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KiwiSaver scheme managers have been told they must review their fees every year, and demonstrate they are providing savers with “value for money”.
The Financial Markets Authority (FMA), which regulates KiwiSaver schemes, says economies of scale have not typically been shared with savers by scheme managers through lower fees.
The FMA has released guidance for managers to annually review their fees and value for money, after which they must prove the review has happened.
It comes as research into the market shows benefits are not typically passed onto investors, there's no relationship between fees charged, and returns and managers weren't living up to their market index.
FMA director of investment management Paul Gregory joined Mike Hosking to share his thoughts on the issue.
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