Changes to the way KiwiSaver fees are reported are about to be rolled out next month - and savers could be in for a shock.
For the first time, customers will see the fees they pay their fund managers in dollar figures.
For example, if a customer has a balance of $10,000 in their KiwiSaver account, until now they might have seen the fund manager's fee expressed as 1.28 percent. That will now be spelled out as $128 per year.
David Boyle, general manager of education at the Commission for Financial Capability, says he doesn't want people to freak out when they see how much they're paying.
"It's very difficult, it's not like getting a power bill, and it's the first thing you're going to look at," he told The AM Show on Tuesday.
"In this case, what we're worried about is that for some people it'll be a bit of a shock, because they haven't seen it before. And they just need to understand what that fee is paying for and be able to compare that."
Fees vary, but in theory higher ones get you better performance.
"The difference in fees may be due to the type of fund you are in - conservative funds tend to have lower fees than growth or aggressive funds - or it may be due to the fund manager providing a different range of services," Financial Markets Authority director of regulation Liam Mason says.
Mr Boyle hopes the change will cause a conversation and create competition between KiwiSaver providers. He urges people to contact their provider if they don't understand their fee.
Newshub.
