KiwiSaver funds have hit $81 billion in the year ending March 2021, and the Financial Markets Authority (FMA) say that providers should no longer be charging membership fees!
“There is little justification for membership fees to be charged by investment managers who have achieved scale,” Paul Gregory, FMA director of investment management, said.
KiwiSaver providers earned $657 million in fees in the financial year ending in March 2021. The FMA expects KiwiSaver providers to review their fees yearly, and to take concrete steps if they find their fees are unreasonable and do not represent value for money. Managers were told that they must prove that these reviews are happening, and failure to do so could trigger a regulatory response.
BNZ, AMP, Westpac and ASB were among the providers which had cut fees in recent months, but the FMA wanted to see more providers following suit. Membership fees were initially designed to help providers cover costs in the early days of KiwiSaver. Now, with over 3 million members, it is clear that KiwiSaver providers are earning enough without needing to charge those “administration” fees.
It’s great to see that so many KiwiSaver providers are easing up on their fees, and we look forward to more providers following along.
In the 2020-2021 financial year $1.4 billion of KiwiSaver funds were withdrawn for first home purchases. This is so fantastic – many of those first home buyers would also have accessed First Home Grants. Who doesn’t love free money?
If you are thinking about buying your first home and want to know more about how you can access your KiwiSaver funds to help, get in touch. Buying a house may be more achievable than you thought! We are happy to have a no obligations chat about your situation, you can book a face to face or Zoom appointment at the Calendly link at the bottom of the page.