Bank staff are encouraging customers to move their KiwiSaver into bank-managed funds — but they can’t give financial advice, and the numbers often don’t stack up. Before you sign anything, read this.
If you’ve spoken to your bank recently, maybe you have opened an account, renewed a mortgage, or just had a check in — there’s a good chance they mentioned your KiwiSaver. They probably made it sound easy: “We can just move it across for you today.” Maybe they pointed out that having everything in one place is more convenient.
It sounds reasonable. But convenience is not the same as good advice — and what’s convenient for the bank is not always what’s best for your retirement savings.
Important to know – what bank staff can and can’t do
Bank staff are not financial advisers. They cannot legally give you personalised financial advice about your KiwiSaver. They can share general information about their products, but they cannot assess your full financial picture and make a recommendation tailored to you. Which means you’re only ever hearing one side of the story.
A financial adviser, on the other hand, is required to:
- Understand your full financial situation, goals, and timeline
- Consider the whole market, not just one provider’s products
- Compare fees, fund types, and historical performance across providers
- Put your interests first
The returns gap is real
One of the most important factors in your KiwiSaver is how much it earns over time. Even a 1–2% difference in annual returns, compounded over decades, can mean tens of thousands of dollars less in your retirement nest egg.
Historically, many bank-managed KiwiSaver funds have delivered lower returns compared to specialist KiwiSaver providers. This isn’t always the case — but it’s consistent enough to matter. And yet, because bank staff can only talk about their own products, this comparison is never part of the conversation they’re having with you.
The “it’s just easier” argument
Banks are good at making consolidation sound logical. Seeing your KiwiSaver balance alongside your savings account can feel tidy. But your KiwiSaver isn’t an everyday banking product. It’s a long-term investment that will likely be one of the biggest pools of money you ever accumulate.
“Easy to see” is not a good reason to accept lower returns for decades.
- KiwiSaver is a long-term game — so don’t keep an eye on it like a short-term one. If you’re in a growth fund, your balance will have plenty of highs and lows along the way. That’s normal, and it’s exactly how long-term investing works. You ride out the dips and come out ahead over time. Checking your balance weekly doesn’t change that. It just gives you more opportunities to feel anxious about something you shouldn’t act on anyway.
- Seeing the dips can do more harm than good. Watching your balance drop a few hundred dollars overnight is unsettling, even when you know it’s temporary. Long-term investments are best reviewed every six months or so, when you’re far more likely to see meaningful growth rather than day-to-day noise.
- Your contributions take time to arrive in your account. Employer contributions don’t go straight to your fund. They’re routed through the IRD first, which can take up to a month. So checking it every week isn’t going to see it grow as quickly as you might like.
So, while it might seem like a nice idea to have your balances all sitting on one screen, it might not be the best idea when you put some thought into it. All KiwiSaver funds are accessible online, so you can log in to see your balance whenever the mood strikes you.
If you have your KiwiSaver invested with Booster, they have an app that gives you a snapshot of all your accounts including your bank, any properties you own, KiwiSaver etc.
What to do instead
If your bank has raised the idea of moving your KiwiSaver, tell them you’d like to think about it and talk to your financial adviser first.
You will be able to review your current provider’s performance, fees, and fund type against alternatives with your KiwiSaver Adviser. They will give you a clear picture of whether switching makes sense for you specifically.
If you had been thinking of switching providers, CM Financial Advisers offer advice on a number of different KiwiSaver providers. We do this to ensure you are matched to a fund that suits your needs, ensuring you move to the right fund type (growth, balanced, conservative) for your age, risk tolerance, and retirement timeline, not just the fund that’s most convenient to sell you today. And we will manage the entire process for you.
Don’t have a financial adviser? Give us a call.
Not sure if your current KiwiSaver is working as hard as it could be? We can review your fund, compare providers, and make sure you’re on the right track. KiwiSaver advice is one of the most impactful conversations you can have. Small decisions made today can have a very large effect on your financial future.
