Are you better off self-managing your KiwiSaver?

At first glance, it may seem obvious that working with a Financial Adviser puts you in a better position, but that may not be the case. Coming from a Financial Adviser, I can assure you there are some potential downsides, e.g.

1. Adviser Fees
2. Limited access to various providers or work for one particular provider
3. Taking a narrow planning approach to retirement planning.
4. No mechanism to review- set and forget strategy
5. You have the time and know-how to conduct your own research and design a robust plan yourself

Am I working my way out of a job? By no means, on average most are better off working with an adviser and at FWG, we ensure we are better than average.

So what should you be looking for when considering working with a Financial Adviser? At FWG, we provide a comprehensive review and analysis of your KiwiSaver, as well as personalised recommendations, tailored to your specific situation, preferences and risk profile.

1. Personalized Financial Planning

We tailor investment strategies based on your individual financial situation, goals, and risk tolerance. We don't just select a fund; we align your KiwiSaver with broader retirement and wealth-building goals. This is particularly helpful when choosing the right investment approach for long-term retirement outcomes.

2. Investment Expertise

While KiwiSaver providers offer a range of funds (from conservative to growth), our financial advisers bring added value by selecting the optimal fund based on your unique needs. They analyse fund performance, and?market trends, and help adjust your investments as your circumstances change or market conditions shift.

3. Behavioural Guidance and Regular Reviews

We act as emotional coaches, helping clients avoid rash decisions during market volatility. Studies have shown that one of the biggest benefits advisers provide is preventing clients from panic-selling in downturns, which can significantly enhance long-term returns. We don't employ a 'set and forget' strategy. It's important to review your situation, align with your goals and expectations.

4. Holistic Financial Management

We provide more than just fund selection. We integrate your KiwiSaver into your overall financial strategy, considering other savings, investments, and insurance needs. This holistic approach ensures your finances work together to meet your long-term goals, from retirement to estate planning.

5. Cost Efficiency

While some KiwiSaver providers charge adviser fees, many rebate a portion (up to 0.2% in some cases). This can lower the cost of receiving advice. Depending on the provider, you might not pay an adviser fee or only a small portion, making the service even more cost-effective.

6. Potential Added Returns

Research from companies like Vanguard, Morningstar, and Russell Investments suggests that advisers can add between 1.5% and 4.9% to annual returns. This added value comes from behavioural guidance, tax planning, portfolio rebalancing, and other strategic adjustments. Over the long term, these contributions can significantly enhance your retirement savings, often outweighing the costs associated with advice.

Conclusion

While managing KiwiSaver directly might seem like a cheaper option, the long-term benefits of using a financial adviser can often outweigh the costs. Personalised advice, behavioural support and potential fee rebates can lead to better financial outcomes. Whether or not you’re charged an adviser fee depends on the provider, but with tax deductibility and rebates, the net cost of advice can be minimal, especially when considering the potential for added returns.

This balanced approach ensures you’re optimizing your KiwiSaver account and aligning it with broader financial goals, helping you secure a comfortable retirement.