What a weapon – Gareth Morgan Investments (GMI) have built a Kiwisaver fee calculator. Check it out. Plug in your portfolio sizze, and investment strategy, and the calculator will show how much the 6 ‘official’ and GMK’s Kiwisaver products will charge per year.
The calculator lets you adjust the unitization factor, which Gareth claims is buried cost the industry charges, made possible by funds converting holdings into units. This is something the industry has been in trouble for in the past. You can adjust it to zero, however, if you trust the other providers. I wouldn’t trust them, and in fact I’d never trust a bank or insurance company with my non-cash investments as they have too many overheads and not enough smart people. Moreover investments made by my parents for me when I was born are essentially valueless now, as AMP apparently didn’t know what inflation was. That’s not a great incentive for me to invest.
GMI’s Kiwisaver is not always the cheapest option in the calculator – especially if you want a conservative (low return) approach. Also for larger portfolios (over say $30,000) it seems Westpac is the cheapest, but then if I had a $100,000 Kiwisaver portfolio I would be far more concerned with portfolio performance than the $243 difference in fees (GMI $963, Westpac $720 with no unitisation mispricing factor. If you add in a mispricing factor then things swing back GMI’s way.)
Lance Wiggs 
That’s great. It’s even cheaper to manage your own speculation! But many New Zealanders will shirk that weighty responsibility for some fund manager whose success could be purely attributable to luck – I hate survivorship bias!
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Great information.NA on ASB I think they are going into Kiwi Saver could that information be forthcoming.Couldnt get you on Google or Internet Explorer but could on Yahoo why would that be?
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interesting stuff. did you perchance see the article today by Chalkie (The Independant 27/6/07) – sort of negates what you said – I don’t know what statistical evidence GM used when he came up with his $40 for hidden costs across ALL fund managers. In fact much of his evidence was codswollop and was not even applicable in NZ. By the way, i read your section ‘all about me’. did you ride with GM on his fabled trips? i was trying to see why you agreed with all he said, then i saw you also worked with Sam. And had investments with GMI. A little more disclosure would not hurt just so we can see what side of the fence you are sitting on and are not biased in any way. Keep up the good work, (and don’t forget to remove the eyepatch every once in a while). Go on – surprise me and publish this in full.
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tylersdad. Thanks for the comment.
I did not see the Chalkie article today, as I’m out of the country right now. Perhaps Bernard could put it online :-)
Without seeing the article I’ll find it difficult to respond to the $40 bit – I suggest you ask GMK or someone from McCallum Petterson. I would love to see similar calculators up for the other providers.
I will make one point – if Gareth is out there making these statements and the providers feel they are false, then why have they not bought about an injunction or other legal action? Their inaction speaks volumes.
I’ve disclosed everything material in my profile. and yes – I’m biased as all hell, as I don’t trust the big brand providers for lots of reasons, including personal history, and I do trust Gareth because he is the epitome of David Swensen’s criteria for someone to invest with.
I ride on my trips alone.
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Perhaps there is no court action or retaliatory comment as they don’t want to get into a tit for tat public debate. all i am saying is that Chalkie has no reason to sway one way or the other and would appear to be a more nuetral unbiased opinion on the true state of play. One thing you have not mentioned is why all of a sudden is GM getting into this arena – he has never done funds management before, only his very small wrap service. i would suggest he;s as it like a rat up a drainpipe as well and is just as bad as the rest. You should also mention that for every Kiwisaver Provider the fees have been approved by the Govt Actuary as reasonable – so there is no hidden fees. The other side is that the benchmark performance is as clear as water- a stock index usually, and it is extremely easy to work out the difference between the physical return and benchmark return – the difference being tax and fees – so i can’t see exactly where things such as fees are hidden. And as for riding on your trips alone – your photographs suggest otherwise.
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Thanks again for the comment Tylersdad.
yes my first ride with Gareth and Jo (and a couple of others) was a jaunt to this years Brass Monkey. That’s hardly a trip – those tend to last months if not years.
While I’m all for a good debate on the issues, I believe ad hominum attacks are out of order here or in any other forum. I’ve been careful to release my affiliations, and have (and will not) challenged yours.
I don’t have the Chalkie text, so I’m operating fact free here sorry. I’ll revert when I do.
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Keep it up Lance.
@tylersdad: All you have to do is read Lance’s blog for about 3 weeks and you get to know exactly where he is coming from. He never hides his affiliations and you can decide to agree or disagree with his views. Any _healthy_ debate is most welcome.
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So always read the fine print…. Someone I know on a small wage signed up to GMK (without reading the fine print!). She just received an email from GMK saying
“….the minimum annual fee is being changed to $50 per annum for the first three years you are a member of KiwiSaver (any scheme) and thereafter $100 per annum. This is a change from the $200 minimum annual fee stated in the original Trust Deed.”
Good on them for reducing this to a level that lets the little gal invest, however the online calculator only shows years 1-3 costs….
The way I read this is that when you could only invest say $1000k per annum this fee structure would have just eaten your money!
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