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Older KiwiSaver members prompted to switch

Tuesday, May 15th 2018, 5:00AM

by Susan Edmunds

New research shows older KiwiSavers tend to turn to online tools rather than seek human advice on their investments.

An FMA, MBIE and Industry trial tested targeted communication using behavioural insights to prompt KiwiSaver members to make an active fund decision.

The trial, which was run with ANZ, focused on members who were turning 56, at a time when the ANZ lifetimes fund automatically moves a member from a balanced fund to a conservative balanced fund.

These members were specifically targeted for the trial after previous FMA research showed those getting information or advice 10 years out from retirement were more confident in retirement.

The trial involved just over 2000 participants. Members received either an original letter notifying them of their new fund allocation or an updated letter created using behavioural insights.

The updated letter included prompts to check their retirement savings were on track by using online tools or by calling and speaking to an ANZ adviser. Members were also told most people who seek advice do so when they are in their 50s.

More people who received the updated letter switched funds and MBIE analysis has determined the interim results to be statistically significant.  

Simone Robbers, FMA acting director of external communications and investor capability said, “Providers regularly send letters and emails to their members and we would like to see more providers adopting these techniques. Adopting communications that use behavioural insights can influence more members to think about their financial future and then take action.”

The results will be published in full when the extended trial ends.

An FMA spokesman said the part of the trial that MBIE analysis has determined to be statistically significant is that more people who received the updated letter switched funds.

"Trial participants were initially prompted to try the online tools, with a further prompt that if they needed further guidance, they could speak to an adviser.

"At this stage, the trend suggests people turned to the online tools more than speaking to an adviser."

Tags: ANZ FMA KiwiSaver

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ANZ 5.79 4.79 4.99 5.35
ANZ Special - 4.29 4.49 4.85
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ASB Bank Special - 4.29 4.49 4.79
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Finance Direct - - - -
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HSBC Premier 5.89 3.99 4.19 4.69
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HSBC Special - - - -
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ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.69 4.89 5.35
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.19 4.39 4.85
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 4.49 4.85
Sovereign 5.90 4.69 4.89 5.19
Sovereign Special - 4.29 4.49 4.79
The Co-operative Bank - Owner Occ 5.75 4.24 4.49 4.85
The Co-operative Bank - Standard 5.75 4.74 4.99 5.35
TSB Bank 5.80 4.74 4.99 5.35
TSB Special - 4.24 4.49 4.85
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.99 5.05 5.44
Westpac - Offset 5.95 - - -
Westpac Special - 4.29 4.49 4.85
Median 5.89 4.69 4.89 5.19

Last updated: 10 August 2018 9:25am

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