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Should My Wife And I Join Different KiwiSaver Providers?

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Mary Holm
Mary Holm


I am in the process of signing up myself, my wife and our three young children into KiwiSaver.

My question is: would you recommend signing up with different providers (and potentially different fund strategies) to give us further diversification?


Mary Holm: I feel nervous about placing our entire KiwiSaver savings with one provider, given the fairly erratic performance across the fund management industry.

Diversification is pretty much always a good idea in investment. While each person can be in only one KiwiSaver scheme, with a family of five you have a good opportunity to spread your savings around several providers.

That's not to say I expect any KiwiSaver accounts to hit the skids.

KiwiSaver providers are not like finance companies. Your money is not invested in the provider's business, but in assets bought at arm's length by the provider.

If a provider runs its business so badly that it folds, your investments should still be safe and you will be moved to a new provider.

However, as you say, different providers use different investment strategies and offer different investment options. They also differ in many other ways, such as quality of communication with investors, fee levels, flexibility of contributions and so on.

If you want to find out how good a wine is, compare it with other wines. Similarly, to find the best provider for you, compare it with its competitors. This could work particularly well with your three children, who will presumably all receive the same contributions from you.

I suggest you put them with three different providers, but all in funds of much the same risk level. It will be interesting to see whose account grows the fastest over, say, five or 10 years. To keep things fair, though, you might have to top up the other children's accounts at some point - and perhaps move them all to the best provider.

Moving should be easy. Your new provider will do all the paper work with your old provider and Inland Revenue.


Mary Holm is the author of bestselling books on KiwiSaver and personal finance. She is also a highly praised seminar presenter. Her written advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following that advice.    

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