2019-10-01_Australian_Womens_Weekly_NZ

PHOTOGRAPHY

BY

ELLENCHELSEY.COM

With MARY HOLM

I

s it wise for a husband

and wife to be inthe

same KiwiSaver scheme?

It’s an excellent

question from a reader

I’ll call Sarah, who is

in her mid-30s. She

had read in my latest

book that it’s best to

choose a KiwiSaver

fund based largely on

low fees – and not on

how well a fund has

performed, because

performance changes

all the time. So she

checked out the fees onhersandher

husband’s funds.

“It turns out that myhusband

is with a provider whocharges

signi cantly lower feesthanmy

provider,” she writes.

“With your advicein mind,I’m

tempted to switch tomyhusband’s

provider, but wonderif theriskin

having both our retirementsavings

with one provider outweighsthe

long-term bene ts fromlowerfees?”

A BASIC RULE OF INVESTINGISTO

SPREAD YOUR RISK.

Invest in different typesofassets– such

as shares and propertyandbonds.And

have lots of different shares,lotsof

different bonds and –if you’rerich

enough! – lots of differentproperties.

That way, if one performs badly

that will hopefully be offset by

another performing well. It’s the

old “eggs in baskets” stuff.

DOES IT APPLY TO KIWISAVER

PROVIDERS?

There are three issues here:

● Concern about a provider’s

strength. This is not about your

Low fees arekey,butwhatotherfactorsplayintosavvyKiwiSaverplanning?

differentproviders’growthfunds.We

don’tknowwhichfundwilldobetter,

butif oneperformsbadlyfora while,

theremaybecomfortin seeingtheother

doingbetter.

●Differentfees.It’sa greatideafor

Sarahtoswitchtoa low-feeprovider,

asthatcanmakea bigdifferenceto

howmuchshehasin retirement.But

thereareseverallow-feeproviders.

TondoutwhichKiwiSaverfunds

chargelowfees,Google“SortedSmart

Investor”.Clickon“Compare”,then

“KiwiSaverandManagedFunds”,

thenyourtypeoffund:defensive,

conservative,balanced,growthor

aggressive.(Ifyoudon’tknow,ask

yourprovider.)

Scrolldown,andon

therightside,whereit

says,“SortBy”,clickon

“Fees(LowestFirst)”.

WHATDOESITALL

AMOUNTTO?It’snota

bigworryfortwofamily

membersto bein the

sameKiwiSaverfund.

Butyoudobenet from

thevariedperformance

of twodifferentfunds.

FOOTNOTE:Sarahalso

says,“Myfather-in-law

passedawayafew

yearsago,anditwas

a big eye-opener to see

how little my mother-

in-law was involved in

fi nancial matters and

how diffi cult it all

became once he was

no longer there.” Let’s

stop any more women

fi nding themselves in

that situation.

THIS COLUMN IS SUPPORTED BY THE FINANCIAL MARKETS AUTHORITY TO ENCOURAGE WOMEN TO TAKE AN INTEREST IN KIWISAVER AND

INVESTING. VISIT FMA.GOVT.NZ FOR MORE INFORMATION. MARY’S VIEWS DO NOT NECESSARILY REFLECT THOSE OF THE FMA.

balancegoingdownwhenthe

sharemarketperformsbadly.

It’saboutwhetheryoucould

losemoneybecauseyour

provideris badlymanaged

orcorrupt.And

theanswer:it’s

highlyunlikely.

InKiwiSaver

andothersimilar

funds,separaterms

calledsupervisors

checkthatyour

moneyis invested

in shares,bonds,

termdepositsand

soon.Soif a providerwentoutof

business,thatwouldn’taffectyour

savings.Youraccount

wouldbetransferred

toanotherprovider.

Whilethegovernment

doesn’tguarantee

KiwiSaver,theFinancial

MarketsAuthority

watchesoverproviders

andsupervisors

prettyclosely.

●Different

performance.If you

andyourpartner’s

fundsareat different

risklevels– maybeone

in a balancedfundand

theotherin a growth

fund– youraccounts

will grow at different

paces. But if you’re both

in, say, the same growth

fund with the same

provider, you’ll get the

same performance.

Every growth fund

is somewhat different,

so it makes some sense

for a family to be in two

ASK

MARY

Mary Holm is a journalist,

presenter, and best-selling

author on personal fi nance.

She writes a column in

the Weekend Herald and

presents a fortnightly money

segment on RNZ. Mary’s

advice is of a general nature,

and she is not responsible

for any loss that any reader

may suffer from following it.

Have a question or concern

about saving or investing for

Mary? Email awweditor@

bauermedia.co.nz, subject

Money. Letters cannot be

answered personally. If your

topic is chosen you will

receive a copy of Mary’s

book, Rich Enough? A

Laid-Back Guide for Every Kiwi.

Finance

“You do bene t

from the varied

performance of

di
erent funds.”