KiwiSaver Switching
Will you lose your gains or gain some losses?
By Scott Crocker
It's easy to join a KiwiSaver scheme, but moving from one provider to another can be a bit more complicated. One of the most common concerns for investors is whether they will lose the gains made in their previous fund by moving.
Firstly, it's important to note that there is always some degree of risk involved when switching KiwiSaver providers. This is because each provider has its own investment strategy and fees, which can affect your returns. Therefore, before making the switch, it's important to consider why you want to move.
Some common reasons are:
Poor performance: If a KiwiSaver scheme is consistently underperforming compared to other providers, investors may choose to move to a better-performing scheme.
Change in investment goals: If an investor's personal circumstances change, such as a change in risk tolerance or investment goals, they may need to switch to a KiwiSaver scheme with a more suitable investment strategy.
Dissatisfaction with provider: If an investor is dissatisfied with the customer service or communication from their current provider, they may choose to switch to a provider that better meets their needs.
Ethical Reasons: concerns about the environmental or social impact of the companies in which their current provider invests. They may want to switch to a provider that offers ethical investment options, such as those that focus on renewable energy, sustainable agriculture, or fair labour practices.
Switching providers can also have its benefits.
For example, if you're not happy with the performance of your current provider, moving to a provider with a better track record could result in higher returns over time. Similarly, if you've experienced changes in your personal circumstances, such as a change in your risk tolerance or investment goals, moving to a provider with a more suitable investment strategy could help you achieve your financial objectives.
So, what's the bottom line?
Moving KiwiSaver providers is not without risk. However, if you do your research, get advice and choose a provider with a good track record and investment strategy that aligns with your goals, the potential benefits often outweigh the risks. As always, it's a good idea to seek advice from a financial advisor before making any significant changes to your KiwiSaver investments.
