You're making a proactive choice by exploring KiwiSaver providers like Kernel and Simplicity, known for lower fees. But remember, your decision should align with your investment goals, risk tolerance, and ethics. Past performance is important, but consult a financial advisor for personalized advice.
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“Hello, my kiwisaver is with ASB Bank. For the past two years, I have seen my fund not going up but keeps going down although I make regular contribution. I know I am in it for the long term. So I should just ignore it. But I started to learn more about fees and return. I checked on on Sorted.org.nz and read on a couple of posts about Kernell and Simplicity. Seem they have better fees and return compared to ASB Bank. If I have to move my kiwisaver, which one should I pick between the two? I have been in Balanced Fund for a while now. Thinking about moving to growth fund.”
(Original question on Reddit)
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It’s great that you’re taking a proactive approach to managing your KiwiSaver and considering your options. Both Kernel and Simplicity are reputable KiwiSaver providers known for their lower fees, which can positively impact your returns over the long term. However, KiwiSaver is more than just about fees. Here are some factors to consider when choosing between the two providers:
Investment Strategy
Before you choose what provider you want to be with, it’s essential to understand what fund you want to be in. Conservative funds are much less volatile than growth funds and are typically better to be in if you have short-term KiwiSaver goals, such as buying your first home in the next year or two. This way, the market won’t impact your balance as much. However, a growth fund tends to be much better for people with longer-term goals, typically more than five years, as you can expect much more volatility with a growth fund but also better returns. So evaluate what your goal is with KiwiSaver to get the most out of it. Determine whether the investment strategy of each provider aligns with your risk tolerance and long-term goals.
Performance
While past performance does not guarantee future results, reviewing the historical performance of the funds offered by both providers is essential. Consider the returns they have generated in different market conditions. It’s worth exploring other KiwiSaver providers which can offer you better returns and lower fees. You can use National Capital’s website to compare the different providers and their funds. Additionally, you can get in touch with us to get advice for your personal situation.
Ethical Considerations
If ethical investing is important to you, check whether Kernel or Simplicity offers ethical or sustainable investment options that align with your values.
Before deciding, it’s important to consider your risk tolerance, investment horizon, and financial goals. It is wise to consult with a financial advisor to ensure you make the best decision for your individual circumstances. Financial advisors can give you all the information you need to make important investment decisions.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
