Is Your KiwiSaver Fund Killing Bunnies?

November 23, 2020

November 23, 2020

From unethical investing and a lack of transparency to not doing everything they can to make sure you’re in the absolute best fund for you, a lot of providers are missing the mark.

Your KiwiSaver fund can set you up to buy a home or have a comfy retirement. It can be invested in sustainable funds that help our environment or positively affect people’s lives. Or it can do the exact opposite.

Everyone has a right to make sure their KiwiSaver investment is doing the best it can for them, and that their dollars support funds that match their personal values.

To be blunt, a lot of providers suck at getting this right. We got tired of people not knowing about it. So we’re going to lay it all out for you.

Some KiwiSaver providers are invested in unethical funds

You try to make all the right choices - supporting sustainable businesses, buying locally, voting for leaders you believe in - yet one of your most influential votes could be going in direct opposition to what’s important to you.

Your KiwiSaver account can store thousands of dollars, but unlike a savings account, that money is not just sitting there. It’s out doing stuff, mainly supporting businesses and making you more money.

But do you know what businesses your KiwiSaver funds are supporting? Those thousands of dollars invested on your behalf make a whole lot more impact than your stainless steel straws or your reusable cup.

In 2016, the NZ Herald conducted an investigation and found that more than 2 million Kiwis were unwitting investors in big tobacco and banned weapons.

Here’s a list of other stuff that some KiwiSaver funds are invested in:

  • Weapons - nuclear warheads, cluster munitions and anti-personnel mines, to be specific.
  • Human rights abuses
  • Fossil fuels
  • Animal welfare concerns (like testing on animals)
  • Gambling
  • GMO’s
  • Porn

Even if a provider says they’re investing responsibly, should you believe it?

There’s no requirement for funds to be independently graded and verified. So two years ago, we worked out a grading scale for KiwiSaver providers based on an environmental, social and governance (ESG) score. Our aim was to independently verify the truth about what providers claimed regarding their ESG commitments with the goal of encouraging providers to get their act together and do the right thing.

What we found was lots of bland meaningless statements and a lack of reporting on how they lived up to claims. We didn’t give a single KiwiSaver provider a grade over C+. It ruffled some feathers for sure.

They don’t make it easy for you

We all know you can’t demand trust, you have to earn it. And to earn it, providers need to have total transparency about what they’re investing in.

It’s not easy for consumers to choose a fund that they’re confident matches their values.

Right now there is no standard practice for responsible investing. There’s a lack of uniformity in reporting and disclosure. Every fund has to include product disclosure statements (PDS) and explain whether or not they take responsible investing into account, but whether they disclose details or not is up to them.

Studies show the disparity between what Kiwis want to be invested in and what a lot of us are actually invested in. A 2018 Colmar Brunton survey found that 72% of Kiwis expected their investments to be made responsibly. However only 8% of KiwiSaver members chose their provider because they thought they were best when it came to sustainability and ethics.

The same survey showed that the barriers to responsible investing were a lack of independent information, a lack of time to compare options, and a lack of trust in the claims.

That’s why we have set out to make the information transparent, simple to understand, and all in one place at BetterSaver.

Everyone should have equal opportunity to do what’s best for them with their KiwiSaver. We save you time and effort by giving you the knowledge you need to be confident in your investment. No one makes it easier than us.

They don’t go the extra mile to get you in the right fund

Getting in the right fund from the start can make the difference between retiring in style or worrying about money for the rest of your life. It can mean buying your own home, and then retiring in style - but you’ve got to get sorted with the right fund for whatever it is you want to do.

If you don’t choose a fund when you sign up, you are placed in a default fund. The idea is you can park yourself here while you figure out which fund you should be in.

For many people, the complexity of this decision means they stay in their default fund way longer than they should. In 2018 the NZ Herald reported that 400,000 KiwiSaver members in default funds missed out on $1 billion over the previous six years. All because they stayed in a default fund!

There’s a matter of conflict of interest here as well. Default funds are often invested in the provider’s own bank products. In 2018, the five default KiwiSaver providers had an average of 34% of their own default funds invested in their products - so why would they encourage anyone to move out of the default fund? It serves their interests to keep you there.

We make the effort to ask the questions about your goals, values, and lifestyle to make it simple for you to get in the right fund.

We’re Over Providers That Suck

We call it like we see it to make it as easy as possible for you to get in the right KiwiSaver fund for your situation. The more Kiwis that demand responsible investing, the more providers will sit up and pay attention.

BetterSaver gives 100% independent, expert information so you have the knowledge you need to make the best decisions. We’ll guide you every step of the way to make sure you’re invested in funds that match your values and help you achieve your goals.

Sign up for our waitlist and get ready to take action.

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