$13b fund's bottom ranking: KiwiSaver provider with lowest satisfaction score

Tamsyn Parker, NZ Herald,
Publish Date
Thu, 1 Jul 2021, 8:01AM
(Photo / Getty)
(Photo / Getty)

$13b fund's bottom ranking: KiwiSaver provider with lowest satisfaction score

Tamsyn Parker, NZ Herald,
Publish Date
Thu, 1 Jul 2021, 8:01AM

One of the country's largest KiwiSaver providers has received the lowest ranking when it comes to customer satisfaction.

ASB, which manages $13.6 billion in KiwiSaver money and is the second-largest provider, was ranked last in a survey by Consumer New Zealand.

Its research found just 43 per cent of ASB's customers were happy with the service they were getting.

Consumer NZ chief executive Jon Duffy. (Photo / Supplied)

Consumer New Zealand chief executive Jon Duffy said ASB's score was significantly below the market average of 55 per cent.

"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 about their investment, compared with the industry average of 48 per cent," Duffy said.

Adam Boyd, executive general manager, private banking, wealth and insurance at ASB said the results were 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."

Boyd said its scheme offered consistent performance and lower-than-average fees.

"The industry body Super Ratings has endorsed ASB KiwiSaver as one of the best value for money KiwiSaver schemes across all key criteria including investment returns, fees, administration and advisory services."

The Consumer rating is the latest blow for ASB which recently missed out on being reappointed a default KiwiSaver provider.

ANZ, AMP, Fisher Funds and Mercer also missed out on reappointment.

The newly appointed providers are Bank of New Zealand, Booster, BT Funds Management (Westpac), Kiwi Wealth, Simplicity and Smartshares (NZX).

ANZ, the country's largest provider which manages nearly $18 billion, also scored poorly in the Consumer survey at 50 per cent.

An ANZ spokeswoman said it hadn't seen the survey so couldn't comment on it specifically. "However...ANZ Investments has received high ratings and awards from independent research companies.

"We won New Zealand Fund Manager of the Year and KiwiSaver Fund Manager of the Year at the Morningstar Awards 2020, as well as Good Returns Fund Manager of the Year in 2020. Our multi-asset-class funds have a Morningstar analyst rating of Bronze and we're proud to have received SuperRatings' 'Gold' rating for the ANZ KiwiSaver Scheme."

She said a gold rating showed the scheme was good value for money.

"We're continually using customer research and feedback to understand what our customers value and how we're doing, and we have a number of service enhancement initiatives underway."

The top performer in terms of satisfaction was Milford Funds Management which had 85 per cent overall satisfaction, followed by Simplicity at 74 per cent and Aon New Zealand at 73 per cent.

Duffy said there was a big difference between the best and worst performers when it came to keeping customers informed about what was happening with their money.

But it seems KiwiSaver members also struggle to know how their fund is performing compared with others and when it comes to how much they are paying in fees.

Six out of 10 of those surveyed did not know how their KiwiSaver fund stacked up against others and 70 per cent didn't know how much they paid in fees.

Members can compare how their fund stacks up against other funds using Sorted's smart investor tool.

KiwiSaver providers are also required to tell members how much they are paying in fees in a dollar amount in their annual statements which come out around May and June.

KiwiSaver providers earned $539 million in fees in 2020, according to Consumer New Zealand.

ASB has received the lowest score for satisfaction in a Consumer survey about KiwiSaver providers. (Photo / Glenn Jeffrey)

Duffy said its research also showed many Kiwis want their money invested responsibly with almost half (48 per cent) saying they want a fund that provides a good return and invests responsibly.

One in three KiwiSaver members surveyed said they would be very concerned if their money was invested in oil and gas exploration. However, 68 per cent were unsure whether their provider invested in this area.

KiwiSaver members can find out whether their fund invests in fossil fuel through the Mindful Money website.

Changes announced by the Government mean that from December default KiwiSaver providers will no longer be able to invest in fossil fuels. They will also be required to publish a responsible investment policy on their website.

Other changes to default schemes will see a drop in charges, a move which should put pressure on industry competitors to review their fees, Duffy said.

The online survey questioned 1942 adults during April and May.