KiwiSaver providers have been rated in the annual Consumer NZ survey, with ASB bank faring the worst according to its customers.
There are nine Government default providers, several of which are being dropped this year in favour of others after a review following their seven-year term.
From December 1, there will be just six Government default providers.
Consumer NZ chief Jon Duffy said ASB’s score was significantly below the market average of 55 per cent after just 43 per cent of customers said in the survey they were “very satisfied” with its service.
"ASB also scored below average on all our key satisfaction measures. Just 37 per cent of customers thought ASB did a good job keeping them up to date with their investment, compared with the industry average of 48 per cent,” Duffy said.
Executive general manager for private banking, wealth and insurance for ASB, Adam Boyd said the results were "disappointing".
"Our ASB team is 100 per cent committed to helping all our KiwiSaver members achieve their financial goals so naturally these results are disappointing.
"Our focus is always on ensuring we’re supporting our members to get the most out of their KiwiSaver and we genuinely value all feedback as it helps us stay close to what matters to our customers. The Consumer survey will provide valuable insight as we continue to invest and develop our services and offering."
Both ASB and ANZ banks are not being renewed as Government default providers this year. ANZ, the biggest KiwiSaver provider also scoring below average for overall satisfaction with a rating of 50 per cent.
At the other end of the scale, independent provider, Milford Asset Management, achieved an 85 per cent score on overall customer satisfaction.
Murray Harris, Head of KiwiSaver for Milford Asset Management says it’s the fourth year in a row it’s been rated the top provider.
“The real stand outs are investment performance, people are happy with good investment returns,” he told 1 NEWS.
Providers Simplicity (74 per cent) and Aon New Zealand (73 per cent) were placed second and third.
"Our results show a big difference between the best and worst performers when it comes to keeping customers informed about what’s happening with their money," Duffy said.
Across the market, six out of 10 Kiwis didn’t know how their fund was faring compared with others. Fee transparency was also a big issue. 70 per cent didn’t know how much they paid in fees.
The amount KiwiSaver providers earn from fees has continued to rise, totaling $539 million in 2020.
Harris says people should at least know where their KiwiSaver money is going.
“I guess first and foremost, people should find out who their provider is. People see the KiwiSaver deduction come out of their bank every week and if they don’t know … it will be going to one of the nine Government-appointed providers.
“But that’s all changing,” he says “Because the providers are only active for a seven year period and ASB, ANZ and AMP have all lost their default status.”
Consumer NZ’s survey also highlighted that many Kiwis want to know their money is invested responsibly.
Almost half said they wanted a fund that provides a good return and invests responsibly – both were equally important. A further 13 per cent ranked responsible investment as the priority.
Harris says people tend to feel safer about using banks for their KiwiSaver account, but he says, it’s a mis-perception.
“I think people feel safer with banks because they are large institutions … that’s not true with KiwiSaver because they rely on the markets. It only gives the perception of safety,” he says.
Harris says Milford Asset Management has never applied to be a default provider, as the company takes a more active rather than passive approach to fund management.
“We are constantly looking for the winners in the market and avoiding the losers”.
He says it doesn’t cost anything to move across from a default provider to an independent provider.
“You just fill in an online form so you don’t need to have an awkward conversation with your KiwiSaver provider,” he says.
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