SPEAKER_01: 0:20

We're gonna name and shame some of the providers out there for investment. No, we're not. But just needed a hook for people to listen in. Hello, Elizabeth. Hi. Um All right. You did the research. Yes. And you asked your trusted research partner to give you a list of the worst and the best performing.

SPEAKER_00: 0:42

Yeah, I was really curious because you would think, you would think that when I chose which providers to work with when I set up my business, that I would just be like, okay, well, internet tell me who are the best performing KiwiSaver providers. But that's not actually how we choose because returns are only part of the story. So I was really curious now, coming up to the end of the year, to see who over the last five years. So we we never really want just like a tiny snapshot. We want a good average over the last five years. If we're looking at returns after fees, because fees vary so much across the board, right? And if we're looking at the different categories like conservative, balanced growth, high growth, which KiwiSaver providers are performing worst, which ones are the least ethical, and who's per performing the best. Because I just thought that would be really interesting to double check that, you know, the providers I'm recommending are actually in the good section. And it wasn't, if I'm honest, it wasn't too surprising who came out. So I feel like listeners could maybe guess to a degree who came out in that worst category. I would love to maybe I'll do a poll later on my Instagram and see who people vote for as coming out worst. One thing that's interesting is that it's not the same provider for every category. So you'll get someone who performs really badly in conservative, but maybe they're actually okay in growth because those are actually different funds, and often there are different teams looking after those funds. So it's a range of providers across, which is why when I'm recommending who people should go with, part of that equation is what fund are you actually suited for, and then all of the other aspects, because one provider might do better in the high growth space and one provider might do better in the balance space. So I think that is important to note that it's not just across the board, one provider sucks at everything.

SPEAKER_01: 2:40

Yeah. Yeah. Okay. Well, that's sort of good news in itself, a little bit for those that are with those providers. But they are if they are in a particular fund, maybe things are not as good as they should be. I love that. All right. What about the ethical side of things? Because we do hear this a lot. And we did a whole podcast on socially responsible funds.

SPEAKER_00: 3:03

Yeah. And so interestingly, the providers that came out worst performing. There was a lot of overlap with also also being the least ethical.

SPEAKER_01: 3:11

This is kind of funny because you would think that if they're not really socially responsible in investments, they would make more money.

SPEAKER_00: 3:18

Yeah, I think potentially there are some funds that are not really worried about being socially responsible. It's not a focus of theirs. But there's also an argument to be made that if you are investing in companies that are profitable, they're also hopefully sustainable. So that sustainability piece just kind of makes logical sense that if you're looking at that as a criteria, it would feed into better performing businesses. So I think my, I don't know, kind of conclusion from looking at it is that am I allowed to generalize? Am I allowed to not name a shame of individuals? But essentially the banks do poorly. The banks don't perform well, even though they have lower fees. So, and that's really important. People get really hung up on moving from a bank to an investment provider and the fee is gonna double. Actually, your return is gonna triple. The banks just don't perform well and also tend to not be very ethical. And and we all kind of know that. There was some research out years and years ago about the fact that we don't trust the banks. If you ask people, do you trust the bank? Do you think they're a good organization? Most people say no. Maybe some exceptions, like you know, a Kiwi-owned bank or something. People might have a bit more loyalty or trust in them. But generally a big overseas conglomerate, we know that they're not good, but it's easy. They used to be default funds. There'll be a lot of people who are in them because that's just what their parents set them up in, or they went in as a default provider, and then the government changed the default providers, but that doesn't mean that you got changed if you were already with someone. And I think that might be a piece of the puzzle that has been missed is new people to KiwiSaver then got put with better providers. But if you were already in and you've not really known where you are, you could still be with a provider that got kicked off the default list of that the government had because they were pretty shocking. But nobody would have contacted you about that.

SPEAKER_01: 5:20

No. And I think the other thing I see on my side of things when people go with a default provider for KiwiSaver is usually they've got the misconception of I've got my um accounts with this bank, and this is where my salary goes in. So this is where I have to have my KiwiSaver in as well.

SPEAKER_00: 5:37

Yeah. Or the convenience. It's the convenience. I was about to say banking. Yeah, right. So I think it's helpful for people to know that the fees are not the thing to look at, right? You you're paying a bigger fee with an investment provider because actually you're getting a better service and a better return. And if you are worried about where your money's going, that's a good motivation to maybe look at changing. And also it's really easy. So I think people have it as like this mental block that it's a lot of work. And maybe finding the first step, like the finding someone to talk to or the looking up who to move to is where actually the the mental block happens. So it's really easy. You contact me, you set up a meeting. It takes, you know, normally if I'm meeting with someone for the first time, I'll do half-hour initial meeting and then maximum probably half an hour to talk about Kibi Saver. So one one-hour meeting, we could move you from a provider where your money is going to places you maybe don't want it to go and your returns are pretty. They're poor objectively, but also they're poor comparatively. Like, why should you be missing out? You shouldn't be. You should be getting the most you can. And we can move you to a provider that is going to align with what you want and is going to be providing you with the returns that you deserve because you're still taking risk when you're with those providers that aren't doing well. You're still exposed to all the same volatility, but you're not getting the return. So it's a raw deal.

SPEAKER_01: 7:09

Yeah. And from my point of view, I think like everyone should stick to what they know best. Like banks are great at opening an account and helping you with your everyday transactions and you know, helping you pay your mortgage because your money's money goes there, money pays the mortgage. Awesome. But are the banks, you know, should they be looking after our insurances? Should they be looking after our investments? Exactly. I feel like in one of my other episodes, I was giving an example of GPs don't perform brain surgery. Yeah. You know, and that's the same here. Like if we are the brain surgeons, you told me not to be a doctor in a previous episode. I don't know why all you're very medical today. I have medical examples. But you know, if we are the brain surgeons, I'll be the heart surgeon, you'll be the brain surgeon. If we're doing that, you know, we expect us to know everything about heart about the brain. I know everything about mortgages, you know everything about investments. And you expect people get referred to us from the GP to perform what we need to perform. So to me, it's mind-blowing that we're still in 21st century and the generalists are doing specialists' job.

SPEAKER_00: 8:24

Yes, I think that's exactly it. And that's probably why it they're not performing well, is that they are a generalist. They are a jack of all trades, they're trying to do a little bit of everything, but they don't actually put the resource into specifically what needs to happen in the investment space. And so then the Kiwi Savers just get a bit of a half-assed look after. Yeah. So I think that's where I always say, yeah, a specialist for each of your things. A mortgage advisor is gonna help you set up correctly an insurance specialist, an investment specialist. You want everyone to be in depth on their area. Yeah.

SPEAKER_01: 9:05

And then you end up with a team. Exactly. Yeah, exactly. Awesome, Elizabeth. Thank you so much for jumping in. This has been a really cool episode to cover.

SPEAKER_00: 9:13

I think if people want to know specifically if their bank is one of the worst performing, they should like drop it in the comments or reach out or something like that, and then we can show them the reveal.

SPEAKER_01: 9:24

We can do the reveal. Awesome. Thank you so so much. See you next time. See ya.