.
- Westpac, with $2.44 billion, representing 11.42 per cent.
- Fisher, with NZ$2.04 billion, representing 9.55 per cent.
ASB (Auckland Savings Bank) is owned by the Commonwealth Bank. Fisher Funds is an independent NZ-owned firm.
Chaplin says in his report: “Over the seven-year life of KiwiSaver, banks have consistently dominated the transfer market.
“Bank-owned schemes have generally topped the table as measured by this report’s preferred ‘net transfer’ statistic (which reflects a scheme’s ability to keep members as well as attract them from rivals). Only the Gareth Morgan scheme in 2009 and the now-closed Huljich KiwiSaver in 2010, prevented a bank whitewash of the annual top net transfer awards…
“The ability of banks to convert mundane financial relationships into longer-term KiwiSaver commitments has always irked providers with less attractive distribution profiles.
“However, the regulator finally issued a warning over bank KiwiSaver matchmaking practices in September 2014. The FMA, in its inaugural review of the Qualifying Financial Entity (QFE) regime, expressed some concern that banks were exerting undue influence over KiwiSaver transfers. ‘We continue to receive reports from various sources about concerning KiwiSaver sales and switching practices in the marketplace,’ the FMA QFE report says.
“Whether gentle persuasion from the regulator can prevent the nation’s bank tellers from seducing clients over to the house KiwiSaver scheme is another matter,” Chaplin says.
A detailed summary of the report is provided for free. Chaplin also sells a variety of data on the KiwiSaver and financial planning markets in New Zealand which complement the report.