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Recently I read an article that revealed that the Banks have been highly successful at convincing New Zealanders to transfer their KiwiSaver funds into their Schemes.

 I think this is a disturbing trend that is not in the best interests of individuals, and not in the best interests of the entire KiwiSaver Scheme.

 I know that the primary reason given for having your KiwiSaver funds with your bank is convenience. They tell you it is more convenient to have all your transaction accounts, savings, mortgages AND KiwiSaver, all at the same place.

 But is it?

 Your KiwiSaver details will always be sent to you in separate envelopes from your normal bank account statements and other bank marketing material, so unfortunately this ‘convenience’ will not save you the ‘strain’ of opening an extra envelope once or twice a year!

 While you might be able to check your KiwiSaver balance at the same Bank website, it is not a great idea to be constantly checking the values of a long term investment, the value today is not important, it’s the value at retirement that you want to focus on, so website access to your KiwiSaver fund value is not something you should really want or need anyway.

 ANZ, National, Westpac and BNZ, all have their KiwiSaver Schemes managed by a fund manager which is a separate business to the bank (OnePath, BT, and AXA). So any enquiries will be to a different phone No, and a different address, and you’ll deal with different people.

 Bank staff seem to constantly change. It’s unlikely you will have one person to deal with all your banking needs, including KiwiSaver, if you do, that person will probably change before too long.

 So I don’t see any ‘convenience’ at all by having your KiwiSaver scheme with your Bank.

 Now I must admit that my views are somewhat biased.

 If you chose to place your KiwiSaver funds into a scheme I recommend and sign you up to, I will receive a one-off commission of between $0 - $50, and an ongoing trail commission of between 0.15% - 0.50% p.a. of the balance of your KiwiSaver funds. Not exactly huge money is it? How much I actually receive will depend on which KiwiSaver Scheme you elect to save with following my advice, and which individual fund or funds within that scheme you invest into.

 In fact, under recent legislation, I now have to tell you exactly what I get paid for the specific Scheme you invest into. It’s hardly big business for individual Financial Advisers like myself.

 Then again, the Banks probably receive a similar ‘commission’ too; they just don’t have to tell you what ‘profit’ they make out of it. And where do their profits go? Most Banks are Australian-owned; the exceptions are SBS and KiwiBank.

 So the profit I make out of each KiwiSaver client is pretty much ‘breadcrumbs’. Of course, each Bank has access to hundreds of thousands of clients, so the profit they make out of KiwiSaver is like ‘a nationwide chain of bakeries’ in comparison, and for much less work with most individuals!!

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