A new survey has revealed that New Zealanders prefer to invest in KiwiSaver funds that are not operated by major banks.
Only 19 percent are "very confident" they will have enough money for retirement, the survey found. Photo: 123RF
Consumer NZ's annual KiwiSaver satisfaction survey showed a major divide between ratings for independent and bank-operated funds.
New Zealand's biggest banks were absent from the top three, with medals instead going to Simplicity, Milford Funds and Generate.
Overall, Simplicity was the winner - with a satisfaction rating of 77 percent. Milford Funds and Generate scored second equal at 67 percent.
But the survey was bad news for New Zealand's banks. BNZ was the only major bank to rate above average, with 64 percent. Westpac lagged behind at 54 percent, and ANZ and ASB shared the bottom spot at 47 percent.
Consumer NZ chief executive Jon Duffy said that low satisfaction was likely due to recent market volatility.
"It been a tough year for KiwiSavers as they've watched their balance go down," he said.
But independent funds have maintained a lead by emphasising communication. "Industry wide, [savers] are reporting a lacking transparency about fund performance and fees they're paying," he said.
Milford Funds scored particularly high in communication, with 82 percent satisfaction for access to information and 80 percent for investment updates.
Independent funds also maintained steady performance, while banks faltered amid poor market conditions.
"Non-bank funds are standing out when it comes to performance," Duffy said. "So the major banks do have some work to do to lift their standards and come up to speed."
Consumer NZ said there was a notable information gap for savers. Three out of four savers responded that they didn't know what they paid in fees, while 60 per cent didn't know how well their fund was performing compared to others.
Only 19 percent said they were "very confident" that they would have enough money for retirement.
Ethical investments have become a prominent concern with nearly half of respondents noting that responsible investments were just as important as good returns. A further 13 percent said they would be willing to take a lower return if it meant avoiding unethical stocks like oil, gambling, tobacco and weapons.