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John talks KiwiSaver.

KiwiSaver is one of the cornerstones of successful financial planning in New Zealand today. Since June 2008 assets in all the combined KiwiSaver accounts have grown from $954.10 million to $11.64 billion as at 30th June 2012.

This growth in savings has been at a phenomenal rate, and in my opinion is going to change the financial security of generations to come.

Research shows that ASB and OnePath dominate the KiwiSaver market with 46.0% of the total assets under management between them.  The top eight KiwiSaver providers account for 95.0% of all assets under management and I would suggest that more rationalisation in this sector is likely.  The lesson here is that size does matter.

According to the latest Morningstar KiwiSaver research, 33.3% of today’s $11.64 billion managed by the KiwiSaver providers is still in the default funds. These default funds are managed by six managers and are invested in conservative portfolios.  Over the past four years these funds have returned on average 5.1% with the best performer being OnePath at 6.1%, and the worst being AMP with a 3.5% return.  AMP has consistently been the worst performer in this class. When you consider AMP has $440 million in this fund, it shows that some people are not yet looking at the performance of their respective funds, nor are they reviewing the performance of their KiwiSaver managers.

In my opinion, one of the great attributes of KiwiSaver is the fact that investors have choice. They can elect who manages their funds and where these funds are invested. After four years of KiwiSaver, we are now in the position to have a track record on which to base a rationale decision on who investors should consider appropriate for their individual circumstances.  Every quarter, Morningstar Research produces a performance survey. This report highlights not only the returns but also the underlying asset allocation. This information, plus considering an individual’s circumstances and risk tolerance, allows for a more informed choice.

We are now starting to see investors accessing their retirement funds and also use the first home buyer withdrawal and first home subsidy.  If you have been in KiwiSaver for three years and you are buying your first home, you can apply for a $3,000 deposit subsidy.  This rises to $5,000 if you have been in KiwiSaver for up to five years. On top of this you can access your KiwiSaver contributions, your employer contributions and any profit earned while in KiwiSaver. The only thing to remember is these applications take time, and there are rules around the first home subsidy.

Visit www. for details.

Anyone applying to withdraw from any KiwiSaver plan at retirement also needs to be aware that the process can take up to four weeks. This is due to the fact that the IRD is involved and there are a number of calculations and tax issues to be addressed behind the scenes.

If you are contemplating accessing your KiwiSaver, I suggest you talk to us before starting the process.